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Medicare vs. Managed Care Plans

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Learn the difference between Medicare and Managed Care Plans, and how they correlate.

For those who do not know, Medicare is a federally provided government health care program that helps cover the costs of prescription drugs and medical bills for people aged 65 and over, and also for the disabled. Medicare has four parts, namely Part A (or hospital coverage), Part B (or medical insurance), Part C (or Medicare Advantage managed care plans), and Part D (or prescription drug plans). Medicare Part C and D are provided by private insurance carriers but have been approved by the government.

Let us look into the advantages and drawbacks of Medicare Part C, also known as Medicare Advantage. This type of policy is provided by a private insurance company under the approval of the authorities of Medicare. Many people would like to learn about this particular health insurance as there are a lot of people who opt for it.

Medicare Advantage Managed Care Plan

Instead of obtaining your health insurance through Medicare Part A and B, you can choose to avail of a Medicare Advantage managed care plan. This is basically a privately provided health care plan combining the health benefits of Medicare Part A and B. The government has no control over the cost of Medicare Advantage, but it can regulate who may be entitled to enroll in them and when they can actually enroll.

Health plans under Medicare Advantage may be a health maintenance organization, a preferred provider organization, a private fee-for-service plan, or a Medicare special needs plan. If you choose Medicare Advantage you will get all of your Medicare benefits via this plan. You still have to pay the monthly premium for Medicare Part B plus additional premium should the Medicare Advantage plan offers more coverage. You can decide to bundle your prescription drug insurance with your Medicare Advantage plan or have it separately under Medicare Part D.

Medicare Advantage curbs the cost of co-payments and plan deductibles, and bridges the coverage gap between Medicare Part A and Part B. This means that those people on Medicare Advantage need not purchase Medigap insurance that people who are not on Medicare Advantage would.

An advantage of Medicare Advantage is increased coverage and decreased costs, particularly out-of-pocket costs. In fact, the out-of-pocket costs of Medicare Advantage are lower than that of Medicare Parts A and B. The prescription drug coverage under Medicare Advantage is also typically cheaper than if you get a stand-alone Medicare Plan D.

You also have to be aware that while Medicare Advantage may be cheaper than Medicare Parts A, B, and D combined, it also comes with a set of drawbacks. The first drawback would be possibly limited choice of doctors. You may also go through more steps when seeking treatment by a specialist, which would typically require you to go through a primary care physician first. There may also be some geographic limits in terms of coverage. Finally, your preferred plan may pull out from your geographic location if the company is not making profits.

You need to know what to look for when planning to purchase Medicare Advantage. The first thing to investigate is the network of physicians and health care providers aligned with a specific plan. As with the typical managed care plan, the network of physicians and providers of health care are already named in the plan. If you have a doctor that you wish to keep on seeing, then you should check if they are allied with the plan you are considering.

You also have to look into the process of seeking specialist care under the plans you are considering. A majority of these managed care plans would require you to seek a referral from a primary care physician first before being able to see a specialist. It may pose problems if you need to see a specialist immediately but is forced to wait to secure an appointment with the primary care physician. You should also consider the plan’s claims process. If you wish to appeal a denied procedure under your Medicare Advantage plan, the review will be conducted based on the guidelines set forth by the private plan provider, as they are the ones running the plan after all. So if you plan to acquire alternative treatment procedures, make sure the plan you are considering covers these procedures.

You can reduce, if not diminish the confusion arising out of Medicare by educating yourself on the subject. Luckily, there is an abundance of information in the public domain that you can read. So be sure to read up and keep yourself informed.