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Question: My friend has a $0 premium HMO, and I have a PPO plan. I pay a premium for my plan. Our copays are similar, so what are the differences?
Answer: In talking about insurance products, it is a lot like talking about cars. Every car has a different price, with different options, colors, and abilities. Insurance is the same way. There are many variables that impact your decision to choose one insurance product over another. You need to evaluate your physicians, your medications, where and how often you seek medical care, and many other variables that I would recommend using when choosing your coverage.
Both you and your friend have Medicare Advantage Plans. Medicare Advantage Plans are plans that replace your Medicare. You do not lose Medicare; it just becomes inactive when you enroll in these Medicare Advantage Plans. The Medicare Advantage Plan is responsible for helping pay for your health care. I will explain some of the differences between HMO's and PPO's.
All Medicare Advantage Plans are approved by Medicare to provide the coverage they offer. The plans are required to covereverything Medicare will cover, but they cover it differently. These plans often provide additional services as well, (not covered by Original Medicare) such as gym memberships, lower cost eye glasses, or sometimes limited dental coverage. Medicare Advantage plans have a wide variety of premiums in the plans that are offered (in addition to the Part B premium you are already paying). The Medicare Advantage Plans are paid by Medicare to provide you with coverage once you enroll. Medicare Advantage plans require you to pay co-pays for most of the services you receive. These services include doctor visits, Emergency Room visits, Hospitalizations, CAT scans, etc. These plans have an out-of-pocket maximum, that is the maximum amount you will ever have to pay in any given year for your covered medical care.
Your friend is enrolled in a type of Medicare Advantage Plan called a Health Maintenance Organization (HMO). Her HMO requires her to see her primary care physician for most things and she may need referrals to see specialists or other types of providers. These referrals are usually lifetime referrals. If she chooses to go to a physician, specialist or hospital that is NOT in the network of the plan she enrolled in, she pays the bill in full. There can be special exceptions to this rule, like worldwide coverage for emergency care or urgent care when she is away from home.
You have a type of Medicare Advantage plan called a Preferred Provider Organization (PPO). Most PPO's do not require a referral to see physicians and specialists. PPO's offer both in-network and out-of-network benefits. This means you can pick/choose who you see. The catch is you usually pay more when you see an out of network provider. Sometimes 'more' is $5 and sometimes it is significantly more (50% of the bill). There are also different "Maximum Out of Pocket" for in- and out-of-network treatment. Each PPO plan or company develops its own in-network and out-of-network provider list. Sometimes that in-network benefit is mostly local providers where you live. Sometimes that in-network list of providers is a national list of providers, giving you a much bigger selection of where and when to seek treatment.
HMO's and PPO's have many similar factors to consider. Before you join any Medicare Advantage Plan, be sure that your doctors participate and if not, be sure you understand how much it will cost to see them. This year enrolling in an HMO, this step is especially important as many products available locally do not include Roswell Park Comprehensive Cancer Center 'In Network". That means you may not be allowed to use that hospital if you have an HMO product.
When enrolling into an HMO, or PPO plan and you need drug coverage, you must purchase that drug coverage from the plans they offer. You can't get that drug coverage from another Medicare Part D plan or company. Most individuals who enroll in an HMO or PPO plan need prescription drug coverage, so they enroll in a plan with that drug coverage built in.
I want to stress again, if you join any kind of Medicare Advantage Plan, you are actually stepping out of traditional Medicare. You do not lose Medicare; you are simply choosing to use an alternate company to get your Medicare Coverage (opt out). You cannot join a Medicare Advantage plan unless you have both Medicare A & B. When you are in a Medicare Advantage Plan, you don't use your red, white and blue Medicare card – you only use your Medicare Advantage Plan's card.
Remember my earlier reference to cars. Like choosing a car, there are many factors to consider. You and your friend probably don't drive the same type of vehicle. So neither of you are wrong if the Medicare Advantage plan you have works for you. You probably have different cars, so you can have different health insurance and still be friends.
Janell Sluga is a Geriatric Care Manager helping seniors in our community access services and insurance. To reach her, please email editorial@post-journal.com.