If you’re shopping for Medicare Advantage, it’s essential to understand the different types of Medicare Advantage Plans and how they work.
There are three types of Medicare Advantage programs: HMO’s, PPO’s, and Fee for service plans. Each program has its pros and cons and fits different life circumstances. Below we take a closer look at these Medicare Advantage programs to help you find your best policy.
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About Medicare Advantage Programs
Medicare Advantage, also known as Medicare Part C, are private insurance policies that expand your Original Medicare benefits to include vision, dental, and prescription drug coverage. These plans also fill the financial gaps looming within Medicare in the form of co-pays, coinsurance, and multiple deductibles.
With Medicare Advantage, additional benefits get bundled into one convenient plan to provide comprehensive medical protection. These plans work to protect both your health and your bank account.
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Types of Medicare Advantage Plans
There are three types of Medicare Advantage programs:
Medicare Advantage HMO plans (health maintenance organization) use a local network of doctors and service providers to facilitate all the benefits and covered services of your policy.
Here’s how it works: Upon enrollment, you choose an in-network primary care physician to be the main point of reference for all your care services. Your chosen primary care physician issues all referrals for testing, specialist care, and other needed health care services. Your primary care physician determines and directs all the care services that you need. This process reduces the overall health care cost of the network by reducing unnecessary office visits and needless services.
A Medicare Advantage HMO plan offers you lower premium rates in exchange for going through a primary care physician to schedule your medical care. HMOs are usually the lowest-cost Medicare Advantage program.
HMO plans are a good fit for people who anticipate general care and routine medical services in the upcoming year but are generally healthy individuals. However, individuals with severe chronic health conditions may want to consider a different Medicare Advantage program.
Medicare Advantage PPO plans (preferred provider organization) are more popular than HMO plans because they give you the freedom to schedule all of your care services without needing a doctor’s referral.
As with HMOs, a Medicare Advantage PPO plan uses a local network of care providers to administer the benefits covered in your policy. However, PPO plans offer the freedom to schedule and see any doctor outside your preferred network who takes Medicare patients. PPO plans incentivizes you to use an in-network ‘preferred provider’ by offering lower costs.
Overall, Medicare PPO’s typically have a higher annual deductible and higher monthly premiums. However, individuals suffering from poor health will find this type of Medicare Advantage Plan attractive due to the convenience of not needing a referral when receiving regular medical care.
Medicare Advantage FFS plans (Fee For Services) require you to pay a fee every time you need to access your policy benefits. Your policy sets the required fees for all Medicare-covered services.
This Medicare Advantage type is as popular as the other two mentioned above; however, the FFS program fits well with individuals in good health and do not foresee using their Medicare benefits much in the upcoming year.
You can find out more information about these three types of Medicare programs here.
Which Type of Medicare Advantage Plan is Right For You?
Determining the best Medicare Advantage program for you depends on your health status, state of residence, and budget. As mentioned above, each Medicare Advantage program caters to different groups of people.
The best approach is to work with one of our independent insurance agents to help you sort through your options and navigate to the best policy available in your area. We can also help you shop and compare Medicare Supplemental Insurance policies as an alternative way to covering the financial gaps within Medicare.