What is Medicare Advantage?
Medicare Advantage (Part C) is a type of coverage offered by a private insurance company that contracts with Medicare.
Medicare Advantage coverage is not ‘Original Medicare.’ Medicare Advantage plans must offer the basic Medicare Part A and Part B benefits. Most plans include Part D prescription drug coverage.
There are two major differences between Medicare Advantage and ‘Original Medicare’:
- Medicare Advantage plans are Network-based in the form of HMO, PPO, or PFFS.
- Claims are paid through the private insurance company, not through the federal Medicare Program.
Health Maintenance Organization (HMO)
- An HMO is an ‘In-Network’ care plan with an exception of out-of-network emergency care or dialysis
- HMO plans usually require you to pick a primary care provider or PCP in network
- Specialist visits will likely need a referral
- Certain routine screenings like mammograms or colonoscopies DO NOT need a referral
- Most plans have prescription drug coverage
Preferred Provider Organization (PPO)
- PPO plans are managed care plans based on a ‘Network’
- Out-of-network coverage is available with a PPO, but at a higher cost to the insured
- Usually has Part D or prescription coverage benefit
- Under a PPO plan you DO NOT need to choose a primary care provider or PCP
Private Fee For Service (PFFS)
- These plans typically have fewer network restrictions than other plans
- Does not require a primary care provider or PCP
- Does not require a referral to see a specialist
- Out-of-network providers have the right to accept the plan’s payment terms or not
IMPORTANT: With PFFS plan an out-of-network provider/hospital can consider the plan’s payment terms on a service by service basis.
Is Medicare Advantage always the way to go?
The marketing around Medicare Advantage makes it seem like a “no-brainer,” and it may be the right choice for some people. But in our experience serving clients throughout the Omaha/Papillion metro and beyond, it’s important to cut through the marketing fluff so you understand how these plans actually function — and whether they’ll meet your needs and expectations. We will never default to only one choice for our clients. We’ll walk you through the pros and cons of both Medicare Advantage and Medicare Supplement so your plan fits your needs.
Medicare Advantage FAQs
The short answer No. Medicare Advantage has the same benefits, plus some extras (like dental, vision, hearing, and gym memberships), as Original Medicare, but those benefits are administered through a private insurance company. The plan structure is network-based, like an HMO or PPO health plan.
It really depends on the plan structure: is it an HMO or PPO, or somewhere in between? HMO plans generally require in-network doctors and services. PPO plans allow out-of-network care, but you will pay higher copays and coinsurance for out-of-network providers.
Yes, you can leave and go back to Original Medicare. There are two separate enrollment periods during the year: one in the fall, Oct. 15- Dec. 7th, and one after the new year, Jan 1st -March 31st, when you can leave a Medicare Advantage plan and return to Original Medicare. A word of caution though, going back to Original Medicare doesn’t mean you will automatically qualify for a Medicare Supplement.
Yes, Medicare Advantage plans cap out-of-pocket costs annually. Whereas Original Medicare by itself, with no supplement, will not cap out-of-pocket costs annually. Costs usually come in the form of copays or coinsurance depending on the services you receive.
In many cases, no, they do not cost you extra premium. But that trend is beginning to change with many carriers offering plans with modest monthly premiums attached.