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Advantage Plans

Types of Medicare Advantage Plans

Not all Medicare Advantage plans work the same way. If you have chosen to enroll in a Part C plan, you will need to understand how the different types work so that you can decide which one will suit your needs. There are five kinds of Medicare Advantage plans to consider.

The Five Types Part C Plans

Medicare Advantage plans are categorized into five types of plans.

HMO

Health Maintenance Organizations

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PPO

Preferred Provider Organizations

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SNP

Special Needs Plans

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PFFS

Private Fee-for-Service Plans

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MSA

Medical Savings Account Plans

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All of these plans are designed to fill in the gaps in coverage from Original Medicare. Although their goal is the same as that of Medicare supplement plans, the two are vastly different.

Medicare Advantage and Enrollment and Eligibility

To be eligible for a Part C plan, you must already be enrolled in Medicare Parts A and B. As long as that requirement has been met, the only individuals ineligible for a Part C plan are those with End-Stage Renal Disease (ESRD).

These need to apply if you are to be considered eligible for a Medicare Advantage plan:

  • You live in the service area of the plan you want to join. The plan you wish to enroll in can give you more information about its service area. If you live in another state for part of the year, ask if the plan will cover you there.
  • You have Medicare Part A and Part B.
  • You’re a U.S. citizen or lawfully present in the U.S.

There are certain times each year when you can enroll in a Medicare Advantage Plan. It is usually best to enroll in a plan by calling 1-800-MEDICARE, rather than by calling the new plan.

Medicare Advantage Costs

Currently, about 30% of Medicare beneficiaries choose to enroll in a Medicare Advantage plan rather than a Medicare supplement. The driving factor is usually the cost. Medicare Advantage plans typically have much lower premiums. However, it is important to understand that no matter which one you enroll in, you will still be responsible for the Medicare Part B premium.

If you are enrolled in a Medicare Advantage plan, your insurance carrier is responsible for your medical bills. You will still pay for expenses and services you receive from providers and be expected to pay for the copays associated with the plan.

Medicare Advantage and Drug Coverage

Many Medicare Advantage plans include prescription drug coverage, so it is uncommon for Part C members to also enroll in a Part D plan. That being said, it is important that you look at the plan’s drug formulary to make sure your medications are covered under the policy.

Now, let’s briefly discuss each type of Medicare Advantage plan.

Health Maintenance Organizations

HMO

Medicare beneficiaries who enroll in an HMO must receive care from an in-network provider. These plans do not offer any coverage outside of the plan’s network, except for in emergency situations. If an HMO plan member receives care outside of the network, they will be responsible for 100% of the expenses.

There are a limited number of HMO plans that allow for some out-of-network benefits, but these premiums will be higher than those for a traditional HMO plan.

Under an HMO, individuals will be required to have a referral to see a specialist and they will have to designate a primary care physician.

Occasionally, a provider will choose to leave the plan’s network. If this happens, the plan will notify you and you must choose a new provider.

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Preferred Provider Organizations

PPO

A PPO works similar to an HMO plan, with one difference. While it is best if the PPO member receives care from an in-network provider and facility, there are still benefits when receiving out-of-network care.

Remaining in the PPO network will give the member the most amount of coverage. Seeking care outside of the network is still allowed, but the plan will pay less for benefits and the member will have to pay more out-of-pocket.

PPO members do not have to designate a primary care physician and are not required to have a referral to see a specialist.

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Private Fee-for-Service Plans

PFFS

PFFS plans are very different from other types of Medicare Advantage plans. Under a PFFS plan, a beneficiary can receive care from any provider or facility that agrees to the plan’s payment terms and conditions. Of course, not all providers will accept those terms and they may choose to stop accepting the terms at any time. Like PPO plans, PFFS plans do not require their members to choose a primary care physician and obtain a referral to see a specialist. The cost for these plans will be higher than with HMO plans since the member has more options for out-of-network care. However, doctors who do not accept the plan’s payment terms also do not have to treat patients with PFFS plans.
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Special Needs Plans

SNP

SNPs are only available to Medicare beneficiaries who have specific diseases or disabilities. These plans will adjust the choices in doctors, the benefits, and the drug formularies based on the medical needs of the group they serve.

SNPs have a network of specialist doctors that their member’s need to see for their care. Plan members will need to receive care from these doctors, but there is coverage for care received outside of the network in emergency situations.

All Special Needs Plans must meet the following requirements:

  • Include prescription drug coverage
  • Must require designation of a primary care physician and care coordinator
  • Must require a referral for visits to a specialist
  • Must cover annual mammogram screenings and Pap tests, and allow for pelvic exams every other year

Once a Medicare beneficiary qualifies for an SNP, they can enroll at any time. These individuals will qualify for a Special Enrollment Period.

Individuals with an SNP plan will have their services and providers coordinated. Following the care coordination helps to ensure optimal results in treatment.

Individuals who qualify for both Medicare and Medicaid should make sure that all of their doctors under their SNP plan also accept Medicaid. Those who reside in an institution should make sure the facility is included in the plan’s coverage.

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Medical Savings Accounts

MSA

You are probably familiar with HSAs – Health Savings Accounts. These accounts are limited to those with high-deductible health insurance policies. Those who qualify can contribute pre-tax dollars to a savings account that can later be used for qualified healthcare expenses.

A Medicare Medical Savings Account (MSA) is similar to an HSA but is only available to those with a high-deductible Medicare Advantage plan. In an MSA, the plan deposits funds into the member’s savings account. These funds can be used for healthcare costs before meeting the plan’s deductible.

Learn More About the Types of Medicare Advantage Plan

We hope this has given you a basic understanding of the different types of Medicare Advantage plans. There is a lot to consider when enrolling in one of these plans and it is best to speak to a knowledgeable agent about your options.

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  • We are not connected with or endorsed by the United States government or the federal Medicare program. We do not offer every plan available in your area, and any information we provide is limited to those plans we do offer in your area. Please get in touch with Medicare.gov or 1-800-MEDICARE to get information on all your options. Health Insurance sold on moinsuranceadvice.com is processed through the licensed entity: Temmen Insurance, Inc. 2025 All rights Reserved.
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