Types of Medicare Advantage Plans

There are several different types of Medicare Advantage plans.

HMO (Health Maintenance Organizations)
HMOs account for the largest share (64%) of Medicare Advantage enrollment and have been available under Medicare for several years. HMOs are the most tightly managed plans and utilize a defined network of providers that beneficiaries generally must use to receive care (with some exceptions, such as emergency care).
PPO (Preferred Provider Organizations)
PPOs also utilize provider networks. However, with PPOs, patients can choose to obtain care outside the network for a higher cost-share amount.
PFFS (Private Fee-for-Service Plans)
PFFS plans are more flexible than HMOs and PPOs because they are not required to establish provider networks. Patients can see “any willing provider,” as long as they accept the plan’s terms and conditions. However, this is expected to change in 2011, as PFFS plans also will have to establish provider networks in certain counties.
MSA (Medical Savings Accounts)
MSAs combine a high-deductible health plan with an MSA into which Medicare makes annual deposits on behalf of enrollees. Beneficiaries draw from these funds to pay for qualified health care expenses until they meet a deductible (ranging from $2,500 to $5,100 in 2008), at which point the plan pays for all Medicare-covered services. In 2008, MSA plans have only 3,529 MA enrollees.
SNP (Special Needs Plans)
SNPs were created specifically to serve individuals with special needs, including institutionalized individuals (individuals residing or expecting to reside for 90 days or longer in a long-term care facility), dual eligibles (those individuals receiving both Medicare and Medicaid benefits), and other individuals with severe or disabling chronic conditions.