Making the Connection between Medicare and Managed Care
Supplement Supplemental Medigap
You’re about to turn 65 and are considering your Medicare options. Do you choose a traditional fee-for-service plan and add Medigap or opt for a managed care plan? It’s a tough, and often confusing, decision.
Difference between Medicare Fee-for-Service and Managed Care Plans
The benefit of a fee-for-service Medicare plan is that you can use any health care facility or provider you choose. You’ll be responsible for certain deductibles, co-pays and costs not covered by Medicare; however, the right Medicare supplement insurance (or Medigap) plan can help you with those.
Managed care plans, on the other hand, were designed to help decrease the costs of health care through capitation. Capitation is the establishment of a network of health care providers who receive a fixed amount based on the number of members enrolled in the plan. The purpose is to encourage health care providers to care for patients in an efficient manner and to promote healthy behavior from their members in order to avoid costly treatments.
In addition, Medicare beneficiaries who are in a managed care plan are required to get referrals from their primary care physician before seeing a specialist.
Five Types of Medicare Managed Care Plans
Once you decide to choose a Medicare managed health care plan, you’ll need to choose what type of plan. There are five different types of plans: Health Maintenance Organization (HMO), Medicare Risk HMO, Medicare Cost HMO, Preferred Provider Plan (PPO) and Point-of-Service (POS) Plan.
- HMO: Members receive care on a pre-paid basis through a network of contracted providers. Members select providers from a participating group. Depending on the plan you may be required to pay a monthly premium and/or copayments for office visits or prescriptions.
- Medicare Risk HMO: Members receive all covered care through their plan or through referral by the plan. If you go outside the plan, neither the plan nor Medicare will cover the service. This is the least expensive, with the fewest choices.
- Medicare Cost HMOs: Members receive all covered care through their plan and pay only the copayments. Plus you can visit care providers outside the plan; however, the plan won’t cover the cost and you’ll have to pay Medicare copayments, deductibles and other permissible costs. Considered a good option for those who travel or live outside the service area part of the year.
- PPO: You select a primary care provider (PCP) and are encouraged to use him or her for all care. Other contracted physicians and services are then available at a discounted rate. If you go outside the network, you lose the discounted rates.
- POS: This is an option under Medicare Risk HMOs. You are permitted to receive certain services outside the plan network and the plan will pay a percentage of the charges. You are expected to pay at least 20 percent of the bill in return for this flexibility
Advantages and Disadvantages of a Medicare Managed Care Plan
Naturally, as with any plan, there are good and bad aspects. Some of the major highlights are the fact that managed care plans are designed to increase preventive care by offering better preventive benefit coverage. Managed care plans are less expensive than and offer services and items not covered under fee-for-service plans (i.e. expanded prescription services).On the other hand, there is less flexibility in your choices, you are required to get referrals for care beyond your primary care physician and some members feel there is less patient-physician interaction due to capitation. Supplement Supplemental Medigap