What are the Types of Medicare Advantage Plans?

When you first enroll in Medicare, you can choose to get your coverage through Original Medicare or a Medicare Advantage Plan. Medicare Advantage, sometimes called Medicare Part C, offers an alternative way to get your Medicare benefits. These plans are offered by private insurance companies and provide all of your Part A and Part B coverage.

Medicare Advantage Plans must cover the same services that Original Medicare does, but they can do so with different costs, coverage rules, and restrictions depending on the type of plan you select. Understanding the different types of Medicare Advantage Plans can help you choose the best coverage option for your healthcare needs and budget.

Medicare Advantage Plan Basics

Here is some background information to understand before learning about the types of plans available:

• Medicare Advantage Plans are sometimes called “Part C” or “MA Plans”
• Plans are run by private insurers approved by Medicare
• You must have Original Medicare Parts A and B to join
• Coverage includes all Medicare Part A and Part B benefits
• Many plans offer extra benefits not covered by Original Medicare
• Costs and provider networks vary by plan

Medicare pays set monthly amounts to the Medicare Advantage Plans for your coverage. In return, the plans provide all your Medicare benefits.

Now let’s take a deeper dive into the main types of Medicare Advantage Plans available.

Health Maintenance Organization (HMO)

A Health Maintenance Organization (HMO) plan is one common type of Medicare Advantage Plan. Key features of HMO plans include:

• You must use doctors and facilities in the plan’s network except in emergencies
• Your care is managed by a primary care physician you select from the network
• Referrals are required from your PCP to see most specialists
• No out-of-network coverage except emergencies
• Copays for services vary by plan

HMO Medicare Advantage Plans generally have lower premiums than other plans, but keep in mind you’ll pay the full cost for any care from out-of-network providers except emergencies. They also require referrals for specialists.

HMOs offer coordinated care and an affordable premium since you stay in-network, but lack flexibility to see certain doctors or facilities.

Preferred Provider Organization (PPO)

Another Medicare Advantage Plan type is the Preferred Provider Organization (PPO). Here’s how PPOs work in 2023:

• PPOs have network providers you are encouraged to use
• You pay less when seeing in-network providers, more when going out-of-network
• No referrals required to see specialists
• All services covered by Original Medicare are included
• Typically higher premiums than HMO plans

PPOs cost more than HMOs on average, but provide more flexibility to see providers outside the network for an additional cost. You also don’t need referrals for specialists.

This makes them a good option for people who want provider choice beyond a network or have specialists not included in an HMO.

Private Fee-For-Service (PFFS)

A Private Fee-For-Service (PFFS) plan is a less common type of Medicare Advantage Plan. Key PFFS features include:

• Can go to any Medicare-approved doctor or hospital that accepts the plan’s payment terms
• No networks
• Plan determines how much you must pay out-of-pocket for services
• Some plans provide prescription drug coverage

Because they have no networks and allow you to see any Medicare provider, PFFS plans offer maximum flexibility. However, you may pay more out-of-pocket, and not all providers accept PFFS plans. But they give you open access to seek care from any Medicare providers nationwide.

Special Needs Plans in 2023

Special Needs Plans (SNPs) are Medicare Advantage Plans that serve specific groups of people. There are 3 types of Special Needs Plans:

• Chronic condition SNPs: For people with certain chronic illnesses like diabetes or heart disease
• Dual eligible SNPs: For those with both Medicare and Medicaid
• Institutional SNPs: For individuals living in institutions like nursing homes or needing that level of care

SNPs tailor their benefits, provider networks, and drug formularies to best meet the needs of the particular population they serve.

For example, a Chronic Condition SNP for diabetes may offer extra vision and foot care services and have an endocrinologist in network. Institutional SNPs coordinate care between the facility and healthcare providers.

How Do I Choose the Right Type of Medicare Advantage Health Plan?

Choosing the right type of Medicare Advantage Plan involves:

• Comparing costs – Premiums, deductibles, copays, and maximum out-of-pocket costs
• Reviewing coverage details – Services covered, drug formularies, extra benefits
• Checking networks – Locations and types of providers available
• Assessing healthcare needs – Chronic conditions, frequent specialists, healthcare usage
• Determining preferences – Flexibility in providers, use of referrals, desire for extras

Those who travel often or want access to specific doctors may prefer a PPO, while those with chronic illness may benefit most from a SNP for their condition.

Use Medicare’s Plan Finder tool at Medicare.gov to compare Medicare Advantage Plan options in your area by cost, coverage, and other features.

Should You Choose Medicare Advantage or Original Medicare?

Some key points to consider when deciding between Medicare Advantage and Original Medicare:

• With Original Medicare you can see any doctor nationwide who accepts Medicare. Medicare Advantage Plans have network restrictions.
• Medicare Advantage offers all-in-one convenience, while Original Medicare requires coordinating deductibles, coinsurance, and supplement plans.
• Original Medicare does not cover vision, dental, hearing aids, or other extra services. Many Medicare Advantage Plans include extra benefits.
• You can only join a Medicare Advantage Plan at specific times of year, while you can enroll in Original Medicare at any time.

