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Medicare Advantage Options

Medicare comes in four different parts, each with its own function. Part A features hospital, home health and hospice benefits, while Part B mostly offers coverage for preventive services. Part D Medicare only covers prescription drug costs. But Part C, Medicare Advantage (MA), can do all of these. Medicare Advantage plans lets beneficiaries combine their Part A and B benefits with additional ones like vision, dental and prescription medications. MA plans are sold by private insurance companies, which decide the benefits they offer and the cost of premiums, co-payments and deductibles, and can be purchased in several different forms.

  1. HMO Plans

    • Most insurance companies which sell Medicare Advantage, no matter what kind of benefits they come with, offer HMO (health maintenance organization) policies. Buyers who get their MA plans as an HMO policy generally have to choose a primary care physician from doctors who are part of their insurance company's network. They must then get all referrals for other services from this doctor and all medical treatment from other providers in the network. However, HMOs also have lower co-payments than other kinds of plans. You may be able to find an HMO-POS plan in your area, which lets you go outside your network if you agree to pay more for your services.

    PPO Plans

    • Another popular option for Medicare Advantage are PPO (preferred provider organization) plans. The exact rules governing PPOs can differ, but most PPOs work in a similar way to HMO-POS plans. You pay lower costs if you stay inside your network but can go outside for higher fees. Medicare Advantage PPO plans can be either local or regional. Local plans serve all the counties in its service area, while regional plans serve only one. Users generally do not need to get referrals from their primary care physician before seeing specialists or getting other medical services with PPOs. HMO and PPO policies often, but not always, include prescription drug coverage.

    Special Needs Plans

    • Special needs plans are Medicare Advantage policies tailored to people with certain conditions and diseases. Special needs plans always include prescription drug benefits along with all the benefits of Part A and Part B. Membership in special needs MA plans is limited. You must lie in the plan's service area and have a condition such as diabetes, HIV/AIDS or heart failure. You may also qualify for a special needs plan if you receive both Medicare and Medicaid, require home nursing care or live in a nursing home.

    Medical Savings Account Plans

    • Though they are rarer than HMOs, PPOs and special needs plans, you may also be able to find Medicare Advantage policies which work with medical savings accounts. These are high-deductible plans which deposit money into your medical savings account rather than paying directly to providers. Money in medical savings accounts is tax-free and can be used to pay any health care service, even those which are not covered by Medicare. When you use this money for Part A and Part B services, it counts toward your policy's deductible. You cannot be charged more than the amount approved by Medicare for services.

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