By Ron Lovell
Medicare Advantage (MA) is a type of health plan offered by private companies that contract with Medicare to provide Medicare Parts A and B benefits. These plans are also known as “Part C” or “MA Plans”. Medicare pays these private companies to provide healthcare services to enrollees. MA plans include health maintenance organizations, preferred provider organizations, private fee-for-service plans, and Special Needs Plans. For additional information go here.
Both Original Medicare (OM) and MA are administered by the federal agency, The Centers for Medicare & Medicaid Services (CMS). MA plans pay healthcare providers differently than OM. In OM, CMS reimburses healthcare providers with a fee for each service and consumers can choose any provider that accepts CMS’s reimbursement rates. In MA, CMS pays an annual fixed payment to a private-sector health insurer, who then pays for the healthcare expenses of plan enrollees according to the rules of the MA plan. Some attractions of MA plans include low monthly premiums and the potential for more benefits than provided under OM. However, there are some disadvantages to MA plans. These plans are annual contracts with CMS by private-sector insurers, and private-sector insurers may decide not to renew their annual contract with CMS, so the consumer must find alternative coverage.
Some other reasons why MA plans may not be the best option for consumers:
- High out-of-pocket costs: MA plans may offer lower premiums than OM, but many enrollees have been hit with unexpected costs in MA plans.
- Limited network of doctors: some MA plans may offer only a limited network of doctors, which can interfere with a patient’s choice. It may not be easy to change to another plan when you might need specialized care.
- Denial of necessary care: Every year, tens of thousands of people enrolled in MA plans are denied necessary care that should be covered under the program. Denial of in-network care ranged from 2% to 49% among different plans.
- Barriers to care: These include limited network providers and pre-approval for some basic care services.
- High costs for those who are sick: MA plans discourage people who are sick by the way they structure their copays and deductibles.
Choosing between MA and OM requires careful consideration of your finances and health needs. It’s important to note that not all consumers have negative experiences with MA plans. The issues outlined above are some potential pitfalls of which consumers should be aware when considering their options for healthcare insurance.