Medicare HMOs

Medicare HMOs

Medicare beneficiaries may elect to join an HMO as an alternative to traditional fee-for-service Medicare. Medicare HMOs contract with the Centers for Medicare & Medicaid to provide the full range of Medicare-covered services to Medicare beneficiaries for a fixed monthly fee from the government. Generally you have coverage for care only from providers who are part of the HMO network. The only exceptions are for emergency services, which you may receive anywhere in the United States and urgently needed services, which you may receive while temporarily away from your HMO’s service area. Therefore, if you spend part of the year (more than 90 days) outside the HMO’s service plan area, joining an HMO may not be in your best interest. When you first enroll in an HMO, you will be asked to select a primary care physician from the HMO’s list of doctors. A primary care doctor is responsible for managing all of your medical care, including referrals to a specialist like a cardiologist or gastroenterologist, when your doctor thinks you need it. Some HMOs offer a Point of Service (POS) option for an additional cost. Under the POS option, you will be allowed to see providers outside the network, and the HMO usually pays 70 or 80% of the cost.

Some HMOs also offer coverage for services that Original Medicare doesn’t provide, including prescription drugs, routine physical exams, eyeglasses and hearing aids. However, there has been an upward direction in costs for Medicare HMO subscribers. This has finally reached heavily competitive areas such as New York City in recent years. The result is that more HMOs charge premiums, have increased co-payments and reduced prescription drug coverage.For 2004. a significant example is that in-patient hospital care in most HMO plans in New York City carry charges for hospital stays ranging from $100 to $600. And other HMOs charge daily co-payments of $50 to $200 per day for a number of days of the stay.

Health Maintenance Organizations (HMOs) are the most common type of Medicare managed care plans. Other types of managed care plans are Preferred Provider Organization (PPO) and Provider-Sponsored Organization (PSO).
There are two PPOs with four plans n New York City These plans are part of a demonstration program of 33 new health plans offering, at a monthly premium, preferred provider (PPO) coverage in parts of 23 states. Included are New York, New Jersey and Pennsylvania. The health plans were offered starting January 2, 2003. Some of the common PPO features are as follows:

Networks of preferred providers, and access to providers outside the network are at higher cost-sharing amounts than network providers.

The demonstration program allows the PPO flexibility to determine how the benefits will be offered, but they must provide all of the benefits available under Medicare Parts A and B. Therefore applicants need to review plan materials carefully.

Unlike HMOs, the PPOs have no capacity limits. Consequently, they are able to enroll all beneficiaries. The PPO is on an annual contract, so it will have the same option of withdrawing from Medicare or reducing its service area as in an HMO.

To be eligible for a Medicare HMO or PPO:

1. You must have both Part A (hospital) and Part B (medical) Medicare

2. You can’t be medically diagnosed with end-state renal disease (ESRD).

3. You must live in the area in which the plan has agreed to provide services.

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