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Understanding Medicare Managed Care Plans 


Medicare managed care plans are an alternative to Original Medicare. Otherwise known as Medicare Advantage plans with many plan types, most are either HMOs or PPOs. Managed-care plans provide benefits for gaps in Parts A and B coverage. These alternative health-care plans make up Part C of Medicare. Below, we’ll go over what you need to know about Medicare managed care plans.

What is a Medicare Managed Care Plans?

Medicare managed care plans are alternative options to Part A and Part B. Most managed care plans provide additional benefits for services that Original Medicare doesn’t include. Benefits can include routine vision, dental and hearing services.

Additionally, managed care plans offer prescription drug coverage. The cost of medications out-of-pocket can be financially exhausting. Medicare managed care plans can provide some relief. Enrolling in the right plan for you is key to making health-care more affordable.

The number of Medicare beneficiaries enrolling in managed care plans is on the rise.

Instead of working alongside Medicare-like Medigap insurance, Advantage plans replace Original Medicare. While providing additional benefits, these plans must also include all the benefits Medicare offers.

Medicare Managed Care vs Medicare Advantage

There is no difference between Medicare Managed Care plans and Medicare Advantage plans, they are the same thing.

Pros and Cons of Managed Care Plans

With the good, comes the bad, in life as well as Medicare coverage. Let’s look at the pros. Medicare Managed Care plans include equivalent coverage as Parts A and B. Plus, these plans include extra benefits like routine vision, hearing, and dental services. Some even include membership in fitness programs and prescription drug coverage. Benefits, as well as cost amounts, vary among plans.

On the other hand, managed care plans may limit beneficiaries to only the doctors within the plan’s network. If having the freedom to see any healthcare provider of choice is important, remember that Advantage plans limit provider options.

While traveling within the country, managed care pays for emergency services only. Coverage is not available when traveling internationally.

Seniors often live in northern states for the summer and come winter, they head south. The better known as snow-birds may find they’re out-of-network for half of the year. Enrolling in a Medicare Supplement plan may be a better option for these individuals.

Types of Medicare Managed Care Plans

Moreover, care plans are private health insurance companies that Medicare-approves. Plans offer care from a specific network of providers (doctors, hospitals, and others) at a lower overall cost. Medicare divides managed care plans into different plan types. Classifying each by using acronyms such as HMO, PFFS, PPO, or HMO-POS. Some are more popular, others are more expensive, and not all are available in certain areas.

Premium rates, out-of-pocket expenses, deductibles, coinsurance, and copayment amounts, and restrictions vary. Costs will depend on plan type, where you live, and insurance carrier.

Contact the plan directly for out-of-network coverage options and questions about available benefits.

Managed Care vs. HMO

The Health Maintenance Organization carries the most restrictions of all managed care plans. With no surprise, it’s also the least expensive option – making it the most popular.

HMOs have 4 main restrictions of coverage for members:

  1. Receive care ONLY from within the plans’ network of providers. Emergency situations are the exception. The plan pays nothing towards bills from an out-of-network provider. Instead, the member is responsible for the full payment.
  2. Choose an in-network primary care physician (PCP) for most medical services. A referral, written by the PCP is a requirement to see any other health-care professional.
  3. Plan administrators must agree the treatment/service is medically necessary. Otherwise, they may deny approval for the service.
  4. Lastly, HMOs have limited appeal rights. Members have limited rights to appeal a decision the plan makes. If a patient disagrees with a decision, filing an appeal may be difficult; or a waste of time. HMO plan employees review member appeals. Therefore, outside experts won’t offer a non-biased opinion.

Managed Care vs Fee-for-Service

Private Fee-for-Service plans members have the freedom of seeing a doctor of choice, whenever you want. That means visiting specialists without a prior referral. Under managed care plans, members pick from their plan’s network of providers. Doctors must provide referrals for specialists’ visits after determining services are medically necessary.

The PFFS routine check-up doesn’t include cancer screenings, such as mammograms. Whereas, manage care covers all routine and preventative screening tests. Fee-For-Service members will likely pay for doctor bills upfront, once the yearly deductible is met. Then, submit a claim later for reimbursement.

Deductible prices vary, usually ranging from $200-$500. PFFS plans reimburse members up to 80% of the bill. Meanwhile, members are responsible for the remaining balance.

Contrarily, managed care members pay a $5, $10, or $15 co-pay at the time of service when visiting doctors. For these members, their doctors’ office is responsible for filing the necessary and proper paperwork to ensure proper billing and payments.

