Medicare Advantage plans, such as Medicare PFFS, HMO, and PPO plans, are a way to receive your Original Medicare benefits through private insurance companies. They must provide at least the same level of coverage as Original Medicare but may also offer additional benefits like vision, dental care, or prescription drug coverage. It’s important to compare these plans’ costs and coverage to determine which is right for you.
How to Enroll in Medicare Advantage Plans?
When you become eligible for Medicare, you will receive an Initial Enrollment Period that starts three months before your 65th birthday and ends three months after. This period allows you to enroll in Medicare Parts A, B, and D, and also serves as your first opportunity for Medicare Advantage enrollment. You are free to choose any Medicare Advantage plan during this period.
Medicare Advantage enrollment is not open year-round, and enrollees must follow specific enrollment periods to sign up for a plan. These enrollment periods include the Initial Coverage Election Period, Annual Enrollment Period, Medicare Advantage Open Enrollment Period, and Special Enrollment Period, each with different rules and occurrences.
The Medicare Advantage Open Enrollment Period occurs annually from January 1 to March 31 and provides an opportunity for those who already have Medicare Advantage to make a one-time change to their current plan or switch back to Original Medicare. Individuals who miss their Initial Coverage Election Period can enroll during the Annual Enrollment Period, which takes place between October 15 and December 7. Special Enrollment Periods are also available for those who experience certain circumstances. After disenrolling from Medicare Advantage, individuals can choose to pair Original Medicare with a Medigap plan and a stand-alone Part D drug plan.
Private-Fee-For-Service Plans Coverage and Costs
When enrolled in a Medicare Advantage PFFS, the beneficiary must bear the burden of any cost-sharing obligations such as copays and coinsurance, which are to be settled during the service provision.
Medicare Private Fee-for-Service (PFFS) are insurance plans that are different from other Medicare Advantage plans as the insurance company, not Medicare, decides how much the provider is paid and how much the beneficiary pays for a covered health service. PFFS plans to contract with all Medicare-participating providers that accept the plan’s payment terms, but there is no guarantee that a doctor will accept the plan’s payment terms or provide treatment unless the doctor has an agreement with a PFFS network or emergency treatment is required. PFFS plans do not require a primary care physician or a referral to see a specialist, and they must cover any service considered medically necessary under Original Medicare. The beneficiary is required to pay both the Part B premium and an additional premium for their Medicare Advantage PFFS plan. Afterward, the healthcare provider invoiced the plan for the balance amount. Some PFFS plans allow providers to charge up to 15% over what the plan pays, and the beneficiary must pay the difference. Certain PFFS plans also provide prescription drug coverage. If a plan does not provide such coverage and the beneficiary needs it, they can enroll in a separate Medicare Part D prescription drug plan during the Annual Election Period from October 15 to December 7 every year, or switch to a different Medicare Advantage plan that includes prescription drug coverage.
Coverage and costs of HMO and PPO plans
Medicare Advantage HMO plans require you to choose doctors within the provider network and may cost more if you go outside the network. Referrals from your primary care doctor are needed to see a specialist. On the other hand, Medicare Advantage PPO plans allow you to use preferred providers within a network and pay more for non-preferred providers. There’s no need for a referral or primary care physician to see a specialist. HMO plans could be less expensive in comparison to PPO or PFFS plans.
If you choose to enroll in a Medicare Advantage plan, you will typically have to pay a premium in addition to your Part B premium.
For 2023, the Medicare Part B premium is $164.90$ per month for most people, although it may be higher for those with higher incomes. In addition to the Part B premium, those who enroll in a Medicare Advantage plan may also have to pay an additional premium for their plan.
These plans are different from PFFS plans in that providers agree to accept the Medicare-approved amount as full payment for services, and balance billing is generally not allowed. Most Medicare Advantage HMO and PPO plans also include prescription drug coverage, but if your plan doesn’t provide it, you will have to switch to a different plan during the Annual Enrollment Period if you want to enroll in a Medicare Prescription Drug Plan.
Pros and Cons of PFFS, HMO, and PPO
Medicare Advantage plan types, such as PFFS, HMO, and PPO, come with both advantages and disadvantages. PFFS plans offer some unique benefits, like the greater network of providers as members aren’t usually restricted by a network and can contract with any Medicare-approved provider. PFFS plans also allow for “advance coverage decisions” if unsure of whether a medical service or item is covered. However, finding a provider who accepts the plan may be difficult, and PFFS plans may have higher out-of-pocket costs than HMOs or PPOs due to balance billing. It is also worth noting that adding a Medicare Part D Prescription Drug Plan is possible with PFFS plans, unlike with HMOs or PPOs that do not include drug coverage.
Medicare Advantage HMO and PPO plans have certain drawbacks.
Depending on the plan, your options for doctors may be limited to those in the network or you may have to pay extra if you choose to see a doctor outside of the network. For example, an HMO plan has a more restricted network than a PPO plan. However, if you have an HMO or PPO plan which doesn’t have drug prescription coverage included, you won’t be able to purchase a separate drug plan. It is only possible with PFFS or MSA Medicare Advantage plans.
Medicare Advantage PPO plans offer more provider flexibility but may be more expensive, whereas HMO plans may be more cost-effective.
If you require a plan that offers a broader selection of physicians and medical facilities, it may be necessary to explore PPO plans. Conversely, if you prefer a limited network of providers, an HMO plan may be suitable. It’s worth noting that PPO plans typically come with higher expenses as they offer more benefits than HMO plans.
Thus, selecting the ideal Medicare Advantage plan for you is contingent on the options available in your region and your healthcare requirements. It’s important to make sure that any plan you consider covers your preferred doctor. Since Medicare Advantage plans vary greatly in terms of coverage and cost, it’s always a good idea to compare prices before making a decision.