Type of Plan
Health Maintenance Organization (HMO) plans
A Health Maintenance Organization (HMO) plan is a type of Medicare Advantage Plan that usually provides health care coverage from doctors, specialists, or hospitals in the plan’s network, except in an emergency or urgent care situation. A network is a group of doctors, hospitals, and medical facilities that contract with a plan to provide services. Most HMOs also require you to get a referral from your primary care doctor for specialist care, so that your care is coordinated.
Can I get my health care from any doctor, other health care provider, or hospital?
In HMO Plans, you generally must get your care and services from doctors or hospitals in the plan’s network, (except for emergency care, out-of-area urgent care, or out-of-area dialysis). You’ll pay less if you see doctors and use medical facilities that are in your plan’s network. If you get health care outside the plan’s network, you may have to pay the full cost. It’s important that you follow the plan’s rules, like getting prior approval for a certain service when needed. In most cases, you need to choose a primary care doctor. Certain services, like yearly screening mammograms, don’t require a referral. If your doctor or other health care provider leaves the plan’s network, your plan will notify you. You may choose another doctor in the plan’s network.
HMO Point-of-Service (HMOPOS) plans are HMO plans that may allow you to get some services out-of-network for a higher copayment or coinsurance. It’s important that you follow the plan’s rules, like getting prior approval for a certain service when needed. The POS portion of the plan has a separate deductible. The care you get in-network through the HMO has a different deductible than the care you get out-of-network through the POS. You must reach the two deductibles separately.
Are prescription drugs covered?
In most cases, prescription drugs are covered in Medicare HMO plans. If you want drug coverage, you must join an HMO plan that includes prescription drug coverage. If you join an HMO that doesn’t include prescription drug coverage, you can’t get a separate Medicare Prescription Drug Plan (Part D).
Preferred Provider Organization (PPO) plans
A Preferred Provider Organization (PPO) plan is a Medicare Advantage Plan that has a network of primary care doctors, specialists, and hospitals that you may go to. You also can choose to go to any doctor, specialist, or hospital not on the plan’s (out-of-network) list, but it will usually cost more. Because certain providers are “preferred” (as the name suggests), you can save money by using them.
Can I get my health care from any doctor, other health care provider, or hospital?
In most cases, you can get your health care from any doctor, other health care provider, or hospital in PPO Plans. PPO Plans have network doctors, other health care providers, and hospitals. Each plan gives you the choice to go to doctors, specialists, or hospitals that aren’t on the plan’s list, but it will usually cost less if you get your care from a network provider. You can get care from specialists without a referral or prior authorization from another doctor. If you use plan specialists, your costs for covered services will usually be lower than if you use non-plan specialists.
Are prescription drugs covered?
In most cases, prescription drugs are covered in PPO plans. If you want Medicare drug coverage, you must join a PPO plan that includes prescription drug coverage. If you join a PPO plan that doesn’t include prescription drug coverage, you can’t join a separate Medicare Prescription Drug Plan (Part D).
Private Fee-for-Service (PFFS) plans
A Private Fee-for-Service (PFFS) plan is another kind of Medicare Advantage Plan offered by a private health insurance company. A PFFS plan isn’t the same as Original Medicare or a Medicare Supplement (Medigap).
Can I get my health care from any doctor, other health care provider, or hospital?
You can go to any Medicare-approved provider like a doctor, other health care provider, or hospital as long as it accepts the plan’s payment terms and agrees to treat you. If you join a PFFS Plan that has a network, you can also see any of the network providers who have agreed to always treat plan members. You can also choose an out-of-network doctor, hospital, or another provider, who accepts the plan’s terms, but you may pay more. Before you get any services, ask your doctor or hospital if they can contact the plan for payment information and accept the plan’s payment terms. If you need emergency care, it’s covered whether the provider accepts the plan’s payment terms or not.
If your provider agrees to the plan’s terms and conditions of payment
The provider must follow the plan’s terms and conditions for payment, and bill the plan for the services they provide for you. However, the provider can decide at every visit whether to accept the plan and agree to treat you.
If your provider doesn’t agree to the plan’s terms and conditions of payment
The provider shouldn’t provide services to you except in emergencies, and you’ll need to find another provider that will accept the PFFS plan. If the provider chooses to treat you, then they can’t bill you. They must bill the plan for your covered health care services. You’re only required to pay the copayment or coinsurance the plan allows for the types of services you get at the time of the service. You may have to pay an additional amount (up to 15% more) if the plan allows providers to “balance bill” (when a provider bills you for the difference between the provider’s charge and the allowed amount). Are prescription drugs covered? Prescription drugs may be covered in a PFFS plan. If you want Medicare prescription drug coverage, and it’s offered by the plan, you must get your Medicare prescription drug coverage from that plan. If the PFFS plan doesn’t offer drug coverage, you can join a separate Medicare Prescription Drug Plan (Part D) to get coverage.
Special Needs Plans (SNP)
A Special Needs Plan (SNP) provides benefits and services to people with specific diseases, certain health care needs, or limited incomes. SNPs tailor their benefits, provider choices, and drug formularies to best meet the specific needs of the groups they serve.
