Medicare Advantage attempts to incorporate the cost-saving measures of "managed care" in a new manner that may take the form of a health maintenance organization, preferred provider organization, health savings accounts or other new variations of traditional health plans.
Medicare Advantage managed care plans may have some out-of-pocket, but they do generally save some of the out-of-pocket costs traditionally associated with original Medicare Parts A and B. Like private insurance, you can choose from Health Maintenance Organizations (HMO's) and Preferred Provider Organizations (PPOs). These organizations contract with Medicare to provide Medicare benefits in a managed care setting. Private Fee for Service plans (PFFS) and Medical Savings Accounts (MSAs) can contract with Medicare to provide Part A and B benefits through an insurance program. Most plans do include a prescription drug benefit.
Medicare Advantage includes new incentives for healthcare organizations to participate in the Medicare managed care program and for beneficiaries to sign up for a private plan, while at the same time instituting bidding processes designed to help control the rising cost of the Medicare program. Organizations will be able to offer a wider variety of health plans. In addition, the now available plans can cater for special needs beneficiaries, those with particularly complex conditions that require many healthcare resources to treat. The reform of Medicare Part C is also designed to provide beneficiaries, especially in rural areas, with more choices of private plans.
Medicare Advantage health plans are reimbursed by the Centers for Medicare and Medicaid Services for each person who enrolls in their plan. Once enrolled in a Medicare Advantage health plan, there are generally no claims to file or bills to submit directly to Medicare since Medicare has already paid the Medicare Advantage health plan for your care.
Because of the fact that Medicare reimburses the Medicare Advantage health plan directly for each enrollee, the monthly premiums for such plans are either $0 or very low.
So, if you are entitled to Medicare Part A, which for most people is premium-free, and you are already are paying for Medicare Part B, it makes sense to at least explore a Medicare Advantage plan available in your area. Medicare Advantage plans are highly regional—they can offer a plan in one county, but not in the next. You need to find out which plan’s service your area.
Current Medicare Advantage options available in Maryland:
- HMO plans, also called Health Maintenance Organization plans, emphasize preventive care but only for services within the HMO network.
- POS plans, otherwise known as Point of Service Plans, offer services outside of a preferred network but also make available a network of preferred providers at a reduced rate, like HMO plans, They typically require a referral from a network primary care physician to access a network specialist; they sometimes offer drug benefits.
- Regionally Expanded Preferred Provider Organization (PPO) plans are similar to POS plans but have broader geographic access to network providers in a larger service area, and with reduced benefits outside the PPO network. They do not typically require a referral from a network primary care physician to access network specialists.
- PSO plans, which stands for Provider-Sponsored Organizations, are similar to the POS plans but are usually organized with physicians that practice in a regional or community hospital. There may or may not be coverage for providers or facilities outside the PSO network, depending upon the plan designs offered. They may require a referral from a network primary care physician to access network specialists.
- Medical Savings Accounts set up in conjunction with private fee-for-service plans providing:
- at least the same benefit coverage levels as Medicare Parts A and B; or
- high deductible coverage.
To join a Medicare Advantage Plan, you must have Medicare Part A and Part B before you can get Part C. In addition, you might have to pay a monthly premium to your Medicare Advantage Plan for the extra benefits that they offer.