Unlike Original Medicare Parts A and B, which come in a one-size-fits-all model provided by the government, Medicare Advantage, also known as Medicare Part C, is highly flexible. Each Medicare Advantage Plan is unique, based on the preferred specifications of the insurance provider. These plans can be PPOs, HMOs, PFFSs or even SNPs, providing plenty of variety for those who choose Medicare Advantage over standard Medicare.
Types of Medicare Advantage Plans
For those unsatisfied with the coverage options provided under Original Medicare, Medicare Advantage can be a great alternative. All Medicare Advantage plans must offer, at minimum, the same coverage as Original Medicare, but are permitted to offer additional options in excess of base coverage levels. Medicare Advantage plans come in several different structures, including both HMOs and PPOs.
The four available forms of Medicare Advantage plans are as follows:
- Health Maintenance Organization (HMO): HMOs are among the most common and popular choices for Medicare Advantage users. These plans rely on the presence of a coverage network. Services offered in-network are largely covered, but there may be no option for reimbursement for any out-of-network care. HMOs generally require a designated primary care physician, and any specialist services must be approved through a PCP for coverage to apply. Some HMO plans offer prescription drug coverage, but this is not a requirement.
- Preferred Provider Organization (PPO): PPOs are also a popular choice for seniors, in spite of higher premiums on average. This kind of plan is a bit more flexible than an HMO; PPOs also use a network model, but coverage tends to be broader with some coverage available for out-of-network services. Further, PPO plans do not usually require PCP approval to see a specialist. PPO plans can offer prescription drug coverage, but this is not a requirement under Medicare Advantage.
- Private Fee-For-Service (PFFS): PFFS plans aren’t as common as PPOs or HMOs, but they can still be a viable choice. Rather than working within a set network, PFFS plans set specific reimbursement limits for various services. Most providers who accept Medicare plans will accept PFFS plans; however, users are encouraged to review coverage before making an appointment, due to the absence of a traditional network in this type of plan. PFFS plans can include prescription drug coverage but are not required to do so.
- Special Needs Plan (SNP): Special Needs Plans, as the name implies, offer coverage for seniors with special health needs outside of what is typically included in standard Medicare Advantage plans. SNPs aren’t available to all seniors; they are only an option for seniors with a qualifying condition, such as end-stage renal disease. These plans are customized to Medicare’s selected qualifying conditions to provide maximum coverage for those with unique needs. How SNPs provide coverage and how coverage applies to treatments can vary greatly from one plan to the next. Unlike all other forms of Medicare Advantage plans, SNPs are required to offer prescription drug coverage.
There is no right answer regarding plan types for seniors considering Medicare Advantage. Whether seniors choose an HMO, PPO or PFFS plan will depend on everything from personal preference to budget. However, with all of the options available, most seniors will have plenty of opportunity to find the right fit.