TYPES OF
MEDICARE ADVANTAGE
HEALTH PLANS
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HEALTH MAINTENANCE ORGANIZATIONS :
HMOs
Health Maintenance Organizations, also referred to as HMOs,
are already available to you as a Medicare covered option.
HMOs will still be available as one of the Medicare
Advantage plans.
Medicare Advantage HMOs are currently "risk-based".
This means that the HMO and its participating providers
assume a financial risk. Risk-based HMOs receive
a fixed payment from CMS for each Medicare beneficiary that
is enrolled, regardless of the actual services received by the
enrollee. The amount CMS pays is called the "capitated
rate". If the services provided are more than the
payment received, the HMO could lose money.
When you enroll in a Medicare Advantage HMO, you are agreeing
to be covered by your HMO instead of Medicare. Your
HMO will provide you all of your Medicare covered services
and may provide you with some additional services as well.
Because your HMO provides your health care services,
you are limited to the health care providers that participate
in your HMO. Some HMOs, however, have a
"point-of-service" option which allows you to receive services
outside of the network. You may have to pay more for
these services. If your HMO does not have a
"point-of-service" option and you choose to go outside of the
plan for your treatment, you will have to pay out of your
own pocket. Medicare will not pay and neither will
your supplement.
The HMO will be limited to a specific geographical area.
If you travel, you should realize that you may need to
purchase additional insurance to cover any non-emergency
treatment you need while traveling.
You may be reponsible for a premium with a Medicare Advantage
HMO. This premium may be in addition your Part B
premium. After this premium is paid, the plan will
provide all Medicare covered services. The plan may
also provide services that would not be covered under
traditional Medicare and it may have co-payments or
cost-sharing amounts, such as a charge of $10 per office
visit.
If you disagree with any action an HMO takes or refuses to
take, you have grievance and appeal rights the plan must
honor. See our section on Appeals for more information.
PREFERRED PROVIDER ORGANIZATIONS :
PPOs
One option available to you under Medicare Advantage is the
Preferred Provider Organization. Preferred Provider
Organizations are also known as PPOs.
PPOs offer services to sponsoring organizations through a
network of health care providers. PPOs are made
available to you through sponsoring organizations, such
as your employer or insurance company.
If you enroll in a PPO, you are not restricted to the network
providers. This allows you to see the doctor or
provider of your choice. However, if you receive
services from a provider outside of your network, you may have
to pay more for those services.
It is important for you to remember that, if you receive
services from your network provider, you may receive more
extensive coverage.
If you disagree with any action a PPO takes or refuses to take,
you have grievance and appeal rights the plan must honor.
See our flyer on Appeals for more information.
PROVIDER SPONSORED ORGANIZATIONS :
PSOs
Provider Sponsored Organizations (or PSO's)
are just one of the programs available to you under Medicare
Advantage. A PSO is a health care organization which
consists of either a single provider or a group of affiliated
providers. The providers offer a substantial
proportion of health care items and services directly to you.
If you choose to enroll in a PSO plan, your health care
services will be supplied through a group of providers who
are all affiliated with a single PSO plan. If you
receive non-emergency services outside of the plan, you will
have to pay out of your own pocket. Medicare will not
pay for the services.
Under a PSO, you will be able to receive all Medicare covered
services within the same PSO plan. In fact, a PSO must
offer all Medicare covered services that you would have been
eligible to receive under traditional Medicare.
Not only are you able to receive all of your Medicare covered
services under a PSO, you can also get most of your other
health care services from your PSO. This means that your
PSO provider group may be able to meet all of your health
care needs.
If you disagree with any action a PSO takes or refuses to take,
you have grievance and appeal rights the plan must honor.
See our flyer on Appeals for more information.
PRIVATE-FEE-FOR-SERVICE-PLANS
Private-fee-for-service plans are just one of the new choices
available to you under Medicare Advantage. In
private-fee-for-service plans, your health care providers
will be reimbursed on a fee-for-service basis.
"Fee-for-service" means that the insurance company will pay
for the services you receive based upon the rate it sets.
These rates could be more or less than what traditional Medicare
would have paid for the same service. You should also
expect to have some out-of-pocket costs. Furthermore,
like traditional Medicare, providers will not be allowed to
bill you greater than 115% of the amount approved by the
insurance company.
If you are concerned about being able to see the doctor of your
choice, it is important for you to know that
private-fee-for-service plans most likely will not restrict
your ability
to choose the doctor you want.
As you can see, a private-fee-for-service plan will operate
like traditional Medicare in many respects. In
private-fee-for-service plans, however, rates will be set by
the insurance companies. It remains to be seen whether
or not this type of plan will be a "better deal" than traditional
Medicare.
MEDICAL SAVINGS ACCOUNTS :
MSAs
Medical Savings Accounts, also known as MSAs, are available
for you to choose as an option under Medicare Advantage.
MSAs will be made up of contributions from CMS. You will
then be able to withdraw these funds to pay for your medical
expenses. These expenses do not have to be expenses
that Medicare would have covered.
MSAs allow you to store your funds from year to year.
Because you are able to accumulate these funds from year to
year, you can build up a reserve of funds which you can use
for medical expenses in the future. Another important
fact for you to know is that these funds are not taxable.
If, however, these funds are withdrawn for a non-medical purpose, the amount of the
withdrawal will be counted towards your income. In
addition, you will be subject to a penalty of up to 50% of the withdrawal
amount. To find out if an MSA will benefit you from a
tax perspective, you may want to talk to your accountant or financial advisor.
If you decide to enroll in an MSA, you will need to purchase an
approved Medicare Advantage MSA insurance plan with a high
deductible. Once you meet your annual deductible, the
MSA must at least pay for all of your Medicare covered items
and services. Your premium will be paid by CMS.
Please be aware that, like some Medicare Advantage plans, if you choose a
Medicare Advantage MSA, the MSA will replace your traditional
Medicare. Medicare Advantage plans may restrict you to
a certain "network" of providers or may allow you to see the
provider of your choice. The plan may not pay the entire
cost of the services you receive, even after you meet your
deductible.
Some people are not eligible to enroll in Medicare Advantage MSAs
at this time. If you are in a Federal-Employee Health
Benefit Plan, or are insured either through the Veteran's
Administration or Department of Defense, you will not be able
to choose an MSA until the administration certifies that this
type of plan will not increase spending for the Federal
Government. If you are receiving QMB, SLMB, QDWI, or
other Medical Assistance plans that pay your Medicare premiums,
you also may not enroll in an MSA plan.
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