When you are looking for a Medicare advantage plan, you usually have the choice between HMO (Medicare Health Maintenance Organizations), PPO (Preferred Provider Organizations), or PFFS (Private Fee For Service) insurance plans, depending upon which plans are available in your geographic area. Less common are Special Needs plans (SNP) and Medical Savings Accounts (MSA).
All types of Medicare advantage plans have by law to offer at least the exact same benefits as original Medicare, but usually offer much more. They are generally appealing to Medicare beneficiaries because they often provide increased benefits such as eyeglasses, hearing aids, prescription drugs or dental benefits that are not covered by Medicare. Because each plan type has its own advantages and disadvantages, it is important to know what the differences are, in order to select the plan type that is best suited for your individual health care needs.
HMO and PPO plans have been around a very long time. Both are managed care plans and contract with doctors, hospitals, and other health care service providers such as labs, pharmacies and medical equipment suppliers, to build a ‘provider network’. They differ in the following points: HMOs require that you select a health care provider from the plan’s network. If you seek services outside of the network, you typically will have to pay all or most of the costs yourself. You also need to appoint a primary care physician (PCP) for all of your basic health care needs, who also will be responsible for coordinating all your medical services. If you need to see a specialist, you will have to ask your primary doctor for an referral.
PPO plans also offer a provider network, but in contrast to HMOs they usually also insure services from professionals or facilities outside of the network, and do not require a referral to see a specialist. However, if you use out-of-network care, you are only partially covered. You will have to pay your medical bill yourself, and then file a claim for reimbursement.
Some advantage plan providers offer Private Fee For Service Plans (PFFS), which – like original Medicare – will let you consult any doctor or Medicare-approved medical facility, but – unlike original Medicare – you will have a co-payment.
Medicare Special Needs Plans (SNP) are Medicare health plans for people with special needs, for example for those in long term health care facilities, persons with chronic conditions, or individuals on Medicaid.
A Medical Savings Account (MSA) allows you to put money tax-free in an account for future health care costs.
Generally spoken, HMO advantage plans provide the most affordable option, although you are typically limited in how to receive medical services, since you are not covered for health care obtained outside the plan’s network.
The costs for a Medicare advantage plan will consist of its premium, plus deductibles and/or co-payments for services. Most plans cap the yearly amount you have to pay for medical products and services (out-of-pocket limit), and offer cost sharing after the cap is met (co-insurance).
Please note that the above are just general considerations, and individual policies may differ.By: Joseph Rosario