Medicare Part C - Medicare Advantage Programs

Medicare Advantage Programs are health plans that are offered by private companies, with the advantage of wrapping Medicare A&B and Part D drug plans into one. They usually cost the senior less out of pocket, but they also place limitations on the care provided. There are several types of Advantage plans:  

• HMO’s (health maintenance organizations) are companies that contract with providers of all types in a specific service area to provide medical care to its members. Costs are reduced by using a primary physician and requiring pre-authorization for many services.
• PPO’s (preferred provider organizations) are companies that contract with providers to provide service to members; PPO’s also offer the opportunity to see non-contracted providers at a higher out-of-pocket cost to Beneficiaries, unlike HMOs.  
• PFFS’s (private fee for service plans) are companies that offer private insurance to beneficiaries. They do have to offer a certain level of service required by Medicare, but they can also offer extra services beyond what traditional Medicare offers.
• Special Needs Plans provide extra services for beneficiaries with certain chronic diseases and other specialized health needs and who have both Medicare and Medicaid.
• MSA’s (medical savings accounts) are plans that offer coverage with a higher deductible; Medicare deposits money into a medical savings account that can be used for health care costs. These plans operate pretty much like most privately operated health care savings accounts.

When a senior chooses to enroll in a Medicare Advantage Plan, he “surrenders” his red, white, & blue Medicare card and uses an ID card supplied by the insurance company. The Part B premium continues to be withheld from his monthly social security payments, with the insurance company charging a monthly premium for its care. The cost of the premium depends upon the Advantage plan the senior chooses – each company generally offers several different plans. The most expensive plans usually offer the most services – but it’s possible that a traditional Medicare plan combined with a good Medigap policy can provide the same services for a comparable price with the added benefit of being able to choose your providers.

The reason that Medicare Advantage providers are able to offer low cost plans to consumers is that the federal government pays the insurance company a set amount for each patient on their rolls every month – the amount paid varies according to the geographical area of the country in which the plan operates. The plan pays all of the bills at a deeply discounted rate because they work with contracted providers. 

The greatest advantage of choosing a Medicare Advantage plan is the cost savings to the consumer. In exchange for the out-of-pocket savings, beneficiaries who sign up with Medicare Advantage Plans give up their ability to choose any provider they want. If a Beneficiary insists upon using a non-contracted provider, he will have to pay either some or all of the costs depending upon the plan he is using. Advantage Plans usually employ case managers whose job it is to coordinate the care their customers receive; and ensure that services are provided through contracted providers to lower their costs.

The greatest disadvantage of signing up with a Medicare Advantage plan is that beneficiaries must almost exclusively use plan providers. For plan members who like to travel, they may only have access to emergency care unless they’re traveling in an area served by their plan. A routine visit to a doctor while they’re on the road (such as to renew a prescription) probably won’t be covered, or there will be a greater out-of-pocket cost to the beneficiary if the Advantage plan allows for out of plan providers. In most cases, the senior will have to pay for the visit and request reimbursement from his insurance company – and there’s no guarantee that they’ll be reimbursed for all or part of their medical expenses.

If an Advantage Plan member goes to the emergency room while he’s traveling and it’s recommended that he have a non-emergency surgery, it’s possible that the plan will require that the patient return home for the procedure to be performed by a contracted provider. If the senior has been admitted to the hospital for an emergency condition while on vacation and requires rehabilitation in a nursing home when he’s discharged, it’s possible that the insurance company will negotiate a rate for the patient to receive therapies in the geographical area where they were in the hospital rather than to pay for their transportation home. This makes it difficult for family members to visit the patient; the only other option would be for the patient or his family member to arrange and pay for transportation home in order that the patient receive rehabilitation services at a contracted provider in the area where he lives.

Most Advantage Plans require that patients be assigned a Primary Care Provider (PCP), which is a physician who is paid a monthly amount to manage the care of all of his assigned patients. This means that the physician and his staff must complete paperwork and obtain authorizations for many, many patients – and the physician makes more money if he sees his patients less often (the less he sees the patients, the more patients he is able to have assigned to him). Even if a senior had previously seen a physician under Medicare Part B, if he changes his coverage to an Advantage plan it’s possible that his physician isn’t able to accept new patients under the plan or that the plan will assign another doctor altogether. It can be stressful to change to another doctor for insurance purposes.

Many Medicare Advantage plans contract with a specific nursing home for rehabilitation rather than to have contracts with many different providers in the community. Even if the patient wants to be admitted to another facility it’s not likely to happen – this is how managed care providers keep their costs down. If the patient refuses to go to a contracted nursing home, the other option will probably be to go home. Advantage programs co-payment amounts are different than those of traditional Medicare. Rehabilitation admissions under managed care are often much shorter than those paid under Medicare Part A.

Medicare allows clients to switch between all plan types from October 15th thru December 7 of every year (open enrollment period) with the change being effective January 1st of the following year (example: from Traditional Medicare to an Advantage plan). It is possible to switch between Advantage plans offered in the area during the year. There are extenuating circumstances, such as when a beneficiary moves out of the area that the company serves, the beneficiary’s coverage stops through no fault of their own, or if the company were to stop providing service in the area. But if the patient’s doctor stops providing services for enrollees in the senior’s health plan, this is not an extenuating circumstance and the patient will have to find another doctor and wait for the next open enrollment period to change plans. The senior who has dual eligibility (both Medicare and Medicaid) is able to change plans as often as he wishes.  

All Medicare Advantage plans must offer a certain level of service required by CMS, but many offer plans that include extra services such as dental care or optical care. Some plans offer travel insurance as a part of the insurance package. Because the plans differ so much from each other, it’s important to obtain as much information as possible about the plans before signing up with a particular plan. One way to compare plans is to visit the official Medicare site at www.Medicare.gov and follow the prompts. In most cases, this will help explain the different plans offered in a geographical area.