Medicare Advantage is also referred to as Medicare Part C. Medicare Advantage Plans are private health plan options that operate under contract with Medicare and serve as an alternative to the Original Medicare Program (Part A and Part B). The federal government pays a predetermined amount of money every month to these private health plans for each Medicare beneficiary enrolled in their plan, regardless of whether or not every enrollee uses health-care services.

Medicare Advantage Plans combine "core" Medicare benefits (Part A and Part B) with certain supplemental benefits in one integrated health-care plan. To join such a plan, you must live within its service area and be enrolled in Medicare Part A and Part B.

While enrolled in a Medicare Advantage Plan, you are not covered by Original Medicare at the same time. Therefore, while enrolled, all of your health-care claims must be submitted to and paid by your Medicare Advantage Plan — not the federal government’s Original Medicare program.

By law, Medicare Advantage Plans must cover at least the same services and fees as Medicare Part A and Part B. The private companies that operate these plans, not the government, manage the Medicare Advantage Plans and determine fees charged and additional benefits provided.

Medicare Advantage Plans

Medicare Managed Care Programs are privately managed health-care plans such as Health Maintenance Organizations (HMOs) and local or regional Preferred Provider Organizations (PPOs). Generally, they require that you use only the plan’s preapproved physicians, hospitals and other providers within the specified geographic location for all your health-care needs.
Medicare Private Fee-For-Service Plans (PFFS) are also health plans offered by private companies. Unlike a managed care option, you can generally choose your physicians, hospitals and other care providers as long as they accept the PFFS plan's payment terms and agree to treat you. The Medicare Private Fee-For-Service Plan pays a share of your medical expense; you pay the remainder. But the company offering the plan, not Medicare, decides how much you pay. PFFS Plans are not the same as Original Medicare or Medigap.
Medicare Special Needs Plans provide health-care coverage for specific groups of individuals, such as:
- Those eligible for both Medicare and Medicaid.
- Those with certain chronic or disabling conditions (such as diabetes).
- Those living in certain institutions (such as nursing homes).

Overview Of Medicare Advantage

Advantages

Medicare Advantage Plans work like a PPO or HMO plan you may have had with an employer. If you were generally satisfied with those types of plans, Medicare Advantage may be for you.
From November 15th to March 31st of each year, you can change your Medicare Advantage Plan or plan provider, or return to Original Medicare.
Medicare Advantage Plan premiums are generally lower than a Medicare supplement. This premium savings could be applied to the small co-payments of your Medicare Advantage Plan.
Medicare Advantage coverage will vary among plans and companies, providing you with more plan options from which to choose. While it does mean you should shop for the best plan, it allows you to find a plan that is appropriate for your specific situation and budget.
Medicare Advantage Plans combine your hospital and medical coverages into one plan and usually offer benefits and coverages beyond Original Medicare.
Many Medicare Advantage Plans include prescription coverage. This precludes the need to purchase a separate Medicare Prescription Drug Plan.
Most Medicare Advantage Plans will charge you one premium that includes your “core” Medicare benefits, prescription drugs (if offered) and any extra benefits (if offered). Some plans do not charge any extra premium beyond your monthly Medicare Part B premium, because the amount of money these plans receive each month from the federal government is sufficient to cover the costs of plan benefits provided.
You do not need a Medigap policy to supplement a Medicare Advantage Plan; in fact, while you are enrolled in one of the Medicare Advantage Plans, it is against the law for anyone to sell you a Medigap policy (unless you are cancelling your Medicare Advantage Plan to go back to Original Medicare).
Medicare Private Fee-For-Service Plans allow you to choose any physician, hospital or care provider who takes the plan’s benefits.

Disadvantages

Companies offering Medicare Advantage may decide to drop their plans or change benefits at the beginning of each year. If this occurs, you would be eligible to select a plan from another company or return to Original Medicare coverage.
Some Medicare Advantage Plans limit coverage if you choose a physician or hospital that is not part of their network. Additionally, providers in their network may decide to drop out, requiring you to find a new physician.
If you travel frequently, a PPO or HMO plan may limit your coverage if you need care from a provider who is not in the network.
If you disenroll in Medicare Advantage and return to Original Medicare, your ability to obtain a Medicare Supplement could depend on your health. For example, in some situations, Medigap insurers can use medical underwriting to determine if you qualify for a Medigap policy. Returning to Original Medicare without a Medigap policy would mean you must cover the gaps in Original Medicare yourself.

Next: Prescription Drug Coverage

Updated Thursday, February 11, 2010

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