Types of Medicare Advantage Plans

In case you’re getting ready to sign up for Medicare, which could be just about the most important things you do as you enter the senior years. It is worth exploring Medicare Advantage. You will find a number of different choices when it comes to Medicare Advantage, so be sure to read about the different Advantage plan types before starting your journey into Medicare.

Advantage Plans Explained

A Medicare Advantage (MA) plan is an alternative to Original Medicare Part A and B. A Medicare Advantage program is regulated by Federal Government and State Insurance Commissioners but is operated by a private insurance company. The government has specific guidelines to reimburse the insurance company for the management and maintenance of your plan.

You find the choice of selecting the plan and the benefits you need based on what’s provided in your local insurance market. Insurance companies aren’t required to offer MA plans, but when they do, the law mandates that they have to ensure that the plans cover all Part A and Part B services.

How These Plans Work

Medicare Advantage allows you to select a plan which has features and benefits from Original Medicare. For instance, most Medicare Advantage plans include coverage for prescription medications. They can have completely different premiums, provider networks, coverage levels, copays, and deductibles. They act more like a typical health insurance plan,

Is Medicare Advantage Private Insurance?

Medicare Advantage plans are provided by private insurance companies, and the federal government pays these companies to offer you coverage. The aim of Medicare Advantage is to enable you to check out the private market and find out if one of those Medicare Advantage plans fits your needs and budget much better compared to Original Medicare does.

You are able to have a great grouping of choices that will help you save money, stick with a particular doctor, get access to coverage for services you need to have, or perhaps help you reduce costs on the prescriptions of yours. It’s like purchasing a private insurance plan which is actually sponsored by the government.

Types of Medicare Advantage Plans

There are many different kinds of Medicare Advantage plan. Each one has special characteristics that we will review further down. They include the following categories:

  • Medicare Advantage PPO

  • Medicare Advantage HMO

  • Medicare Advantage HMO Point-of-Service

  • Medical Savings Account

  • Medicare Special Needs Plan

Just like other kinds of insurance that you may have had during your working life, Medicare Advantage plans can have many different characteristics. They are required to cover the same things as Original Medicare Part A and B, but the coverage level and the provider network for those services can vary.

In addition, the copay that you have to pay for a service and your monthly premium can all be different. Some have higher premiums, but better networks and coverage. Others have low premiums, but high copays. The Medicare Advantage plans available to you depend on where you live.

Medicare Advantage PPO

A PPO, or Preferred Provider Organization, is a basic type of insurance with a network of providers. Anytime you get a service within the network, you get a discount. You are free to use a doctor outside the network, but it will likely cost more.

The cost difference depends on the Medicare Advantage plan, your state of residence, and the service. Two different MA PPOs might offer different networks as well as different sets of coverage.

Medicare Advantage HMO

HMO stands for Health Maintenance Organization. In an HMO plan, you cannot go to providers who are outside the network at all unless it is an emergency or urgent need. Often, if you want to go to a specialist under an HMO, you will need a referral from your primary care physician.

On the other hand, the discount for staying in the network tends to be better than with a PPO. This plan is a good fit if you are comfortable with the providers in the network because it tends to deliver good savings.

Medicare Advantage HMO Point-Of-Service

MA considers an HMO Point-of-Service plan to be a balance between the PPO and the HMO styles. You can go to service providers outside the network, but it will cost more and the difference will be bigger than under a PPO. This kind of plan is good if you mostly like doctors in the network, but one or two outside the network is also beneficial for you.

Medicare Special Needs Plan

A Medicare Special Needs Plan is a Medicare Advantage plan that is customized to fit the profile of someone in special circumstances. Usually, these are high-need categories, like people who live in a nursing home, people who qualify for both Medicare and Medicaid, and those who have certain long-term diagnoses. The Medicare Special Needs plan is specialized and not suited for the average consumer.