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Description of Medicare Advantage

Medicare Advantage, established in 2003, is a very popular choice amongst Medicare enrollees. According to the Health Assistance Partnership, 23 percent of Medicare recipients choose Medicare Advantage. The private health care program was created out of the Medicare Modernization Act of 2003 to save government funds spent on Medicare. Lawmakers hoped that private insurance companies could keep costs down by emphasizing prevention.

  1. Definition

    • Medicare offers Medicare Advantage, which is an alternative way of receiving your Medicare benefits through a private health plan. These plans are managed care plans, meaning the insurance companies manage the financial and health aspects of the member's care. Medicare Advantage plans are paid subsidies by the federal government.

    What it Covers

    • Medicare Advantage plans must offer the same coverage as traditional Medicare, although most plans offer more. This means that Medicare Advantage plans offer inpatient and outpatient benefits. Often times, these plans are packaged with a Part D drug plan as well. Beneficiaries who want Part D and a private plan should select one of these.

    Types of Plans

    • Medicare Advantage plans look a lot like your average private health plan that you'd see outside of the Medicare market. There are several different types of plans available, including Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO), and Private Fee-For Service (PFFS) plans. There are also more specialized plans, including Special Needs Plans (SNP) made specifically for those with a particular disease, Medicare Medical Savings Accounts (MSAs) and Provider Sponsored Organizations (PSO). The types of plans that a beneficiary can purchase depends on what is available in their area.

    Rules and Regulations

    • All Medicare Advantage enrollees are entitled to the same rights as those enrolled in traditional Medicare. This means that if the Medicare Advantage plans do not cover something that is basic Medicare coverage, then the beneficiary has the right to appeal.

      While the Medicare Advantage must provide the same coverage, they are allowed to do so with different costs and restrictions. Each private health plan has rules that are very different from the next, and the beneficiary should familiarize themselves with his plan's rules.

      Unlike traditional Medicare, which has coverage nationwide, most Medicare Advantage plans limits beneficiaries to a network, meaning they can only see doctors who contract with their plans. Furthermore, if a private health plan folds or is no longer local to the beneficiary, he may join another Medicare Advantage plan.

    Price

    • Medicare Advantage plans are typically more costly than traditional Medicare. Any Part A or Part B premium is usually still required, and most of the time, Medicare Advantage plans also charge another Part B premium in addition to the standard Part B premium. Beneficiaries also pay co-payments when receiving any services.

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