How the Medicare PPO Works
This is an often asked question, and it is important to understand the answer. The Medicare Advantage PPO plan is the Medicare version of a PPO. PPO stands for Preferred Provider Organization, and what that means is that it is a kind of managed care plan in which the insurance company has a network of providers on contract to provide services to to all members who hold a policy and pay premiums. A PPO allows you to go to doctors and hospitals outside of the plan network, but that usually costs you more. In other words, the insurance company pays less when you receive care from out-of-network providers (doctors and hospitals).
When people enroll into Medicare, the Federal government promises all members a core set of both hospital (Part A) and medical (Part B) benefits. Members can choose to have their benefits managed by the Federal government (Original Medicare) or through private insurance companies. If you choose to have your benefits delivered to your though a private insurer, you join what is called a Medicare Advantage Plan. There are many kinds of Advantage plans, and a Medicare PPO is simply one kind. It is also important to know that most Medicare PPO plans also offer prescription drug coverage, but it is important to verify that with the plan if you considering joining.
Two Types of Medicare Advantage PPO
In the Medicare system, there are actually two kinds of PPO, and you need to know what they are in order to understand their coverage.
- Local PPO plan These plans apply only to specific counties within a state. They do not cross state lines, and they may serve one or more counties.
- Regional PPO plan A regional plan delivers services within one of the twenty-six regions established by Medicare for coverage by Advantage Plans. A Regional PPO may serve more than one state.
Medicare PPO Plan Benefits
All Medicare PPOs must offer the same benefits under Medicare Part A and B promised by Original Medicare, although they reserve the right to choose how you receive them. The PPOs often offer some additional benefits not covered under Original Medicare, though you may have to pay extra for those benefits (such as eye glasses, hearing aids, or fitness programs).
Medicare Advantage PPOs, unlike HMOs, do not require referrals to see specialists or to go out-of-network. As mentioned above, they encourage you to use in-network providers by paying more on your coverage. Also, some plans will give you a discount on services if you pre-notify them before going to out-of-network providers.
Plans determine your out-of-pocked costs (often called cost sharing), such as deductibles, co-payments and coinsurance. Before you join such a plan, it is important for you to understand exactly what your cos-sharing responsibilities are to make sure you agree with them. Typically, the cost sharing determined by the private insurance companies who offer Advantage plans is much different than that required in Original Medicare. You need to understand how that cost sharing is going to affect you.
One final point to be aware of is that Medicare Advantage PPO plans, like all Advantage plans, are not supplemental coverage. If you currently have a supplemental insurance that pays after Medicare such as a retiree coverage or a Medigap policy, your supplemental coverage will stop paying if you join a PPO plan or any other kind of Advantage plan. PPO plans do not replace Medigap insurance or supplemental retiree coverage. So, if you thinking of joining a Medicare Health plan or Advantage plan, be certain you understand how that may affect any other coverage you have.
Related posts:
- Can My Medicare Part A Hospital Insurance Pay for All Of My Hospital Fees?
- Rules Private Medicare Providers Must Follow
- About California’s Medicare Supplement Insurance
- Being Eligible For Medicaid
