What is Medicare advantage?

Guide to Medicare, Medicaid, and Medicare Advantage.

Medicare

Medicare is a federal health insurance program that provides coverage for individuals who are 65 years old or older, as well as those with specific disabilities or conditions who are under 65. The administration of Medicare is carried out by the Centers for Medicare & Medicaid Services, a federal agency. Due to its federal nature, Medicare has established regulations pertaining to coverage and costs.

Typically, Medicare is intended for individuals who are 65 years or older. However, those who have a disability, End-Stage Renal Disease, or ALS may qualify for Medicare before the age of 65. Medicare consists of four parts: Part A, which covers hospital insurance, Part B, which covers Medicare insurance, Part C, which covers Medicare Advantage plans, and Part D, which covers drug coverage. Most individuals do not have to pay a premium for Part A coverage, but a premium for Part B coverage is required each month, regardless of whether or not Part B-covered services are utilized. The monthly premium amount may change yearly and may be higher based on income.

Medicaid

Medicaid, on the other hand, is a program that is jointly managed by the federal government and individual states. It aims to assist individuals with limited income and resources in covering their medical expenses. While the federal government establishes general guidelines for state Medicaid programs, each state operates its own program. Medicaid provides coverage for services that are not typically covered by Medicare, such as personal care services and nursing home care. Medicaid beneficiaries generally do not have to pay for medical expenses that are covered, but may be required to make a small co-payment for certain services or items.

Medicare Advantage and how it works

Medicare benefits can be obtained through Original Medicare or a Medicare Advantage Plan, such as an HMO or PPO. When using Original Medicare, the government covers the costs of Medicare benefits. Medicare Advantage Plans, also known as "Part C" or "MA Plans," are supplied by private companies authorized by Medicare, with Medicare compensating these companies for covering your Medicare benefits. By enrolling in a Medicare Advantage Plan, you will receive full coverage for both Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance), which is distinct from a Medicare Supplement Insurance (Medigap) policy. There are various types of Medicare Advantage Plans available.

The four main types of healthcare plans are Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Private Fee-for-Service (PFFS), and Special Needs Plans (SNPs). HMO plans limit access to healthcare providers and hospitals outside of the plan's network, except in urgent or emergency situations. PPO plans offer reduced costs for using providers within the network. PFFS plans allow patients to see any doctor or hospital that accepts the plan's payment terms, similar to Original Medicare. SNPs offer specialized care for specific groups of people, such as those with both Medicare and Medicaid, living in nursing homes, or with certain chronic medical conditions.HMO Point-of-Service (HMOPOS) plans refer to HMO plans that permit the possibility of receiving certain services outside of the network for a greater copayment or coinsurance.