Medicare managed-care plans are health care plan options that Medicare offers to its members; these plans offer extra benefits and lower co-payments than basic Medicare. These plans vary with regards to health care coverage, flexibility and costs. Therefore, it is important to understand the advantages and disadvantages of the different plan options available and pick the plan that best reflects your required medical needs and desired out of pocket costs.
Significance
All Medicare managed-care plans look to provide Medicare members with quality health care at a low, fixed cost. Although most plans offer a limited network of providers members are financially motivated to stay within, access to these medical professionals at a low cost sometimes encourages early and preventative medical treatment.
Types
There are four basic plan options for Medicare members: Health Maintenance Organization, Preferred Provider Organization, private fee-for-service plans and special needs plans. PPO plans usually offer more flexibility and provide more doctor, specialists, and hospital choices than HMOs, and therefore PPO plans are more costly to members. PPOs will pay a large percentage of a medical bill outside of the provided network while HMOs require members to stay within the network and will not pay for any medical expenses outside the network. A private fee-for-service plan does not have a certain network of providers, rather members can visit any provider who is eligible and agrees to accept payments from Medicare. A Medicare special needs plan provides medical and prescription drug coverage for Medicare members with chronic, severe or disabling medical conditions.
Advantages
The main advantages of Medicare managed-care plans is the low costs and additional benefits offered. The managed health care insurance company charges a monthly premium to become a member; Medicare pays most of this premium, if not all of it, for its members. The additional benefits can include vision and dental coverage as well as prescription drug coverage.
Disadvantages
The biggest drawback of the plans is the limited network of providers. Although a majority of health needs can be resolved within the network of doctors and hospitals provided, out of pocket costs can be very high if a member needs medical attention outside the geographical service area or with a specialist not in the network.
Requirements
All Medicare managed-care plans will accept any Medicare member as long as they meet the following requirements: permanent resident in the desired plan's service area, complete the extensive required paperwork agreeing to the terms of the plan, and the Medicare member cannot have been diagnosed with end stage renal disease, ESRD, before applying.
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