Types of Medicare Advantage Plans – Considering a Medicare Advantage plan? The most important thing to know before you enroll is what type of Medicare Advantage plan you’re looking at. Each one has different rules, which have a significant impact on how much you’ll pay for services.
There are six types of Medicare Advantage plans and today, we’ll review the basics of each one.
Health Maintenance Organization (HMO)
HMOs are one of the most popular types of Part C plans because they have very low monthly premiums – often $0 per month. If you don’t mind their limitations, these are a great option to reduce your monthly expenses.
If you enroll in an HMO Medicare Advantage plan, you’ll need to designate a primary care physician (PCP). Your PCP will provide and coordinate all of your general care, and will give you a specialist referral when needed. You must obtain this referral before seeing a specialist, or your claim will be denied.
You’ll also need to choose providers who participate in the insurance company’s HMO network because you won’t have any benefits outside of the network in most cases. This applies to any of the extra benefits you have as well. For example, many Part C plans include dental care, so you’ll need to choose a dentist that participates in the HMO plan.
Preferred Provider Organization (PPO)
PPO plans are another popular choice. They work much like the HMO plans, but offer enrollees a little more freedom. First, you won’t have to designate a PCP, nor will you have to get a referral to see a specialist. Second, while choosing a PPO provider will give you the most benefits, you are allowed to go outside of the plan’s network if you want. However, you will pay more out-of-pocket if you see non-PPO providers.
In addition to the ability to go outside the network, there is also typically a larger PPO provider network than there are HMO networks. HMO plans have some of the lowest fee schedules, which is why not as many providers choose to participate in those plans. PPO fee schedules are higher, so more providers elect to participate.
Point-of-Service (HMO-POS)
Point-of-Service plans are a nice mix of the HMO and PPO options. Like the original HMO, members must choose a PCP. Unlike the original HMO, they won’t have to have a referral to see a specialist. In addition, a POS plan allows benefits from non-HMO providers, just like the PPO plans do. However, there are a couple of notable differences here.
First, a POS plan will have two deductibles: one for in-network services and one for out-of-network services. That is different than the PPO plan, which has just one deductible regardless of network participation. Second, there may only be out-of-network coverage for certain things. For instance, some HMO-POS require you to stay within the HMO network but allow outside coverage for dental care only. Be sure to know the limitations of your POS plan.
Private Fee-for-Service (PFFS)
PFFS Medicare Advantage plans determine how much they will pay providers and how much they will charge their members. Any provider who accepts Medicare can choose to accept (or not accept) a PFFS plan. If the beneficiary sees a provider who does not accept the plan’s payment terms, they will pay much higher out-of-pocket costs, even in emergency situations.
Providers can choose to stop accepting payment terms at any time, so members must check their participation status each time they receive care. You do not have to designate a PCP, nor do you need to get a specialist referral.
PFFS plans commonly do not include prescription drug coverage. They are one of two Medicare Advantage plans that allow you to enroll in a separate Part D plan. Others, like the ones we’ve already discussed, do not allow you to enroll in Part D if it is not already included within the plan.
Special Needs Plans (SNP)
Special Needs Plans have different eligibility requirements than other Part C plans. The others only require you to be enrolled in Parts A and B of Original Medicare. SNP plans are limited to those with either chronic conditions, lower incomes, or who are living in an institution.
There are three types of SNP plans:
- C-SNP (chronic conditions)
- D-SNP (dual eligible)
- I-SNP (institutionalized)
Each plan is tailored to the needs of the individual. For example, you could qualify for a C-SNP if you have diabetes. Your benefits would be tailored to help manage your diabetes and make sure you get the proper care. The drug formulary would be specific to those with diabetes, and you may even get a care coordinator to help with scheduling appointments and claim status.
D-SNPs are for individuals who require some financial assistance. “Dual eligible” refers to being eligible for financial assistance and Medicare. Many individuals who enroll in a D-SNP are also eligible for Medicaid, but that is not always the case.
Medical Savings Account (MSA)
The last kind of Medicare Advantage plan is the Medical Savings Account. Some don’t realize that these are in fact Part C plans, because they work a bit differently. MSA plans are very similar to a high-deductible plan you might have had prior to Medicare. They have high deductibles – usually around $3,000 – $5,000 – and also come with a separate savings account you can use to help with that deductible. (Kind of like a Health Savings Account or HSA.)
You can use an MSA with any provider, not just a specific network. You’ll be responsible for the entire deductible, and then most MSA plans pay the rest of your medical expenses at 100%. Some include the extra benefits found in other Medicare Advantage plans, but you’ll often need to enroll in a stand-alone Part D plan to get prescription drug coverage.
