While the majority of people with Medicare get their health coverage from Original Medicare, some people choose to get their benefits from a Medicare private health plan, sometimes called a Medicare Advantage plan.
These private health plans contract with Medicare and are paid a fixed amount to provide Medicare benefits. They are generally managed care plans. The most common types are Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO), and Private Fee-For-Service (PFFS) plans.
You may also see Medicare Advantage plans called Special Needs Plans (SNP), Provider Sponsored Organizations (PSO) and Medicare Medical Savings Accounts (MSAs).
You still have Medicare if you join a Medicare private health plan. In most cases, you must still pay your Part B monthly premium (and your Part A premium, if you have one). The plan must provide all Part A and Part B services but can do so with different rules, costs and restrictions that can affect how and when you can get care.
All private health plans must include a limit on your out-of-pocket expenses for Part A and B services. These limits tend to be high. Plans can’t charge you more than Original Medicare for certain services, like chemotherapy and dialysis, but they can charge you more than Original Medicare for others, like home health and inpatient hospital services. Private plans can also provide additional benefits that Original Medicare does not cover, such as routine vision or dental care.
Different types of plans have different rules for how and where you can get coverage. However, even plans of the same type may have slightly different rules so you should always check with a plan directly to find out how coverage works.
Private health plans often charge a premium in addition to the Medicare Part B premium. They also generally charge a fixed amount called a copayment whenever you receive a service.
You can join any Medicare private health plan if:
- You have Medicare Parts A and B; and
- You live in the health plan's service area; and
- You do not have End-Stage Renal Disease (ESRD).
- If you have ESRD that requires dialysis or a kidney transplant, you can enroll in an MA plan if you join a Special Needs Plan that specifically accepts people with ESRD or if other special circumstances apply.
If you want Medicare coverage through a private plan and also want drug coverage (Part D), you must generally choose a private health plan that has this drug coverage as part of its benefits package. (If you join an MSA, a PFFS without drug coverage, or a Cost Plan, you can join a stand-alone drug plan known as a PDP.)
If you have health coverage from your union or current or former employer when you become eligible for Medicare, your coverage may automatically convert into a Medicare private health plan. You have the choice to stay with this plan, choose Original Medicare, or switch to another Medicare private health plan.
Be aware that if you switch to Original Medicare or another Medicare private health plan instead, the employer or union could terminate or reduce your health benefits, the health benefits of your dependents, and any other benefits you get from your company. Talk to your plan before switching to find out how your health benefits and other benefits will be affected.