Medicare Advantage Coverage

Medicare Managed Care Plans, also known as Medicare Advantage Plans or simply Medicare Part C, fill gaps in basic Medicare coverage, as do Medigap policies. But the two systems are quite different. Whereas Medigap works in conjunction with Medicare (medical bills are sent to both Medicare and the Medigap insurer, and each pays a portion of the approved charges), Medicare Advantage provides all of the insurance itself, including all basic Medicare coverage along with other services to fill the gaps in Medicare. And unlike the mandated coverage of Medigap, the federal government doesn't regulate Medicare Managed Care Plans except to direct that the plans offer at least standard Medicare benefits. The extent of coverage offered beyond basic Medicare – as well as the premiums and co-payments charged – is determined entirely by the managed care plan itself.

If you join a Medicare Advantage plan, you leave the Medicare program altogether. The insurance company that runs the managed care plan receives a monthly payment from Medicare on your behalf. The plan then directs all of your medical coverage. If coverage is denied for a particular service or treatment, it also rules on any appeals that you may decide to make. If you determine that a managed care plan isn't for you and decide to withdraw from it, you're always permitted to rejoin traditional Medicare.

The basic premise of managed care is that the plan member agrees to receive care only from specific doctors, hospitals, and others (in other words, a network of providers) in exchange for reduced overall healthcare costs. There are several varieties of Medicare Advantage plans. Some place rigid restrictions on consulting with specialists or seeing providers outside the network. Others provide their members with more freedom to choose whom they would consult for treatment. Generally speaking, however, more choice means higher cost.

The Health Maintenance Organization (HMO) is the least expensive and most restrictive Medicare Managed Care plan. Each HMO maintains a list of network doctors and health care providers. The HMO member must receive care only from a provider in the network, except in emergencies. If a provider from outside the network is used, the plan pays nothing toward the bill. And because the plan member has technically withdrawn from traditional Medicare by joining the Advantage plan, Medicare will pay none of the bill, either. The member becomes financially responsible for entire cost. However, federal law does require that all plans cover emergency services nationwide, regardless of the restrictions that are placed on the use of providers for routine care. The law also stipulates that plans pay for covered services that members receive from non-plan providers if the treatment was urgently needed while the member was temporarily outside of the plan's geographic coverage area.

The HMO member must select a primary care physician (PCP) from the plan's network. This is the doctor who directs and coordinates all of the member's medical care. The member cannot see other doctors or providers – even from within the same plan network – or obtain other medical services without a referral from his or her primary care physician. The intent is to encourage the primary care physician to handle medical problems that don't absolutely require a specialist. It also discourages the plan member from seeking specialist care. This restriction is a significant reason that managed care is less expensive for insurance companies than traditional fee-for-service policies. However, since lots of seniors require specialist care, it's also a reason that many of them decline HMO coverage in favor of Medigap insurance or less restrictive types of managed care.

Some HMO plans offer what's known as a point-of-service (POS) option. This feature allows a member to see physicians and other providers who are not in the HMO's network, and to receive services from specialists without first going through the primary care physician. If the member uses this option, the plan pays a smaller portion of the bill than if the member had followed the normal HMO procedure. The member also pays a higher premium for this option, along with a higher co-payment each time the option is exercised.

The Preferred Provider Organization (PPO) works in the same manner as the HMO with point-of-service option. If a member receives services from a caregiver in the PPO's network, the cost to the member is lower than if he or she had seen a non-network provider. Although they tend to be more expensive than standard HMOs, many people find that the extra flexibility afforded by PPOs in choosing doctors is an important factor to them, and therefore worth the extra cost.

The Provider-Sponsored Organization (PSO) is a group of medical providers (usually made up of doctors, clinics, and a hospital) that circumvent the insurance company middleman and contract directly with patients. As with an HMO, the member pays a premium, along with a co-payment each time a service is used.

Within the first six months of enrolling in Medicare, you have an unqualified right to join any Medicare Managed Care plan that operates in the county of your primary residence. In other words, the plan must accept you without any medical screening and on the same terms and conditions as anyone else of your age, regardless of your medical history or physical condition. Additionally, every Medicare Advantage plan must provide at least one month annually of 'open enrollment', which means that during that time anyone who's eligible for Medicare can join the plan regardless of his or her medical history or condition. Many plans designate November as their open-enrollment month, with coverage beginning the following January 1st. Some plans have more than one open-enrollment month per year; others even offer continuous open enrollment.

Like all managed care systems, Medicare Advantage plans can be an economical way to administer health care. But they can also be quite restrictive with regard to the patient's choices concerning his or her own health care services. If you're considering a Medicare Managed Care plan, you must decide whether any of the offerings available in your area offer coverage that's adequate for you at an affordable cost. For more detailed information about Medicare Advantage healthcare plans, please visit Medicare's website.