11.4 Part C, Medicare Advantage
Medicare Advantage (Part C) plans are offered by private insurance companies that contract with Medicare to provide Part A and Part B benefits, and often include prescription drug coverage. These plans may take the form of Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Private Fee-for-Service (PFFS) plans, and Special Needs Plans (SNPs).
To enroll in a Medicare Advantage plan, individuals must be enrolled in both Medicare Part A and Part B and must continue to pay the Part B premium. Enrollment in Part C serves as an alternative to Original Medicare.
Medicare pays the plan provider a monthly capitation fee to manage and deliver healthcare services for enrolled members. While specific features—such as provider networks, out-of-pocket costs, and additional benefits—may vary by plan, all Medicare Advantage plans are required to provide at least the basic Medicare-covered services. Many plans also include prescription drug coverage.
Managed Care Organizations (MCOs), such as Health Maintenance Organizations (HMOs) and some Preferred Provider Organizations (PPOs), that offer Medicare Advantage plans are responsible for coordinating healthcare services and controlling costs. These plans typically require members to select a Primary Care Physician (PCP) who oversees and manages their healthcare. Cost management is achieved through the use of network providers, referrals to specialists, and prior authorization for certain procedures.
In contrast, PPO plans that are not structured as managed care plans generally do not require a PCP or referrals. They offer greater flexibility by allowing members to receive care from out-of-network providers, although this usually results in higher out-of-pocket costs.
A Medicare Supplement (Medigap) policy is not needed when an individual is enrolled in a Medicare Advantage plan. If a new Medigap policy is purchased, the individual will be automatically disenrolled from their Medicare Advantage plan.
Quiz
1. Which of the following best describes Medicare Advantage (Part C)?
A. A government-run hospital-only plan
B. A private plan that replaces Original Medicare (Parts A and B)
C. A supplemental policy to fill Medicare gaps
D. A prescription-only coverage plan
Correct Answer: B
Rationale: Medicare Advantage plans are offered by private insurers and serve as an alternative to Original Medicare, providing Part A and Part B benefits, often with additional coverage.
2. What is required for an individual to enroll in a Medicare Advantage plan?
A. Enrollment in Part A only
B. Enrollment in Part B only
C. Enrollment in both Part A and Part B
D. No prior Medicare enrollment required
Correct Answer: C
Rationale: To enroll in Medicare Advantage, individuals must be enrolled in both Part A and Part B and must continue paying the Part B premium.
3. How are Medicare Advantage plan providers paid by Medicare?
A. Per individual service provided
B. Through annual lump sum payments
C. Through a monthly capitation fee
D. Only when claims exceed a certain amount
Correct Answer: C
Rationale: Medicare pays Medicare Advantage plans a monthly capitation fee to manage and provide healthcare services for enrolled members.
4. Which of the following is typically required in a managed care Medicare Advantage plan such as an HMO?
A. Freedom to use any provider without restrictions
B. No referrals needed for specialists
C. Selection of a Primary Care Physician (PCP)
D. No network requirements
Correct Answer: C
Rationale: Managed care plans like HMOs require members to select a Primary Care Physician (PCP) and often require referrals and network use to control costs and coordinate care.
5. What happens if a Medicare Advantage enrollee purchases a Medicare Supplement (Medigap) policy?
A. Both plans work together for extra coverage
B. The Medigap policy is automatically canceled
C. The individual is automatically disenrolled from Medicare Advantage
D. Medicare pays higher benefits
Correct Answer: C
Rationale: Medigap policies are not compatible with Medicare Advantage. Purchasing a Medigap policy results in automatic disenrollment from the Medicare Advantage plan.