Key Medicare Advantage Terms to Understand

By Melissa A. Brown
eMedicareSupplements Contributor

Medicare Advantage plans are essentially Medicare health care policies, similar to an HMO or a PPO. They are available through private insurance companies with the approval of Medicare.

Medicare Advantage plans are sometimes referred to as Medicare Part C. All services included in Medicare parts A and B are covered. Additional benefits are often offered as well, sometimes including prescription drug coverage, or Medicare Part D.

Enrollees in a Medicare Advantage plan will receive all services offered by Medicare through a single plan administered by a private insurance company. Medicare itself does not manage plan details with Medicare Advantage subscribers.

To better understand Medicare Advantage, it can help to become familiar with a few key terms:

• Medicare Health Maintenance Organization (HMO) – All care offered through Medicare Parts A and B is covered by this HMO. While the costs are generally lower, HMOs will usually require that you see physicians and visit hospitals that are included in their network, except in case of emergency.
• Preferred Provider Organizations (PPO) – A PPO requires that you use providers and hospitals within the PPO’s network. An added cost is assessed for medical treatment sought from providers not in the network.
• Fee-For-Service Plans – Under these private plans, you are free to seek treatment from any provider that accepts this plan’s payment. Once the claim is submitted, the plan decides what it will pay and you are billed for the rest.
• Medicare Medical Savings Account (MSA) Plans – There is no monthly predmium for a Medicare Advantage Plan because it is a high-deductible plan. You must pay the Medicare Part B premium, however. Once the deductible is met, all Medicare covered services are paid for by the plan. This does not include Part D prescriptions.
• Medicare Special Needs Plans – This plan is for people with specific conditions or disease. Benefits and providers are carefully chosen and their list of covered drugs is catered toward meeting the needs of its members. These conditions may include diabets, HIV/AIDS, and congetsive heart failure. Part D prescription drug coverage is always included.