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Understanding Medicare Managed Care Plans 


Medicare managed care plans are an alternative option to Original Medicare. Otherwise known as Medicare Advantage plans, most are either HMOs or PPOs. However, there are other less common plan types available.

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Managed care plans provide additional benefits to Medicare Part A and Part B coverage. These alternative health care plans make up Medicare Part C. Below, we will go over what you need to know about Medicare managed care plans.

What is a Medicare Managed Care Plan?

Medicare managed care plans are alternative options to Medicare Part A and Part B. If you have heard of a Medicare Advantage plan, you have heard of Medicare managed care plans; they are the same.

Most managed care plans provide additional benefits for services that Original Medicare does not include. These benefits can include routine vision, dental, and hearing services, as well as prescription drug coverage.

Instead of working alongside Original Medicare like Medicare Supplement plans, Medicare Advantage plans assume your risk from Original Medicare. This arrangement makes the managed care plan your primary coverage. Aside from providing additional benefits, managed care plans must also include all the benefits from Original Medicare.

Without additional coverage, the out-of-pocket cost of medications, dental services, vision care, hearing aids, and more can be financially exhausting. Medicare managed care plans can provide some relief. Enrolling in the right policy can help make your health care more affordable.

Pros of Managed Care Plans

Medicare Managed Care plans have several benefits that could make them stand out from other Medicare plans.

Some upsides of Medicare managed care plans include:

  • Medicare Part A and Part B benefits
  • Additional benefits (i.e., dental, vision, prescription drug coverage, transportation, gym membership, etc.)
  • Low monthly premium
  • Special needs plans are available
  • In-network and out-of-network coverage on select plans

Cons of Managed Care Plans

In Medicare coverage, as in life, with the good comes the bad. Although Medicare managed care plans do have several upsides, the downside of these plans can be just as impactful.

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Medicare managed care plan downsides include:

  • Strict provider and facility networks
  • High maximum out-of-pocket costs
  • Coverage does not travel with you
  • Referrals are required when visiting a specialist
  • No standardization for policies

Types of Medicare Managed Care Plans

Medicare-approved managed care plans offer care from a specific network of providers (doctors, hospitals, and others) at a lower monthly cost than Medicare Supplement plans. Medicare divides managed care plans into different plan types. Plan types include HMO, PFFS, PPO, or HMO-POS plans. Some are more popular, others are more expensive, and not all are available in every area.

Premium rates, out-of-pocket expenses, deductibles, coinsurances, copayment amounts, and restrictions vary between plans. Costs will depend on plan type, where you live, and carrier. To learn the differences between each plan, you will need to contact each carrier individually to find which is right for you.

Managed Care HMO Plans

HMO plans are a type of managed care plan with the most restrictions for policyholders.

HMOs have four main restrictions of coverage for members:

  1. Receive care ONLY from within the plan’s network of providers and facilities. Emergencies 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. The plan will require a referral in writing from your PCP to see any other health care professional.
  3. Plan administrators must agree that the treatment/service is medically necessary. Otherwise, the plan may deny approval for the service.
  4. Lastly, HMOs have limited appeal rights. Members’ rights are restricted when appealing a decision the plan makes. If a patient disagrees with a decision, filing an appeal can be difficult. HMO plan employees review member appeals. Therefore, outside experts will not offer an unbiased opinion.

Managed Care Point-of-Service (POS) Plans

Point-of-service (POS) plans are a type of Medicare managed care plan that acts as a hybrid HMO and PPO policy. POS plans offer several benefits found in both HMO and PPO plans.

These policies offer beneficiaries the freedom to use out-of-network doctors at a higher cost. However, if your primary doctor refers you to an out-of-network provider, you will pay the in-network costs.

With a POS plan, you must choose a primary care doctor who will provide most of your care. However, if you would like to visit a specialist without a referral, you can do so. Additionally, POS plans require prior authorization for certain services.

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Managed Care PPO Plans

Similar to HMOs, PPOs provide more choices for doctors and health care facilities. However, there are some differences between the plan types.

Even though PPO plans have a network of providers, the restrictions are fewer than on HMOs. Additionally, PPOs pay a portion of some out-of-network services.

Premium rates are often higher with PPOs, and deductibles are typical. However, with a PPO, there is no need to see your primary doctor before visiting the health care provider/specialist of your choice.

Managed Care vs. Medicare Supplement Plans

Managed care plans and Medicare Supplement plans are not the same. However, some people are under the false assumption that they are. This confusion is due to both coverage types providing additional benefits to Original Medicare.

Yet, these options serve two different purposes. Managed care plans or Medicare Advantage plans bundle all health care coverage with low monthly premiums and higher out-of-pocket maximums. Medicare Advantage carriers set the rates for their policies, so costs differ between plans. Instead of Medicare, the private insurance company processes payments.

Medicare Supplement (Medigap) plans also cover some gaps that Medicare leaves. However, you remain on Original Medicare for your primary coverage when you have a Supplement plan.

Medigap can help cover expenses such as deductibles, copayments, and coinsurances. Medicare covers its part of the approved medical charges before Medigap pays its part of the bill. Once both plans pay their portion, the beneficiary pays last.

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How to Get Help with Medicare Managed Care Plans

Picking the right insurance policy 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 and even find and compare the best plans for you.

Understanding the different plans can be confusing. Luckily, we are here to answer your questions and find the right coverage option for your needs. Reach us at the number above or fill out the rate comparison form to get started today!

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Sources:

MedicareFAQ is dedicated to providing you with authentic and trustworthy Medicare information. We have strict sourcing guidelines and work diligently to serve our readers with accurate and up-to-date content.

  1. Medicare Advantage Plans, Medicare . Accessed April 2022.
    https://www.medicare.gov/sign-up-change-plans/types-of-medicare-health-plans/medicare-advantage-plans
  2. Health Plan Info, CMS . Accessed April 2022.
    https://www.cms.gov/Medicare/Health-Plans/HealthPlansGenInfo

Jagger Esch

Jagger Esch is the Medicare expert for MedicareFAQ and the founder, president, and CEO of Elite Insurance Partners and MedicareFAQ.com. Since the inception of his first company in 2012, he has been dedicated to helping those eligible for Medicare by providing them with resources to educate themselves on all their Medicare options. He is featured in many publications as well as writes regularly for other expert columns regarding Medicare.

8 thoughts on “Understanding Medicare Managed Care Plans 

  1. 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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