Medicare Advantage plans are supplemental Medicare optional insurance delivered in a managed care or private insurance environment. A Medicare Advantage insurance plan can be an HMO, PPO, FFS, Medical Savings Account program, or Special Needs program. All are still part of Medicare and all require enrollment in Part A and Part B. Medicare Advantage plans are sometimes called Part C.
Special needs programs are limited as a rule to those in nursing facilities or those dual eligible for Medicare and Medicaid or those with certain complex disabling conditions.
Medical Savings Accounts or MSA plans are Medicare Advantage plans that have two distinct parts. The first part is a high deductible health plan that pays nothing until you reach the deductible. The second portion of an MSA plan deposits money from Medicare into a savings account that can only be used for medical expenses.
FFS stand for "fee for service." The individual insurance company decides what is covered and how much you and they will pay rather than Medicare. Often there are extra benefits over original Medicare coverage, but you can pay less or more than Medicare would pay.
The average Medicare advantage plan is an HMO or PPO, both managed care systems. HMO stands for health maintenance organization while a PPO is a preferred provider organization. Both involve a network of providers and facilities that must be used to receive benefits. Some require referrals to see specialists and all emphasize preventative care.
While they may have deductibles, HMO and PPO Medicare Advantage plans usually involve set copayments rather than percentage coinsurance. Medicare Advantage plans, also called MA plans, all include coverage for prescription drugs and do not have a "donut hole" for prescription coverage.
Most managed care plans offer extra services and benefits not covered by original Medicare and are attractive as well because they cost less than most MediGap plans. The limitation is in being required to use in network providers and facilities to receive maximum or in some cases any benefits.
MA or Medicare Advantage plans are not sold by the government but by private insurance carriers. Different plans offer different benefits and premiums are also variable making it worthwhile to shop around for the most benefits at the best cost.