Types of Medicare Advantage Plans
When you’re looking for the right Medicare Advantage Plan, it’s important to ensure that you make the right choice for you. Different policies cover different things, and come with different costs. The type of medical treatment you receive can also be wildly different from plan to plan.
When choosing a Medicare Advantage Plan, it’s important to know what your options are. Medicare Advantage Plans come in 4 types. Here we will break them down, so they’re easier to understand and you can make a more confident choice.
The 4 Types Of Medicare Advantage Plans
Health Maintenance Organization (HMO)
A Health Maintenance Organization, or HMO, is a network of healthcare providers and facilities (such as doctor’s offices and hospitals) that contract with your insurance company to provide you with discounted rates for your care. Because the insurance company covers the remaining cost of this care, they require their policyholders to only use the services of doctors and offices that are “in-network”, or part of that contract (with the exception of certain emergency services). Because of this limitation, HMOs tend to be slightly cheaper insurance policies to buy.
Preferred Provider Organization (PPO)
A Preferred Provider Organization, or PPO, is similar to an HMO in that they, too, have a network of providers and facilities that insurance companies are willing to assist in the cost of care for. However, unlike HMOs, you are not necessarily required to use someone who is “in-network”, even though it’s cheaper to do so. Most PPOs also cover most prescription drugs.
Private Fee-For-Service (PFFS)
Private Fee-For-Service, or PFFS, are health insurance policies that are designed specifically for Medicare. This plan allows you to see any doctor who accepts Medicare and is willing to take this type of payment plan. These health professionals are under agreement to always treat a patient under this plan, regardless of whether they have seen them before or not.
Medical Savings Account (MSA)
A Medical Savings Account, or MSA, are less common than the above mentioned types of healthcare plans. This means that there may not be one available locally for you. But as the name suggests, with an MSA your insurance company actually puts money into a savings account for you, to be spent when you need it. This money isn’t taxed, as long as you actually spend that money on health related expenses. The drawback to this plan is that it comes with a high deductible, however you can use the money you spend towards covering that deductible (as long as it’s a service covered by Medicare). It’s important to know that this type of plan doesn’t cover prescription drugs.
What Plan Is Right For You?
MSAs can be a good option for retirees who are generally in good health, and won’t be needing to use their insurance very often. If an MSA isn’t available in your area but you still want to save on monthly premiums, an HMO might be a good option for you. Just make sure that the network you are in provides you a lot of options in your area. While PPOs and PFFSs are more costly on a monthly basis, if you have chronic or significant health problems they are likely to be a wise investment, as they cover more care.