Between 75% and 80% of Medicare beneficiaries are
enrolled in the original Medicare plan: Part A for
hospital coverage and Part B for outpatient coverage
(we'll leave discussion of Medigap supplemental policies, which
aren't technically part of Medicare, for another
time).
Part C of Medicare encompasses the entire collection of
Medicare Advantage plans. These are the HMOs, PPOs,
and other specialty plans run by private insurance
companies that participants can choose instead of
traditional Medicare. Most Part C Advantage
participants enroll in an HMO, so that will be our
first target.
Why Would Someone Choose a Medicare HMO?
At first blush these plans appear less expensive,
although some HMOs do charge extra premiums. In
addition to their monthly Part B premium (starting at
$96.40 in 2008), participants in traditional Medicare
pay an annual Part B deductible ($135 in 2008) and a
20% co-payment for all outpatient care and equipment. They
must enroll in another plan and pay another
monthly premium for drug coverage (Part D).
Enrolling in an Advantage HMO usually eliminates the
need for a part D policy, although co-payments for
pharmacy items will still exist.
Advantage HMOs also advertise that membership
eliminates the need to purchase a Medicare supplement
to cover annual deductibles and co-payments. This,
however, can be misleading, as Advantage HMOs also
require out-of-pocket payments that can quickly add
up.
How Medicare Advantage HMOs Work
Medicare turns the insured person's monthly premium
and an additional financial incentive over to the
private HMO company. In return for this monthly
payment, the Advantage HMO is obligated to provide the
same basic coverage as original Medicare. Many plans
also offer extras such as routine checkups, optical benefits, and wellness programs.
The Advantage HMO
also assumes responsibility for managing the insured
person's medical care.
Except in an emergency, the insured may only use the
physicians and facilities that participate in the HMO
plan. Consultations with a medical specialist must be
authorized by the patient's primary care physician,
who acts as the "gatekeeper" and overseer of the
patient's care. Surgery and many diagnostic tests
require pre-authorization by the plan. The goal is to
conserve medical dollars by managing the utilization
of costly medical services. The insurance company
makes a profit only if the patient uses less in
medical and ancillary services than the premium the
insurance company receives every month.
The insured will continue to be responsible for fixed
co-payments for outpatient care and medications
(either a flat dollar amount or a percent of the
cost), and will pay hospital deductibles or
co-payments that vary by company, but which can be higher than original
Medicare requires.
Satisfied Advantage HMO
Members
Younger and healthier members of Medicare Advantage
HMOs generally express satisfaction with their
insurance. They particularly appreciate the generally
reasonable co-payments for occasional doctor visits and prescriptions.
Because they are younger and healthier, their need for
medical specialists and hospital care is low. Their
primary care physician is often the only doctor they
see on a regular basis. They frequently take advantage
of HMO "extras," such as health club memberships
designed to keep them healthy longer.
Less Satisfied Advantage HMO
Members
Dissatisfied HMO members are generally older and in
poorer health than their "happy" counterparts.
Many believe that, because they see multiple doctors,
they actually pay more in office visit co-payments
than they would pay for a private supplemental policy
(had they enrolled in the supplement when they first
enrolled in Medicare).
Some
feel that they have had difficulty obtaining referrals
to medical specialists from their primary care
physicians, who they feel are resistant to "referring
out." They often say that their preferred specialists
do not participate in their HMO, which reduces their
medical choices. Participating specialist physicians
may be further away than these patients would prefer
and attend only at hospitals they would not
voluntarily select.
Less satisfied older HMO members have also stated that
their out-of-pocket costs for a hospital stay were
both unexpected and difficult or impossible to afford.
Many believe they were sent home from the hospital or
rehabilitation facility much sooner than their
counterparts with traditional Medicare. While usually most of
their local hospitals do participate in their HMO plan,
some were surprised that they have only a few
participating rehabilitation facilities to select from, and these
facilities are often not geographically convenient.
"Snowbirds" living in different parts of the country
according to the season often complain that the plan
they selected in one part of the country does not
provide coverage in another.
How to Avoid Bring "Less Satisfied" With a
Medicare Advantage HMO
The key to choosing your health care plan is to ask
all the questions before making a decision, and
then choosing a plan which best fits all your medical
and financial needs. Knowing the answers to the
questions below will eliminate many surprises and
reduce your chances of being an "unsatisfied" member
later:
What is the monthly premium?
Does my primary doctor participate in this plan?
If not, who are the participating primary physicians
(PCPs), and are they taking new patients in this plan?
How long will I have to wait for an appointment with
my PCP?
What is the co-payment for an office visit? Will I
have to meet an annual deductible before coverage
begins?
Which hospitals, medical specialists, skilled nursing
facilities and home care agencies are in the plan's
network?
What is involved in getting a referral to a medical
specialist?
How does
the plan pay my PCP? If my PCP refers me to a
specialist or for costly tests, does he/she face a
financial penalty?
Are my prescription drugs on the plan's formulary (the
list of covered medications)? Are there any
restrictions to obtaining my current medications?
What is the co-payment for brand name drugs? For
generic drugs? Is the co-payment a fixed dollar
amount, or a percent of the total cost?
Is there
a prescription drug "donut hole" where I will have to
pay the full cost of my medications for a period of
time?
Is my pharmacy in the plan network?
What will my cost be for a hospital stay? If I am
hospitalized more than once in a year, what will my
costs be for subsequent hospitalizations?
How many
days of rehabilitation in a skilled nursing facility
are covered?
What will my cost be if I use an out-of-network
provider or facility?
Is there an out-of-pocket maximum beyond which
I will not pay additional out-of-pocket costs, or my
costs will be reduced? Is it an annual or a lifetime
amount?
What is the plan's service area?
What is my coverage if I travel outside the plan
service area and I need medical care? Are there any
special provisions for "snow birds" who travel
seasonally?
How do I leave the plan if I want to disenroll?
In Summary:
You may be happy with a
Medicare Advantage HMO if:
You live year-round in the same place;
Your doctors, hospitals and other preferred medical
facilities are in the plan;
You want an all-in-one plan with prescription coverage
included;
You don't object to the approval process for
referrals, hospital care and some procedures.
You may prefer
traditional Medicare if:
You might need to see doctors outside the boundaries
covered by the HMO;
You prefer to have as broad a selection as possible of
doctors, hospitals and other preferred medical
facilities;
You are satisfied with and can afford your choice of Parts A & B and your supplemental
insurance policies.
Related Article:
How to Disenroll From a Medicare Advantage Plan |
