August 9, 2010
Medicare Advantage Health Plans
Medical Benefits & Prescription Drug Coverage
Private insurance companies offer Medicare health plans, known as Medicare Advantage, that provide the standardized hospitalization and medical benefits on Medicare Part A and Part B. These plans are approved and regulated by Medicare. Some Medicare Advantage (MA) plans include additional benefits that are not part of Part A and Part B such as prescription drug coverage (sometimes referred to as MAPD). MA plans are required to deliver benefits at least as good as original Medicare Part A and Part B but the plan does not have to deliver these benefits in the same way. Some plans have used the higher compensation rates they received from the Medicare program to offer additional benefits to plan members beyond Part A and Part B. An example of this would be dental benefits or vision benefits.
Medicare Advantage plans deliver their benefits to plan members through one or more of the following options:
- HMO - A health maintenance organization (HMO) is a network of health care providers and facilities where you choose a primary care physician to coordinate your care
- PPO - A preferred provider organization (PPO) is also a network of health care providers and facilities but typically you do not need to select a primary care physician and you have more flexible options regarding out-of-network care
- PFFS - A private fee-for-service (PFFS) is a mode of benefit delivery where you are not limited to a network but there are no guarantees that your doctor or hospital will accept the plan
Medicare Advantage plans typically cost less than Medicare Supplement plans but cover different benefits. Recent legislative changes to healthcare in the U.S. may drive up Medicare Advantage monthly premiums so it is important to compare prices before enrolling within a plan. Some Medicare Advantage plans offer premiums as low as $0. However, with recent legislation changing the compensation rate the plan is paid for health services, these $0 premiums may disappear.
The Medicare Advantage program has become very popular. By 2009, there were an estimated 11 million enrollees for these Medicare health plans offered by various private insurance companies. This number represents one out of four Medicare beneficiaries.
Eligibility
People enrolled in both Medicare Part A and Part B are eligible to enroll in Medicare Advantage. Eligible individuals must wait to enroll during an approved enrollment period. After enrolling in Medicare Advantage, you are responsible for continuing payment of your Medicare Part B premium alongside the Medicare Advantage premium.