Medical Benefits & Prescription Drug Coverage
Private insurance companies offer Medicare health plans, known as Medicare Advantage, that provide the standardized hospitalization and medical benefits on Medicare Part A and Part B. These plans are approved and regulated by Medicare. Some Medicare Advantage (MA) plans include additional benefits that are not part of Part A and Part B such as prescription drug coverage (MAPD). MA plans are required to deliver benefits at least as good as original Medicare Part A and Part B but the plan does not have to deliver these benefits in the same way. Some plans offer additional benefits to plan members beyond Part A and Part B. An example would be dental or vision benefits.
Medicare Advantage plans use one of the following options:
- HMO – Health Maintenance Organization: a network of health care providers and facilities where you choose a primary care physician to coordinate your care
- PPO – Preferred Provider Organization: also a network of health care providers and facilities but typically you do not need to select a primary care physician and you have more flexible options regarding out-of-network care
- PFFS – Private Fee For Service: most similar to Original Medicare, where you are not limited to a network but there are no guarantees that your doctor or hospital will accept the plan
Medicare Advantage plans typically cost less than Medicare Supplement plans but may cover different benefits. Recent legislative changes to healthcare in the U.S. may drive up Medicare Advantage monthly premiums so it is important to compare prices before enrolling. Some Medicare Advantage plans currently offer premiums as low as $0 per month. However, recent legislation changing the compensation rates, these $0 premium plans may disappear.
The Medicare Advantage program has become very popular. By 2009, there were an estimated 11 million enrollees. This number represents one out of four Medicare beneficiaries.
You must have both Medicare Part A and Part B to be eligible to enroll in Medicare Advantage plans. Eligible individuals may also need to wait to enroll during an approved enrollment period. After enrolling in Medicare Advantage, you are responsible for continuing payment of your Medicare Part B premium alongside the Medicare Advantage premium.