Medicare Advantage Explained
Medicare Advantage plans offer all benefits covered by Medicare. Medicare Advantage plans are another way for people eligible for Medicare to receive coverage for medical services.
Medicare Advantage plans are regulated by the Centers for Medicare & Medicaid Services. While Medicare covers services beneficiaries receive from any healthcare facility or any doctor who accepts Medicare, Medicare Advantage plans give their members a specific network of providers and hospitals from which to receive services.
Members of a Medicare Advantage plan still pay their Medicare Part B premium, and they may pay a premium for the Medicare Advantage plan. Not all Medicare Advantage plans have a premium.
Who is eligible to join a Medicare Advantage plan?
To enroll in a Medicare Advantage plan, a person must:
- Be entitled to Medicare Part A and enrolled in Medicare Part B
- Live in the plan’s service area
- Not have end-stage renal disease (ESRD). However, there are certain instances where an individual who has or has had ESRD can still enroll.
How do Medicare and Medicare Advantage plans work together?
Medicare Advantage plans work with Medicare to provide coverage for healthcare benefits to beneficiaries. They must follow rules and standards set by Medicare. The federal government pays Medicare Advantage plans to provide all Medicare-covered benefits. If there is a difference between the amount a Medicare Advantage plan is paid by Medicare and the plan’s actual cost to provide benefits to beneficiaries, the plan must use any savings to provide additional benefits or reduce beneficiary cost-sharing. This is how some Medicare Advantage plans provide coverage for benefits such as routine vision and routine dental service, which are not covered by Medicare.
Medicare issues quality ratings for the plans administered by Medicare Advantage organizations. Medicare surveys Medicare Advantage plan beneficiaries to measure the overall quality of plans, including quality of care, beneficiaries’ ability to access care, plan responsiveness and beneficiary satisfaction. Individual Medicare Advantage plans are rated on a scale of one to five stars, with five stars being the highest score. Ratings are posted on Medicare’s website.
What is a Medicare Advantage prescription drug plan?
A Medicare Advantage prescription drug plan is a Medicare Advantage plan that offers Medicare Part D prescription drug coverage in addition to medical coverage.
What are the types of Medicare Advantage plans and Medicare Advantage prescription drug plans?
There are a variety of different Medicare Advantage and Medicare Advantage prescription drug plans, which are listed below:
Health Maintenance Organization
A health maintenance organization (HMO) covers care through a specific network of physicians, hospitals and healthcare facilities. Members in HMOs generally must use these specified healthcare providers. Each member in an HMO has a primary care physician who oversees the coordination of the member’s care.
Point of Service Plan
Some HMOs have a point of service (POS) option, which allows plan members to see providers who are not in the plan’s network. Out-of-network services will usually have a higher cost to the member. Some services may require prior approval.
Preferred Provider Organization
A preferred provider organization (PPO) is similar to an HMO because it offers a network of physicians, hospitals and healthcare facilities to plan members. Members of PPOs have the option to see providers who are out of network, although out-of-network services may have a higher cost to the member. Out-of-network services do not require prior approval.
HMO Special Needs Plan
An HMO special needs plan (HMO SNP) addresses the healthcare needs of individuals who meet any of the following criteria:
- Are living in a long-term care facility or skilled nursing facility
- Have severe or disabling chronic conditions
- Are dually eligible for both Medicare and Medicaid
Employer Group Waiver Plan
An employer group waiver plan (EGWP) is an employee (or retiree) benefit plan established or maintained by an employer, an employee organization (such as a union) or a church group that provides medical care to employees and their dependents directly.
A private-fee-for-service (PFFS) plan is administered by an independent insurance agency. A PFFS plan differs from the other plans listed above because it allows plan members to go to any healthcare provider or hospital anywhere in the United States that agrees to accept the terms of the PFFS payment agreement. Members do not need referrals from primary care physicians to see specialists. However, members must make sure a provider accepts the plan’s payment terms prior to receiving any treatment.
Can I enroll in a Medicare Advantage plan if I have ESRD?
ESRD is a chronic condition resulting from temporary or permanent damage to the kidneys. This damage results in loss of kidney function that can eventually lead to renal failure.
People with ESRD are eligible for Medicare. However, under federal law, a Medicare Advantage plan cannot accept anyone who has ESRD unless the individual:
- Can submit documentation that he or she is the recipient of a successful kidney transplant and no longer requires dialysis
- Began dialysis treatment for ESRD but recovered natural kidney function and no longer requires a regular course of dialysis to live
- Developed ESRD while a member of a health plan offered by a Medicare Advantage organization
- Developed ESRD after he or she signed the enrollment form but before the effective date of coverage
- Is currently a member of a commercial health plan offered by the Medicare Advantage organization and wants to switch to another Medicare Advantage plan
A person with ESRD who was a member of a health plan that is no longer offered in the area in which he or she lives can make one election to enroll in a new Medicare Advantage plan. A person who develops ESRD while enrolled in a Medicare Advantage plan may continue to be enrolled in that plan.
What makes Medicare Advantage plans different from Medicare?
Medicare Advantage plans usually offer coverage for more services, such as health club memberships, programs to help manage certain health conditions, and other supplemental benefits, such as routine vision care or preventive dental care.