Medicare+ Choice (Part C)

What Is Medicare+ Choice?

Medicare+ Choice expands health care options for Medicare beneficiaries. These options were created with the Balanced Budget Act of 1997 in order to reduce the growth in Medicare spending, making the Medicare trust fund last longer, and give beneficiaries more choices.

Previously, you could receive your Medicare benefits through Original Medicare or a Medicare Managed Health Maintenance Organization (HMO). With Medicare+ Choice (also called Medicare Part C), you can choose from five new ways in which to receive your Medicare benefits.

Please note: If you do not actively choose a new plan, then you will stay in Original Medicare or your present Medicare HMO.

These new options are described below. However, it is important to remember that each of these options will have advantages and limitations, and no option will be right for everyone. Also, not all options will be available in all areas. In time, more options will become available as existing plans enlarge their service area and new plans apply for service.

When learning about these new options, please keep in mind that you do not have to change if you are happy with how you currently receive Medicare benefits. You should not change to a new program until you have carefully analyzed it and determined how you would benefit from it.

Medicare+ Choice Options:

  • Original Medicare: This will always be available. If you want to continue receiving your benefits this way, then you do not have to do anything.
  • HMO: This is a managed care plan with a network of providers who contract with an insurance company. You choose a primary care physician who coordinates your care. You agree to follow the rules of the HMO and use the HMO's providers.
  • HMO with Point-of-Service (HMO w/pos): This is similar to the Medicare+ Choice HMO, except you can use providers outside of the network. However, you will pay higher deductibles and copayments when you go outside of the network.
  • Preferred Provider Organization (PPO): This is another managed care plan. It is formed by a group of doctors, hospitals, and other providers who contract with an insurance company. You do not have to choose a primary care physician. You can go outside of the network, but you will pay higher deductibles and copayments when you do.
  • Provider Sponsored Organization (PSO): This is a managed care plan with a network of providers. The providers administer the plan and take the financial risk. You choose a primary care physician and agree to use plan providers. Most services will be provided by the network.
  • Private Fee for Service Plans (PFFS): This is an insurance plan, not a managed care plan. The plan, not Medicare, sets the fee schedule for providers, but providers can bill up to 15% more. You see any providers you choose, as long as the provider agrees to accept the payment schedule. Medical necessity is determined by the plan. The plan does not have to have a quality assurance program.
  • Religious Fraternal Benefit Society Plans: This is one of the managed care plan types (HMO, HMO w/pos, PPO, PSO) which is formed by a religious or fraternal organization. These plans may restrict enrollment to members of their organization.
  • Medical Savings Accounts (MSA): This is a health insurance policy with a high deductible ($6,000 for 1999) combined with a savings account. Medicare pays the insurance policy premium and deposits money into your MSA each month. You can use the money in your MSA to pay your medical costs (tax free). You have free choice of providers. The providers have no limit on what they charge.

Medicare+ Choice Plans: Beneficiary Protections

  • Guaranteed Issue: The plan must enroll you if you meet the requirements.
  • Care must be available 24 hours per day, seven days a week.
  • You must have access to specialists.
  • Doctors must be allowed to inform you of all treatment options.
  • The plan must have a grievance and appeal procedure.
  • If a layperson would think that a symptom could be an emergency, then the plan must pay for the emergency treatment.

Medicare+ Choice Managed Care Plans: Beneficiary Protections

  • The plan cannot charge more than a $50 copayment for visits to the emergency room.
  • You or your doctor can appeal a denial of service and the appeal must be handled in a "timely" way. The plan must make an initial determination with 14 days. Reconsideration of a decision must be made within 30 days. Decisions regarding urgent care must be made within 72 hours.
  • The plan must have a process for identifying and evaluating persons with complex or serious medical conditions. A treatment plan must be developed within 90 days of your enrollment.
  • If your treatment plan includes specialists, you must have direct access to those specialists. You do not need a referral from your primary care physician.

Medicare+ Choice Plans: Common Elements

  • All plans have a contract with the Centers of Medicare and Medicaid Services (Medicare).
  • The plan must enroll anyone in the service area that has Part A and Part B, except for End-Stage Renal Disease patients.
  • Each plan must offer an annual enrollment period.
  • You must pay your Medicare Part B premium.
  • You pay any plan premium, deductibles or copayments.
  • All plans may provide additional benefits or services not covered by Medicare.
  • There is usually less paperwork for you.
  • The Centers of Medicare and Medicaid Services (Medicare) pays the plan a set amount for each month that a beneficiary is enrolled.
  • The Centers of Medicare and Medicaid Services monitors appeals and marketing plans. All plans, except for Private Fee-for-Service, must have a quality assurance program.

Source: Indiana Senior Health Insurance Information Program (SHIIP)