Types of Medicare Advantage Plans

In Medicare Advantage (Part C) there are different plan types. The main types are HMOPPO, and POS. Each plan type utilizes a different type of network.[1][2][3][4][5]

Aside from these main types, there are a few other types to discuss as well SNP, PFFS, and MSA. Below we discuss the aforementioned plan types and the other Medicare Advantage plan types you may run across while looking at policies.

Medicare Advantage Plan Type Summary

Health Maintenance Organization (HMO)

  • Uses a network.
  • Care is coordinated by a primary care doctor
  • May require referrals for specialists
  • Out-of-network costs may not be covered at all

Preferred Provider Organization (PPO)

  • Uses both network and out-of-network providers
  • Typically doesn’t require referrals for specialists
  • Out-of-network is generally covered, although it may cost more

Point of Service (POS / HMOPOS)

  • A hybrid of HMO and PPO
  • Typically doesn’t require referrals for specialists
  • Covers out-of-network care, although it may have a limit or cost more

Special Needs Plan (SNP)

  • For people with chronic conditions, who are dual-eligible for Medicaid and Medicare, or who live in a long-term care facility or need institutional care.
  • Can be an HMO, PPO, or POS
  • Must include drug coverage

Private Fee-For-Service (PFFS) Plan

  • Can often be used with any provider who accepts Medicare
  • Benefits and costs vary depending on the plan

Medical Savings Account (MSA) Plan

  • Like an HSA for Medicare, it is a high-deductible health plan with a health savings account where you can spend tax-free on healthcare
  • No premium
  • No drug coverage

Medicare Advantage Coordinated Care Plans in Detail

HMOs, PPOs, and POS plans are all types of “Coordinated-Care plans (CCPs).” Coordinated-Care plans (CCPs) have a network of healthcare providers that is pre-approved by the Centers for Medicare and Medicaid Services (CMS). CCPs are either Local CCP or Regional CCP, where Regional CCPs have a wider network.

In simple terms, PPOs let you seek care out-of-network, HMOs have strict networks and only let you seek care out-of-network in emergencies, and POS plans are a hybrid where using in-network care is cheaper.

HMO or Health Maintenance Organization plans require you to choose an in-network primary care doctor who coordinates your care with other healthcare providers in your network. With HMOs you must generally seek care in-network. If you seek care outside of the plan’s network, the plan will only cover emergency or urgent care in most cases.

PPO or Preferred Provider Organization plans are Medicare plans where you don’t need to choose a primary care doctor and can utilize healthcare providers inside or outside your network. With PPOs you’ll pay less for using an in-network provider, but out-of-network providers are also covered. There are two PPO types, Local PPO and Regional PPO. “Local” means the plan’s network covers a “small” service area or part of the country, while regional means it covers one or more whole regions and thus covers a larger area.

POS or Point of Sale plans (also called HMO-POS or HMOPOS) generally function like HMOs aside from the fact they are designed to let you see doctors outside of your network as well in some cases (generally at a higher rate).

Aside from the major types of CCPs that any Medicare beneficiary can get, there is also a type focused on beneficiaries with special needs:

Special Needs Plans (SNPs) a type of CCP that limit membership to people with specific diseases or characteristics that are designed specifically for the group of people they serve. For example, those who have both Medicare and Medicaid, live in a nursing home, or have certain chronic medical conditions.

Notes: Other types you might see are “DEMO,” which is a demonstration/pilot program offered to a limited population for a limited time to test improvements in Medicare coverage, payment, and quality of care, Medicare-Medicaid HMO which is an HMO for those who qualify for both Medicare and Medicaid, and National PACE which are plans designed for specific populations who qualify for Medicare and Medicaid. PACE plans are locally coordinated and focus on coordinating care within a community rather than a large network. TIP: PACE stands for Programs of All-Inclusive Care for the Elderly.

Other Types of Medicare Advantage Plans

Not every Medicare Advantage choice is a coordinated care plan, some plans offer more freedom in exchange for more responsibility in terms of cost. They are:

Private Fee-for-Service (PFFS) plans may or may not offer a specific network, these plans generally however work like Original Medicare where you go to any Medicare-approved doctor, provider, or hospital that agrees to the plan’s payment terms. The plan determines how much it will pay doctors, other health care providers, and hospitals, and how much you must pay when you get care.

Medical Savings Account (MSA) plans combine a high deductible health plan with a health savings account. Medicare deposits money into the account (usually less than the deductible), then you use the money to pay for your health care services during the year. These are the Medicare equivalent of an HSA eligible plan in the under 65 market.

Citations

  1. Doctors, providers & hospitals in Medicare Advantage Plans. Medicare.Gov.
  2. HMO, PPO, POS: What do all these acronyms mean? bcbsm.com.
  3. Private Fee-for-Service (PFFS) Plans. Medicare.gov.
  4. PACE. Medicare.Gov.
  5. Medicare Advantage Plan Types. Medicare.Gov.