Look at the total costs, benefits, convenience, and provider access to select the type of Medicare coverage that best meets your needs.

Can You Switch Between Medicare Advantage and Original Medicare?

You can switch from Original Medicare to a Medicare Advantage Plan during Medicare Open Enrollment from October 15 to December 7 each year. Your coverage will take effect January 1.

Switching from Medicare Advantage to Original Medicare can also be done during this period. You can also move between Medicare Advantage Plans at this time.

Outside of open enrollment you may be locked into your plan for the year, unless you qualify for a Special Enrollment Period due to specific circumstances like a recent move.

So it’s important to review your coverage options annually during open enrollment to decide if you want to make changes for the upcoming year.

Key Takeaways

• Medicare Advantage Plans provide all Medicare Part A and Part B coverage through private insurers.
• The main types of plans are HMOs, PPOs, PFFS plans, and Special Needs Plans for designated groups.
• HMOs offer coordinated care through a network of providers and require referrals to specialists.
• PPOs allow in and out-of-network care for varying costs and don’t require referrals.
• PFFS plans let you see any provider willing to accept the plan’s terms and payment rates.
• Choose the right “type” of Medicare Advantage Plan based on costs, coverage, providers, healthcare needs and preferences.
• Compare Medicare Advantage Plans to Original Medicare annually during open enrollment to decide if you want to switch your coverage.

Learning about the different types of Medicare Advantage Plans helps you select the right one to meet your healthcare and coverage needs for the upcoming year. Consult a Medicare specialist if you need help weighing the options.

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FAQS

What are the different types of Medicare Advantage Plans?

There are several types of Medicare Advantage Plans, including Health Maintenance Organization (HMO) plans, Preferred Provider Organization (PPO) plans, Private Fee-for-Service (PFFS) drug plans, Special Needs Plans (SNPs), and Medical Savings Account (MSA) plans. Each type of plan has its own characteristics and benefits.

How do I find the best Medicare Advantage Plan?

To find the best Medicare Advantage Plan for your needs, you should consider factors such as the plan’s coverage, network of healthcare providers, costs, and your specific healthcare needs. You can compare different plans using the Medicare Plan Finder tool on the official Medicare website or consult with a licensed insurance agent.

What does Medicare Part C cover?

Medicare Part C, also known as Medicare Advantage, typically provides coverage for all the services covered by Original Medicare (Part A and Part B). Additionally, Medicare Advantage Plans may offer extra benefits such as prescription drug coverage (Part D), dental, vision, hearing, and fitness benefits. The specific coverage and benefits vary from plan to plan.

What is Prescription Drug coverage under Medicare Health Advantage Plans?

Some Medicare Advantage Plans include prescription drug coverage, while others do not. If you want prescription drug coverage, you should choose a Medicare Advantage Plan that includes this benefit. These plans are called Medicare Advantage Prescription Drug (MA-PD) plans.

What is a Special Needs Plan (SNP)?

Special Needs Plans (SNPs) are Medicare Advantage Plans that cater to individuals with specific health conditions or special healthcare needs. SNPs provide specialized care and benefits tailored to the needs of their members, such as chronic condition management or coordination of care for dual-eligible beneficiaries (those who have both Medicare and Medicaid).

Are Medicare Supplement Plans the same as Medicare Advantage Plans?

No, Medicare Supplement Plans (also known as Medigap) are different from Medicare Advantage Plans. Medicare Supplement Plans help cover the gaps in Original Medicare (Part A and Part B), such as deductibles, copayments, and coinsurance. Medicare Advantage Plans, on the other hand, replace Original Medicare and include additional benefits beyond what Original Medicare covers.

Do Medicare Advantage Plans cover prescription drugs?

Medicare Advantage Plans may include prescription drug coverage. However, not all plans offer this benefit. If you need prescription drug coverage, make sure to choose a Medicare Advantage Plan that includes it or consider getting a separate Medicare Part D Plan for prescription drug coverage.

Can I choose a Medicare Advantage Plan if I already have separate Medicare drug coverage?

Yes, you can choose a Medicare Advantage Plan even if you already have separate Medicare drug coverage (Medicare Part D). However, if you join a Medicare Advantage Plan with prescription drug coverage, you will no longer need your separate Part D Plan, as the prescription drug coverage will be included in your Medicare Advantage Plan.

What costs and coverage should I expect with Medicare Advantage Plans?

The costs and coverage of Medicare Advantage Plans vary from plan to plan. In general, Medicare Advantage Plans have different copayments, coinsurance, and deductibles than Original Medicare. Some plans may have low or no monthly premiums, while others may have higher premiums but offer more comprehensive coverage. It’s important to review the details of each plan to understand its costs and coverage.

Can I choose any healthcare provider with a Medicare Advantage Plan?

Medicare Advantage Plans may have a network of healthcare providers, and it’s important to understand the plan’s network before enrolling. In most cases, you will need to use healthcare providers within the plan’s network to receive the highest level of coverage and avoid higher out-of-pocket costs. However, some plans may allow you to see out-of-network providers, but you may have to pay higher costs.