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What Is Medicare Advantage? 

Thursday, July 13, 2017 9:08 AM

A Brief History of Medicare Part C

Medicare is a federal health insurance program that provides health insurance for individuals over the age of 65, individuals under 65 with certain disabilities, and those diagnosed with ESRD. It’s divided into four parts; Part A, Part B, Part C, and Part D.

When Medicare was created in 1965 (Original Medicare), it provided only two parts; Part A and Part B. In general, Part A is premium-free to eligible beneficiaries and helps pay for in-hospital care. Part B is optional and helps pay for regular medical care such as doctor's bills, X-rays, and lab tests. Individuals who choose to enroll in Part B must pay a premium, a deductible, and co-payments.

Original Medicare is a private fee-for-service (PFFS) plan, which means that beneficiaries can choose any doctor or specialist who accepts assignment. Original Medicare is administered directly by the federal government, although claims and payments flow through private health insurance companies that act as intermediaries.

In 1997, Medicare Part C (Medicare + Choice) became available to persons who are eligible for Part A and enrolled in Part B. Under Part C, private health insurance companies can contract with the federal government to offer Medicare benefits through their own plans. Insurance companies that do so are able to offer Medicare health coverage through managed care plans such as Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs), Medical Savings Account Plans (MSAs) or HMO Point-of-Service Plans.

In 2003, under the Medicare Prescription Drug, Improvement, and Modernization Act, Medicare Advantage became the new name for Medicare + Choice plans, and certain rules were changed to give Part C enrollees better benefits and lower costs. The law also created Part D, prescription drug coverage.

In 2010, health reform legislation made several changes to Medicare Advantage plans, including eliminating subsidies paid to plans, changing open enrollment periods, and strengthening protections for beneficiaries. Plans must now spend 85 percent of their revenue on patient care and must cap enrollees' out-of-pocket costs.

Enrolling in a Medicare Advantage Plan

In order to enroll in a Medicare Advantage plan, you must be entitled to Part A and enrolled in Part B, and you can only enroll in a plan that is available in your area. If you're new to Medicare, you can generally enroll when you first become eligible (three months before the month you turn 65 until three months after the month you turn 65). However, once you're enrolled in a Medicare Advantage plan, you can generally only make changes to your plan during Medicare's Annual Election Period from October 15 through December 7 of each year. During this time, you can make changes to your coverage for the following year. If you're enrolled in a Medicare Advantage plan, you also have an opportunity to return to Original Medicare (and enroll in a Prescription Drug Plan) between January 1 and February 14. You generally can't join a Medicare Advantage plan if you have End-Stage Renal Disease.

Why Choose a Medicare Advantage Plan?

Medicare Advantage Plans offered by private insurance companies provide all of the Part A and Part B benefits of Original Medicare, but many offer additional coverage. HMOs and PPOs can typically offer benefits at a lower cost by creating a specific network of providers, allowing the insurance company to manage costs and reduce your out-of-pocket expenses.

Because costs and benefits can vary, it's important to compare plans before choosing one.

Medicare Advantage Private Fee-For-Service Plans

These plans are generally the most flexible and most costly. They allow you to see any Medicare-approved health care provider who accepts the terms of your plan.

Medicare Advantage HMOs

You may save the most money on your health care costs by joining a Medicare Advantage HMO. However, your choice of healthcare providers is limited. You're generally covered only when you see doctors and specialists, or go to hospitals that are part of the plan's network of providers, within the plan's service area. When you choose a Medicare Advantage HMO, you'll need to choose a primary care physician who will oversee your care and refer you to specialists when necessary.

Medicare Advantage PPOs

With Medicare Advantage PPOs, you will generally only see healthcare providers within the plan's network, but, unlike HMOs, you can choose doctors and services outside the PPO network for a fee, and you do not need referrals to see a specialist.

Choosing the Right Medicare Advantage Plan

There's a lot to consider when deciding which Medicare option is right for you. Here are some questions to ask during the decision-making process:

  • How much is the premium?
  • Will you need to satisfy a deductible or pay copayments or coinsurance? Medicare Advantage plans have an annual cap on how much you pay for Part A and Part B services. This will differ among plans.
  • Does the plan cover the additional benefits or services you need (such as coverage for vision, hearing, dental, or health and wellness programs)? Does the plan offer prescription drug coverage (most Medicare Advantage plans do)?
  • Do the healthcare providers you normally see participate in the plan?

What If Your Medicare Advantage Plan Leaves the Medicare Program?

You still have Medicare coverage. You can return to Original Medicare or join another Medicare Advantage plan if one is available where you live. Your options will be listed in the notification letter you are sent when your plan leaves the Medicare program.

Consumer Protections Under Medicare Part C

Under Medicare Part C, consumers are offered several protections designed to enhance the quality of care they receive, including the right to information, the right to participate in treatment decisions, the right to get emergency services, and the right to file complaints. In addition, your state insurance laws may provide additional consumer protections.

What Are Your Appeal Rights?

You have the right to appeal any decision about your Medicare-covered services, whether you are enrolled in Original Medicare or a Medicare Advantage plan. You can file an appeal if your plan does not pay for or provide a service or item you think should be covered or provided. The appeal procedure may vary, depending on the type of Medicare plan you have. If you are enrolled in Original Medicare, you can find your appeal rights on the back of the Explanation of Medicare Benefits or Medicare Summary Notice you received. If you are enrolled in a Medicare Advantage plan, the plan must give you written notification of your appeal rights; this will generally be included in your Medicare enrollment materials.

Medicare beneficiaries also have the right to a fast-track appeals process. If you believe that your health plan is ending its services too soon, you can ask for a quick review of your case conducted by independent doctors. You may have additional rights if you are hospitalized, in a skilled nursing facility or if your home healthcare ends.

If you have any questions about consumer protections or appeal rights, call 1-800-MEDICARE or visit the Medicare website.

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Last Revised 11/15/2017