Medicare Advantage Problems

The Medicare Modernization Act of 2003 brought the Medicare Advantage Plan into existence. The Advantage plan provides additional financial assistance to seniors who have Medicare Parts A and B. And while it does pick up some of the costs not covered by traditional Medicare plans, there may be problems with plan coverages depending on a person's individual preferences.

• A doctor's stethoscope

Identification

• Medicare Advantage Plans---also known as Medicare Part C---are government-sponsored programs that follow the same guidelines in terms of covered and non-covered services. However, the actual plan policies are issued by independent insurance companies. As Medicare Parts A and B cover hospital and medical expenses, Part C is designed to help with the remaining deductible and copay amounts required under Parts A and B. In addition, Medicare Part C grants participants a little more flexibility in choosing doctors and hospitals.

Types

• Individuals who sign up for a Medicare Advantage Plan can choose from four plan options. Health maintenance organization (HMO) plans are the most popular, since they are the least expensive, however participants can only choose from a certain network of doctors and hospitals. Provider-sponsored organization (PSO) plans are administered through a single facility where medical services are performed. These facilities also handle all insurance paperwork requirements. Point-of-service (POS) plans allow participants their choice of doctors and hospitals, so these plans are one of the more expensive options. Preferred provider organization (PPO) plans work in much the same way as POS plans. The only difference is PPO plans serve participants who live in local or regional areas while POS plans service mainly urban areas.

Independent Insurance Companies

• Medicare Advantage plans, though government supported, are issued by independent insurance companies. This means different companies can offer additional benefits on top of the Medicare Part C coverage. Some may provide vision and/or dental coverage, some may provide prescription coverage, and the prices may vary depending on what's included in a person's plan. The only problem with going through an independent insurance company is that a company can decide to pull out of an area, or discontinue a plan option at any time. Plan participants are then left to find alternative coverage on their own. In many cases, companies will discontinue a plan or pull out of an area when there is a low demand for its services there.

Nonstandardized Plans

• With traditional Medicare coverage, plan options and plan rates will remain the same. Plans are issued by one agency at the same price across the board, regardless of location. With Medicare Advantage Plans, plan rates can vary depending on which company is issuing the policy. Plan options in terms of what services are included can also vary depending on the company, and the area in which they're located. This can pose a problem if plan participants in a particular area have a limited number of companies from which to choose.

Choice of Doctors

• When individuals enroll under a traditional Medicare plan, they can choose any doctor or hospital as long as the doctor or hospital is a participating provider within the Medicare program. With Medicare Advantage plans, individuals are restricted to doctors and hospitals within their plan network. In addition, any referrals made to a specialist must come from a doctor within the network. PPO and PSO plans do allow more flexibility in choosing care providers, however problems may arise in terms of what services are covered. In some cases, certain services may not be covered at all depending on the type of plan a person has.