SNPs cover the same Medicare services that all Medicare Advantage Plans cover. Medicare SNPs might also cover extra services tailored to the special groups they serve. For example, if you have a severe or chronic condition, like cancer or chronic heart failure and you require a hospital stay, an SNP may cover extra days in the hospital.
You may qualify for an SNP if you live in the plan’s service area and meet one of these requirements:
- Chronic alcohol and other dependence
- Autoimmune disorders
- Cancer (excluding pre-cancer conditions)
- Cardiovascular disorders
- Chronic heart failure
- Dementia
- Diabetes mellitus
- End-stage liver disease
- End-Stage Renal Disease (ESRD) requiring dialysis (any mode of dialysis)
- Severe hematologic disorders
- HIV/AIDS
- Chronic lung disorders
- Chronic and disabling mental health conditions
- Neurologic disorders
- Stroke
- You live in an institution (like a nursing home) or need nursing care at home (also called an Institutional SNP or I-SNP).
- You have both Medicare and Medicaid (also called a Dual Eligible SNP or D-SNP)
Each SNP limits its membership to people in one of these groups, or a subset of one of these groups. You can only stay enrolled in an SNP if you continue to meet the special conditions that the plan serves.
Can I get my health care from any doctor, other health care provider, or hospital?
You generally must get your care and services from doctors, other health care providers, or hospitals in the plan’s network (except for emergency care, out-of-area urgent care, or out-of-area dialysis).
In most cases, SNPs may require you to have a primary care doctor, or the plan may require you to have a care coordinator to help with your health care. A care coordinator is someone who helps make sure people get the right care and information. For example, an SNP for people with diabetes might use a care coordinator to help members monitor their blood sugar and follow their diet.
SNPs typically have specialists in the diseases or conditions that affect their members. Generally, you must get your care and services from doctors or hospitals in the plan’s network, except:
When you need emergency or urgent care, like the care you get for a sudden illness or injury that needs medical care right away • If you have End-Stage Renal Disease (ESRD) and need out-of-area dialysis
Are prescription drugs covered?
All SNPs must provide Medicare prescription drug coverage (Part D).
Medical Savings Account plans
Medical Savings Account (MSA) plans combine a high-deductible insurance plan with a medical savings account that you can use to pay for your health care costs.
- High-deductible health plan: The first part of an MSA plan is a special type of high-deductible Medicare Advantage Plan. The plan will only begin to cover your costs once you meet a high yearly deductible, which varies by plan.
- Medical Savings Account (MSA): The second part of an MSA plan is a special type of savings account. The MSA plan deposits money into your account. You can choose to use money from this savings account to pay your health care costs before you meet the deductible.
In addition to the Medicare Part A and Part B services that all MSA plans must cover, some MSA plans may cover extra benefits for an extra cost, like:
- Dental
- Vision
- Long-term care not covered by Medicare
Can I get my health care from any doctor, other health care provider, or hospital?
With an MSA plan, you can choose your health care services and providers.
Are prescription drugs covered?
If you join an MSA plan, you’ll need to join a Medicare Prescription Drug Plan (Part D) to get drug coverage.
However, if you join an MSA plan and already have a Medigap policy with drug coverage (some policies sold before January 1, 2006, had drug coverage), you can continue to use this coverage to pay for some of your drugs.
Once you decide which MSA plan you want, you’ll need to contact the plan for enrollment information and to join. Once you’re enrolled, the plan will tell you how to set up your account with a bank that the plan selects. You must set up this account before the plan can process your enrollment. After you get a letter from the plan telling you when your coverage begins:
- Medicare gives the plan an amount of money each year for your health care.
- The plan deposits money into your account on your behalf. You can’t deposit your own money.
- You can use the money in your account to pay your health care costs, including health care costs that aren’t covered by Medicare. When you use account money for Medicare-covered Part A and Part B services, it counts towards your plan’s deductible.
- If you use all of the money in your account and you have additional health care costs, you’ll have to pay for your Medicare-covered services out-of-pocket until you reach your plan’s deductible.
- During the time you’re paying out-of-pocket for services before the deductible is met, doctors and other providers can’t charge you more than the Medicare-approved amount.
- After you reach your deductible, your plan will cover your Medicare-covered services.
- Money left in your account at the end of the year stays in the account and may be used for health care costs in future years. If you stay with the same MSA plan the following year, the new deposit will be added to any leftover amount.
MSA plans and your taxes
If you use funds from your account, you must include IRS Form 8853 with information on how you used your account money when you file taxes.
Each year, you should get a 1099-SA form from your bank that includes all of the withdrawals from your account. You’ll need to show that you’ve had Qualified Medical Expenses in at least this amount, or you may have to pay taxes and additional penalties.
For a list of services and products that count as Qualified Medical Expenses and for other tax information, visit irs.gov/forms-pubs/about-publication-969 to get a free copy of the IRS publication #969 for the year that you’re filing to get more information about tax form 8853.
Contact your personal financial advisor (if you have one) for counselling and advice on how choosing an MSA plan could affect your financial situation.