Medicare Advantage plans were created to solve the problem of large out-of-pocket expenses and gaps in coverage with Original Medicare. The Advantage program offers managed care that comes in several forms, including health maintenance organization (HMO) plans and preferred provider organization (PPO) plans. The organizations that offer these plans achieve savings by pooling healthcare resources into a network. Private Fee-for-Service (PFFS) plans are another kind of Medicare Advantage plan. Here are the basics of PFFS plans, according to the official U.S. government website for Medicare.
Medicare Advantage PFFS Plans
Because managed care plans offer lower costs by using networks of care, all Medicare Advantage plans will have some sort of restriction on what doctors you can see and what facilities you can use. However, with PFFS plans, you have the freedom to see any doctor you’d like that is in your plan’s network, including specialists.
This is not the case with HMO plans, in which you must choose a primary doctor and need permission to see a specialist. PFFS plans are therefore less restrictive than some other kinds of Medicare Advantage plans.
Whether or not PFFS plans are the right option for you depends on your use of medical services. If you anticipate that you will have few medical needs during the year, a PFFS plan is a good choice. This is because your costs are limited to your premium as well as the coinsurance or copayment for each service that you use.
But what about if you have a chronic condition or anticipate more frequent use of healthcare resources? In this case, a different plan type, like an HMO plan or a Special Needs Plan (SNP), might be a better choice.
Another thing to consider before deciding on a PFFS plan is the network’s providers in your location. PFFS plans are only available where private organizations choose to offer them. If there is a particular provider that you are interested in seeing, you should contact their office to see if they accept the payment terms set by your PFFS plan.
What about drug coverage? Some organizations offer drug coverage as part of their PFFS plan. However, if the plan you are considering does not cover drugs, you are can enroll in Medicare Part D, which is an insurance program that covers your drug costs in exchange for a premium.
You can join a PFFS during the Open Enrollment Period, which is from October 15th to December 7th of each year.
If you don’t like your PFFS plan, you can always switch from a PFFS plan to a different Medicare Advantage plan or back to Original Medicare, but you must do so during the Medicare Advantage Open Enrollment Period, which is January 1st to March 31st of each year.
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