What is Medicare Advantage?
Medicare Part C, otherwise known as Medicare Advantage, is an all-in-one alternative to Original Medicare (Part A and Part B). It combines all of the benefits of Parts A and B, works to lower out-of-pocket costs, and provides additional benefits including dental, vision, and hearing care.
To lower your out-of-pocket costs, Advantage plans arrange your care according to a specific strategy. There are 4 distinct plans, each with a different networking method to provide low-cost care. By working within an established network and negotiating costs with healthcare providers, your costs are significantly lowered. These include Special Needs Plans (SNPs), Preferred Provider Organization (PPO) plans, Private Fee-for-Service (PFFS) plans, and the type we will discuss in-depth today, Health Maintenance Organization (HMO) plans.
HMO Plans: The Basics
Health Maintenance Organization (HMO) Plans cover costs on an as-needed basis. Chances are, if you have been in the workforce and received insurance benefits, you may have already had an HMO plan through your employer. Unlike Original Medicare, all Advantage plans (including HMO) are offered by private organizations, meaning that certain cost and coverage options may vary based on your location and provider.
HMO Plans work through a select network of doctors and hospitals to provide care. To receive care without additional fees or penalties under this plan, then, you must see healthcare providers in your plan’s network.
A notable feature of the HMO plan is its required primary care physician. This helps to lower costs and coordinate care, but it also means that you will more than likely need a referral for any specialized care.
Depending on the provider, you may also receive drug coverage and dental, vision, and hearing benefits under an HMO. Be aware, however, of any plans that promote these types of benefits—they may over-exaggerate, so be sure to carefully review each plan before you sign up. For example, any dental benefits will likely be very minimal, and if a plan offers incredible dental coverage, you may want to proceed with caution. If you need help understanding HMO plans and their benefits, contact Medicare on Video.
The Cost of an HMO Plan
Compared to other Advantage plans, HMO plans are relatively low-cost. They have the lowest premium between Provider Organization (PPO) plans and Private Fee-for-Service (PFFS) plans. The low monthly premium is due to its pay-as-necessary system. In other words, you will pay more out-of-pocket for services when you need them and less per month in comparison. The out-of-pocket maximum is, however, $7550 for 2021, so you will never pay more than that for care per year.
Your out-of-pocket costs will also vary depending on your in-network versus out-of-network care—in-network care is going to be far less expensive than it would be out-of-network.
HMO Plan Comparison
Compared to Original Medicare with a Supplement plan, your maximum out-of-pocket cost with an HMO plan is much higher. You will also, however, pay far less on your monthly premium than with a supplement plan. In general, HMO plans have a convenient lower monthly premium, but more restrictions following the in-network guidelines.
To compare HMO and Supplement plans, you should understand the basics of Supplement plans as well. Medicare Supplements are an additional coverage option to add to your Original Medicare plan. These plans are intended to cover the various out-of-pocket costs of Medicare when needed. Under Original Medicare alone, you will have to pay for things such as your monthly premiums, many copayment/coinsurance fees, blood transfusions, and more. With a supplement plan, these fees are covered. There are 10 distinct supplement plans, each offering a variety of cost-coverage, including plans A, B, C, D, F, G, K, L, M, and N. Your choice will depend on your desire for coverage and budget, but the ones that offer the best coverage are plans G and N. If you want to learn more about these plans, check out our resources on the subject.
Certain healthcare costs are not covered by Original Medicare, such as out-of-pocket copayments and coinsurance. Supplement plans are intended to cover these costs. Medicare Advantage, on the other hand, provides additional benefits rather than cost coverage for Original Medicare. Medicare Advantage, for example, will cover the cost of hearing aids, but not your Part B copayments. Medigap, on the other hand, will cover Part B copayments but not hearing aids.
Think of Medicare Advantage as a way of saving money on your costs for necessary checkups, specialists, and other healthcare. Think of Supplement plans as a literal “supplement” to your Original Medicare plan that fills in the costly gaps that your plan does not cover. Your final choice will depend, then, on your own preferences.
Medicare on Video is Here to Help Find You the Right Plan—Contact Us Today for a Free Consultation
HMO plans are a great option for many Medicare beneficiaries, but how do you know if it’s right for you? We can help you find out, at no cost to you. We are dedicated to making people like you feel safe and secure in their insurance plans. If you would like a free consultation with one of our experts, give us a call at 877-88KEITH (53584), or email us at Keith@MedicareOnVideo.com.