Kinds of Medicare Advantage Plans – Did you know that not all Medicare Advantage plans work the same way? There are actually six different types of Medicare Advantage plans, and you’ll need to know which one you have so you can get the most out of your benefits.
Each Medicare Advantage plan has its own summary of benefits, so you’ll need to read each one carefully before enrolling. But today, we’re going to give you the basics of how each kind works so you can know which type of Part C plan you might want to look at.
Health Maintenance Organizations
We’re going to start by talking about HMO plans because they are one of the most popular Part C plan types. HMO Advantage plans often have very low premiums – usually just $0 a month! However, they do have some limitations and rules, and you’ll still have out-of-pocket costs, so it’s important to consider those before enrolling.
HMO plans require their members to receive care from an in-network provider. That provider, or even the facility itself – must be contracted with your HMO plan and the insurance company. If you go outside the plan’s service area, you’ll be responsible for the entire bill. (Emergencies are the exception to the rule.)
You’ll also need to choose a primary care physician or PCP. That person will be your primary provider, will coordinate all your medical care, and will give you referrals if needed. You must obtain a referral in order to have a visit to a specialist covered by your plan.
All Medicare Advantage plans have maximum out-of-pocket (MOOP) limits. Once you’ve paid that maximum amount, the plan will cover your medical expenses at 100%. However, you’ll have a higher MOOP for out-of-network services. For example, maybe you’ll have a $4,500 out-of-pocket maximum for in-network care but a $10,000 maximum for out-of-network services.
Preferred Provider Organizations
PPOs are another type of popular Part C plan. They are very similar to HMO plans but often have a larger network of providers to choose from. HMO insurance plans have lower reimbursement rates for providers, which is why there are more PPO providers than HMO providers. Even so, you can still find many $0 or very low premium PPO plans.
PPO plans do not require you to designate a PCP, nor do they require you to get a specialist referral. In addition, you can see non-PPO providers and still have some out-of-network benefits. You’ll pay more out-of-pocket, but that’s certainly better than the full bill.
You’ll see these plans abbreviated as HMO-POS plans. They are a mix of the HMO and PPO plan types. At their core, they are an HMO plan but let’s talk about how they’re slightly different than a traditional HMO.
In a Point-of-Service plan, you’ll have one deductible for in-network care and one deductible for out-of-network care.
First, you’ll still have to choose a PCP. However, you won’t have to get a referral to see a specialist. You’ll also have benefits outside the network like you would in a PPO plan, but again, you’ll pay a little more for those services. For example, let’s say your PPO plan pays for 80% of an in-network service. If you go outside the network, maybe they’ll only pay 50% of the same service. One important thing to find out is if the out-of-network benefits only apply in certain circumstances. For instance, you may only have out-of-network benefits for some providers, like a dentist or optometrist.
The deductible is one thing that is different in an HMO-POS plan. In a PPO plan, you’ll only have one deductible for both in- and out-of-network services. In a Point-of-Service plan, you’ll have one deductible for in-network care and one deductible for out-of-network care.
Special Needs Plans
SNPs have unique eligibility requirements. To enroll in any other Medicare Advantage plan, you must first enroll in Parts A and B of Original Medicare. To enroll in an SNP, there are a few more requirements. There are three kinds of Special Needs Plans. C-SNPs, which are for individuals with chronic conditions; D-SNPs, which are for people who are “dual” eligible for Medicare and Medicaid; and I-SNPs, which are for individuals who live in an institution.
These plans tailor their coverage levels and benefits to the individual’s condition or financial status. For example, a C-SNP can be tailored for someone with multiple sclerosis. That person would have a team of professionals that help to coordinate care and medical bills. They would also have a drug formulary that is specific to the medications they need to manage their condition.
Private Fee-for-Service Plans
The last couple of Medicare Advantage plans we’ll discuss are quite unlike the first four.
PFFS plans are more common in rural areas of the country, where there are very few Medicare Advantage plans available. A provider who accepts Medicare assignment can choose whether or not they want to accept a PFFS plan’s payment terms. These plans decide how much they will pay the provider and how much the member will need to pay for services. If the provider does not accept the payment terms, the member will be responsible for much higher out-of-pocket costs, even in emergencies.
Providers can choose to discontinue accepting the PFFS plan at any time, so members must check the participation status before every visit. You will not have to designate a PCP or get referrals if you enroll in a PFFS plan.
If your PFFS plan does not include drug coverage, you are allowed to enroll in a separate Part D plan. This is in stark contrast to the other plans we’ve discussed so far, which do not allow you to enroll in a Part D plan outside of the Medicare Advantage plan.
Medical Savings Accounts
Ready for the last one? If you had a Health Savings Account (HSA) in the past, it will be easy for you to understand an MSA. These plans have a high deductible, usually between $3,000 and $5,000 dollars. However, they also come with a separate savings account that you can use to help with the deductible.
Many insurance companies even include an initial deposit into the account when you open it, and every subsequent year you renew the plan. The deposit will never be enough to cover the deductible, but it will certainly be helpful. Once you’ve paid the deductible for the year, your medical expenses will be covered by the insurance company at 100%.
You can use an MSA plan with any healthcare provider. As long as the provider accepts Medicare, they’ll also accept your MSA plan. Like the PFFS option, you can choose to enroll in a separate Part D plan if drug coverage is not included in your MSA plan.