Managed Care vs Indemnity

Indemnity health insurance plans are fee-for-service plans. Before HMOs, PPOs, and others, Indemnity plans were the main plans to choose from. Indemnity plans pre-determine the percentage of what they consider a reasonable and customary charge for certain services. Carriers pay a percentage of charges for a service and the member pays the remainder.

Costs fluctuate from physician to physician; no set contracts are in place. That means insurance companies can bill the beneficiary for anything the plan doesn’t cover. Members will receive reimbursement for medical expenses (up to a certain amount).

Indemnity plans have no provider network, members can visit the doctor(s) of their choice. Contrarily, managed care plans have a network(s) of providers, with different plan options.

Managed Care vs PPO

Like the HMOs, with some differences. PPOs provide more choices for choosing a doctor or health-care facility. Even though PPO insurance has a network of providers, the restrictions are less than HMOs. Plus, PPOs pay a portion of some out-of-network services.

Premium rates are often higher with PPOs and deductibles are common. However, there’s no need to see your primary doctor before visiting the healthcare provider/specialist of your choice.

An HMO-POS is a managed care plan that blends HMO and PPO policies together. HMO-POS members must have a primary physician.

Members pay no deductible amount, and co-payments are low for in-network services. Out-of-network coverage is like PPO coverage. Members pay the deductible amount, plus a percent of the doctors’ cost for services.

Managed Care vs Medicare Supplements

Managed-care plans and Medicare Supplement plans are not the same. This misconception is common. Both provide additional benefits to Original Medicare. However, they serve two totally different purposes. Managed-care plans or Advantage plans bundles all health-care coverage under one neat plan.

MA plans decide on rate amounts, making prices different from plan to plan. Processing payments are done through the private plan, not Medicare.

Medicare Supplement plans or Medigap policies also cover some gaps that Medicare doesn’t. However, Supplement insurance works in combination with Original Medicare.

Medigap can help cover expenses such as deductibles, co-payments, and co-insurances. Medicare covers its part of the approved medical charges; then Medigap pays its part of the bill. Beneficiaries are responsible to pay the remaining balance.

What is a Medicare Managed Care Program Provider?

Each state and service area will have different managed care companies to choose from. However, not all companies are available nationwide. Anyone seeking extra health-care coverage should compare plans in their service area.

How to Get Help with Medicare Managed Care Plans

Picking the right insurance company makes all the difference in quality and cost of care. Allow our team of licensed agents to help! We can do all the hard work, even find and compare plans for you.

We provide customers with different ratings, price quotes, and compare different benefits for each plan. Give us a call today at the number above and let us walk you through the process.

Understanding the different plans can be, confusing, to say the least. We’re dedicated to answering your questions and finding the right coverage option for you. If you can’t call the number above, fill out the online rate comparison form.

Lindsay Malzone

Lindsay Malzone is the Medicare expert for MedicareFAQ. She has been working in the Medicare industry since 2017. She is featured in many publications as well as writes regularly for other expert columns regarding Medicare. You can also find her over on our Medicare Channel on YouTube as well as contributing to our Medicare Community on Facebook.

4 thoughts on “Understanding Medicare Managed Care Plans 

  1. My mom has an advantage plan thru Tufts Medicare Preferred but was approved for the Buy In program which covers co-insurance, premiums and deductibles for part B. Does she need both? If admitted will the part b cover what the advantage plan doesn’t?

    1. Hi Ang! Since the buy-in program will only cover cost-sharing under Part B, it is beneficial to have additional coverage, such as a Medicare Advantage plan. I would also double-check that the program she is in does cover all cost-sharing under Part B and not just the premium.

  2. My sister-in-law is in a nursing home in Decatur, IL. She has a UHC Group Medicare Advantage (PPO) insurance policy Group No.12809 through the Illinois Teachers Retirement System. According to the benefits document the copay is 20% from the first day forward during the benefit period. However the nursing home people told her that the insurance company said the first 20 days were $20 each and the next 6 days were $184 each for a private room which is $245 per day for private pay. This would cover February charges. Something seems to be wrong here. Would you have any ideas or opinions about this situation? Thanks

    1. Hi Jay. Unfortunately, that sounds correct. Medicare only covers the first 20 days of Skilled Nursing Care at 100%, then days 21-100 you pay around $185.50 per day. After 100 days, you’re 100% responsible for the cost. Since you have a Medicare Advantage plan, the out-of-pocket costs are different. That’s probably why you’re having to pay $20 per day for the first 20 days instead of $0. If your sister-in-law had a Medigap plan instead of a PPO, she would’ve had all the coinsurance covered as well as an additional 365 days covered if needed. Original Medicare and Medicare Advantage plans do not have good coverage for Skilled Nursing Care.

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