The opportunity to enroll in Medicare is one of the gifts you’re sure to receive for your 65th birthday. About three months before you turn 65 you will receive a packet from Medicare explaining your options; choosing a Medicare Advantage Plan is one of them. So what’s the advantage of choosing Medicare Advantage?
Advantage plans are approved and governed by Medicare, but administered through private insurance companies. These plans are a combination of Part A (hospital), Part B (medical), and some plans include Part D (prescription) as well.
There are five basic types of Medicare Advantage Plans:
Health Maintenance Organization (HMO)
With an HMO you are assigned to a Primary Care Physician (PCP) who coordinates your care. Most services administered outside of your PCP’s office will require a referral. You must utilize hospitals and specialists within your PCP’s Medical Group or Independent Provider Association (IPA). The majority of HMO plans include prescription drug coverage and have set copay amounts for services rendered.
Preferred Provider Organization (PPO)
PPO’s offer the freedom of choice. Although there are affiliated provider networks within the PPO structure, you also have the option of using out-of-network providers. You do not need to choose a PCP and referrals are not required.
Private Fee-for-Service
Fee-for-Service plans offer some level of choice as well. You utilize Medicare-approved providers who agree to accept the Medicare terms and conditions. Providers have the right to choose whether they will accept the terms and conditions or not, but if they accept, they cannot bill you directly. All claims must be submitted to the health plan for processing and you are responsible for any applicable copayment and/or coinsurance amounts.
Medicare Special Needs Plan (MSNP)
If you have a chronic disease or live in a nursing home, an MSNP might be right for you. These plans provide specific benefits for specified conditions. For example, if you have a long-term chronic illness, the plan would be tailored around the management of your condition. Often times members may be assigned a care manager to coordinate your care. All MSNP plans include prescription coverage (copayments may apply).
Medical Savings Accounts (MSA)
A high deductible is the key element to MSA plans. The plan will not pay for any services before the yearly deductible is met. Your Medicare Advantage plan will deposit money into your MSA bank account (once annually), these monies can be used to pay for your health care expenses (even if it goes toward the plan deductible). Once you have used all the money in your account, you will be responsible for any remaining deductible or out-of-pocket expenses for the year.
The major advantage to enrolling on a Medicare Advantage plan is its guaranteed issue. There are no medical questions to answer and you coverage cannot be denied. When you choose an Advantage plan, you essentially sign over your Medicare benefits to the insurance company who will administer the plan. The monthly premium is low and is available at no cost in some areas. Additionally, Advantage plans cover all Medicare approved services, and many offer additional benefits such as vision, dental, and gym membership.
Additional information is available at www.medicare.gov.
Stacey Donaldson - I have worked in the life and health insurance industry for nearly 15 years. I have recently begun to dive into the world of freelance ...
