Selecting a Medicare Advantage Plan

Choosing a Medicare Advantage Plan can be tricky and very confusing, whether it is for you or for a parent. There are many choices, including HMO, PPO and Private Fee For Service (PFFS) plans.

The main difference between HMO/PPO plans and PFFS plans is that HMO and PPO are contracted plans. Doctors and hospitals agree to participate in these plans for a set rate, and enrollees in these plans know which providers are available to them if they choose these plans. With PFFS there is no contracting, and while the rule says that an enrollee can see any doctor or go to any hospital, that only includes any provider that agrees to accept the plan.

Why would a provider decide not to accept a PFFS plan, you ask? The plan tells you they pay the same as Medicare and there are no authorizations or referrals required, so why not? The reasons are many, but the most important one is that the provider does not have a relationship with this company, contractual or otherwise.

How do they know they will be paid? The company could go bankrupt, or simply stop paying claims. Unfortunately there have been plans that have gone out of business and it is always the provider who ends up unpaid after already rendering care.

So do you stay with traditional Medicare and buy a supplement, or try to save money and get some extra benefits with a Medicare Advantage Plan? The answer is that it depends on you and your spouse. Do you have a lot of health problems? Do you want to see any doctor you want without any restrictions, not worry about getting something authorized, don’t want endless copays and coinsurance? Then you may want to spend the extra money and stay with traditional Medicare and buy yourself a Medigap plan.

If you’re generally healthy, don’t mind going through the steps needed when an authorization is required and like getting extras such as memberships in a health club, you might want to choose an HMO or PPO. Just make sure your physicians accept any plan you’re considering and that the copays, deductibles and coinsurance amounts are within your budget.

Private Fee For Service plans are the third choice. If you choose one of these plans, or if your former employer enrolls you in one of these plans, you may have to do a lot of homework and doctor shopping to find physicians who accept your plan. Make sure the physician knows it’s a PFFS plan and doesn’t require contracting, and don’t be afraid to get the plan involved to educate the physician – that’s their job.

Whatever you choice you make, don’t make it lightly, explore all of your options before enrolling in any Medicare Advantage Plan. Don’t just look at the brochures from one plan at a restaurant during a free lunch. Take some time before making your decision – it’s an important one.

--Susan Moore
Managed Care Analyst