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 set 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 enroll in 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. Companies that operate these plans, not the government, manage the Medicare Advantage Plans and determine fees charged and additional benefits provided.

There are several kinds of plans within the Medicare Advantage Program.

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. 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.
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).
Special Needs Plans are not offered in all areas of the country. Only available since 2005, these plans are designed to provide Medicare health care and services to beneficiaries who can benefit most from special expertise of plan providers and focused-care management.

Overview Of Medicare Advantage

Advantages

Medicare Advantage Plans combine your hospital and medical coverages into one plan and usually offer benefits and coverages beyond Original Medicare.
Outpatient prescription drugs may also be covered — these private health plans are called Medicare Advantage Prescription Drug (MA-PD) Plans.
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) — however, some plans do not charge any extra premium beyond your monthly Medicare Part B premium.
You do not need a Medigap policy to supplement one of the Medicare Advantage Plans; in fact, it is against the law for anyone to sell you a Medigap policy while you are enrolled in one of the Medicare Advantage Plans.
Generally, you can enroll in one Medicare Advantage Plan at any time.
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 Plans may decide to drop their plans or change the benefits offered on an annual basis — requiring you to select another Medicare Advantage Plan (if available) or return to Original Medicare coverage.
Unlike Original Medicare (where benefits and costs are identical for all beneficiaries nationwide), with Medicare Advantage, the total benefit package and beneficiary costs vary from plan to plan and from one geographic location to another. Plans are not available in all locations, especially rural areas.
Your out-of-pocket expenses can vary because the company offering the plan, not Medicare, sets fees, co-payments, etc.
Some plans limit the number of participants so you may not be able to enroll in the plan of your choice.
Medicare Managed Care Programs (Health Maintenance Organizations, Preferred Provider Organizations, etc.) restrict your freedom to choose your physicians, hospitals and other care providers. Additionally, approved providers can decide to drop out of your plan’s network, causing you to switch to new physicians, etc.
Coverage for medical services delivered outside your geographic location may not be available or may be extremely restricted — so the plan does not easily “travel” with you.
If you decide to enroll in Original Medicare at a later date because you would like to expand your care choices, your options for obtaining supplemental insurance may be restricted. For example, Medigap insurers can use medical underwriting to determine if you qualify for a Medigap policy. Without supplemental insurance, you must cover the gaps in Original Medicare yourself.

Next: Prescription Drug Coverage

Updated Thursday, March 06, 2008

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