When individuals age into Medicare, their healthcare costs are reduced dramatically because they qualify for Original Medicare which is fairly comprehensive health insurance.

Although Original Medicare Parts A, B, and D provide the coverage that most seniors need, they have gaps in coverage that are a result of deductibles, copays, and coinsurance.

In today’s economy, seniors can dramatically reduce their out-of-pocket medical expenses by enrolling in a Medicare Advantage plan which is also known as Medicare Part C.

For many seniors, Original Medicare can be a complicated program. You may be wondering if it’s better for you to depend on it or choose a Medicare Advantage Plan. Both have their advantages, but you’ll need to do a little research. Should seniors depend on Medicare or select a Medicare Advantage Plan?

What is a Medicare Advantage Plan?

Medicare Advantage Plans are another way to get your Medicare Part A and Part B coverage. You can reduce your medical costs by using a Medicare Advantage plan offered by private insurance companies. 

These private companies are approved by Medicare, and they must follow certain rules set by the government. Some plans will even cover prescription medication, vision, dental, hearing, and long-term care.

When you’re in need of health care, you’ll need to find providers who participate in the plan and offer service in your service area. 

Unlike Original Medicare, these plans help protect you from paying unexpected costs by setting out a limit for what you’ll have to pay each year when it comes to covered services.

If you have a Medicare Advantage Plan, you may be covered outside your plan. However, you will pay more for these services. Remember to use the card from your Medicare Advantage Plan when getting covered services. 

Important – keep your blue, red, and white Medicare card safe because you’ll need it if you decide to return to Original Medicare.

There are four primary types of Medicare Advantage Plans:

Health Maintenance Organization

If enrolled in an HMO Plan, you typically will need to get your healthcare services from providers who are members in the plan’s network, except for:

• Out-of-area dialysis treatment
• Out-of-area urgent care
• Emergency health care

With some Medicare Advantage plans, policyholders can get out-of-network healthcare services but it generally will cost more than if you were treated by a network provider. This option is commonly referred to as an HMP with a POS option.

You will, however, have to select a primary care physician (PCP) who will be in charge of managing all of your healthcare services. This means that in order to see a specialist, you will need a referral from your PCP.

Preferred Provider Organization (PPO)

If you are enrolled in a PPO, you will be encouraged to use members of the PPO network but you can also use any healthcare provider that accepts Medicare. 

You will generally pay more for out-of-network providers than in-network providers, but you will always have the choice of provider you wish to get services from.

Additionally, there is no primary care provider requirement in a PPO plan like there is with an HMO plan, which means a referral is not required to see a specialist.

Private Fee for Service (PFFS)

With a Private Fee for Service plan, the plan determines how much it will pay the doctors, other healthcare providers, and hospitals, and what your share of the expenses will be.

Depending on the terms of your plan you can get healthcare from any medical professional or facility that will accept your PFFS coverage and you’re not required to select a primary care doctor.

Important: An out-of-network physician does not have to see you each time you wish to receive services, so always confirm first.

However, in an emergency situation, hospitals and doctors must agree to treat you.

Special Needs Plan (SNPs)

A type of Medicare Advantage Plan, called a Medicare SNP, is a specific type of HMO or PPO. Medicare SNPs are tailored to the needs of groups with specific diseases or characteristics. This tailored healthcare is best for those with specific needs.

Typically, policyholders have to get their healthcare services from physicians or hospitals that are members of the SNP network except for emergency care treatment and out-of-area dialysis.

All SNP plans include prescription drug coverage and SNPs have a primary care provider requirement.

SNP plans are limited to the following groups:

• People who live in certain institutions (like a nursing home) or who require nursing care at home.

• People who are eligible for both Medicare and Medicaid.

• People who have specific chronic or disabling conditions (like diabetes, End-Stage Renal Disease (ESRD), HIV/AIDS, chronic heart failure, or dementia). 

Click here to learn more about SNP plans.

How to know which Medicare Advantage Plan is Right for You

Seeing this as one of the most important questions about Medicare Advantage, let’s consider the following:

1. What are your current healthcare needs? 
2. What type of coverage are you looking for (e.g., HMO or PPO)? 
3. How much do you want to pay in monthly premiums?
4. If you are taking medications, check to see the plans level of coverage for each one.

5. Is the plan’s limit on out-of-pocket expenses competitive with other plans?

The Good News about Medicare Advantage Plans

With so many senior healthcare options, the industry is competitive. However, the advantage to consumers is that prices have been driven down. 

To take advantage of the competitive marketplace, you should contact an independent insurance professional who represents multiple Medicare Advantage providers.

By comparing plans, you can find a plan that meets your needs and is within your budget.

And remember to ask about zero premium Medicare Advantage Plans and plans that provide a refund of a portion or all of your Medicare Part B monthly premium.