Part C-Medicare Advantage Plans

Overview of Medicare Advantage (MA) Plans

A Medicare Advantage plan (also referred to as Part C) is a Medicare health plan offered by a private insurance company who contracts with Medicare to provide Medicare Part A and Part B medical benefits. As a result, you must be enrolled in Part A and Part B before you can enroll in one of these plans. Furthermore, you can't be denied coverage due to your health status.

Attributes of a Medicare Advantage Plan

A Medicare Advantage plan has some of the following attributes.

• May have a deductible
• Additional days for hospitalization compared to standard Part A benefits
• Skilled nursing and rehabilitative services without requiring a prior 3-day inpatient hospital stay like Part A
• Requires use of network providers and facilities like employer group coverage
• May include a national provider network for in-network coverage while traveling in the U.S.
• Has an annual maximum out of pocket (MOOP) that limits cost sharing for medical expenses
• Limited medical coverage for emergency and urgent care when traveling outside the U.S.
• May include additional benefits such as dental, vision, hearing, fitness and OTC products

Copays vs. Coinsurance in Medicare Advantage Plans

In general, many of the Part A and Part B services covered in network under a Medicare Advantage plan only require a copay, which is a set dollar amount paid at the time of service without regard to the actual cost of the service. However, the cost share for some Part A and Part B services may use coinsurance instead. Those services include the following.

• Therapeutic Radiology
• Air Ambulance
• Drugs Under Part B (such as infusion drugs)
• Chemotherapy Drugs (such as for cancer)
• Durable Medical Equipment
• Diabetic Supplies
• Prosthetics
• Kidney Dialysis

We make sure each client understands the impact to their out of pocket payments if they have any expenses that fall within these categories. All out of pocket payments for such eligible expenses will be accumulated toward the annual MOOP.

Prescription Drug Coverage for Medicare Advantage Enrollees

An insurance company offering a Medicare Advantage plan must offer in every service area at least one MA plan with prescription drug coverage (known as an MA-PD plan). While the Part D prescription drug coverage is included with the MA plan, the coverage is essentially a separate plan. Any costs incurred for Part D drugs is not included in the MA calculation of MOOP.

Types of Medicare Advantage Plans

Health Maintenance Organization (HMO)

In an HMO plan, you can only use in network health care providers, doctors, facilities and hospitals except in an emergency. There is no out-of-network coverage. In many instances, you only have coverage for emergency and urgent care when traveling in the U.S. outside your local service area.

You may also be required to get a referral from your primary care physician (PCP) to see other doctors or specialists. It may or may not include a prescription drug plan.

Preferred Provider Organization (PPO)

A PPO plan offers greater flexibility than an HMO. The plan allows you to see a health care provider that is in network or out of network. (Out-of-network providers must accept Medicare assignment.) However, you pay less if you use in-network providers. Referrals from your PCP are usually not required. It may or may not include a prescription drug plan.

Private Fee-for-Service (PFFS)

An individual enrolled in a PFFS plan may receive covered services from any provider in the U.S. who is eligible to provide Medicare services and agrees to accept the plan’s terms and conditions of payment. They are not limited to a network of plan providers. However, some plans may have a provider network. In those circumstances, an individual would pay more if they go to a provider that is out of network. It may or may not include a prescription drug plan.

Medical Savings Account (MSA)

An MSA plan is a high deductible health plan which is combined with a savings account used to pay for health care expenses not covered under the health plan. Medicare contributes to the savings account only. The member isn't allowed to contribute. The member pays for health care expenses from the savings account and then out-of-pocket until the annual deductible is met, after which the plan pays 100% for covered services for the remainder of the year. The member must enroll in a separate, standalone drug plan.

For additional information, you can download a copy of the Medicare and You Handbook. It is updated annually and available in a number of different formats and languages. 

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