What Healthcare Providers Need to Know About Medicare Advantage

Once an adult in the United States turns 65, they earn the right to enroll in Medicare, a senior-focused federal health insurance program that covers hospital services, medical services, and prescription drugs. Adults that want to save on their Medicare bundle may also opt for Medicare Advantage. Also known as Medicare Part C, Medicare Advantage plans are Medicare plans offered by private insurers. They offer additional benefits and often come at lower costs, with many plans even charging $0 monthly premiums.

But what does Medicare Advantage mean for healthcare providers? Below, we’ll dive deeper into Medicare Advantage, looking at what it covers, what it doesn’t cover, and how it differs from Original Medicare.

What Does Medicare Advantage Cover?

Medicare Advantage plans will always include Medicare Parts A and B, which cover hospital services and medical services respectively. Often, Medicare Advantage also comes with Medicare Part D, or prescription drug benefits, as well as other additional services. KelseyCare Advantage shows that Medicare Advantage can include vision benefits, dental benefits, and even access to senior-focused fitness programs. Benefits covered by Medicare Advantage will differ from provider to provider.

How Does Medicare Advantage Compensate Healthcare Providers?

As mentioned previously, Medicare Advantage plans often charge $0 monthly premiums. How, then, do they compensate their providers?

When companies offer Medicare Advantage plans, they receive a set amount of money from the federal government. These funds are enough to cover Medicare Parts A and B. However, most companies try to save this money by sticking to a limited provider network. This way, they only have to compensate a select number of healthcare providers. As such, payers get to roll their savings into their patients.

Additionally, though Medicare Advantage plans don’t charge monthly premiums, patients still pay out-of-pocket costs. Providers then receive compensation through the company’s Medicare-provided allowance, and the deductibles, coinsurances, and copayments patients pay.

How Do Networks Affect Healthcare Providers

How Do Networks Affect Healthcare Providers?

Patients enrolled under Medicare Advantage can choose between Health Maintenance Organizations (HMO) and Preferred Provider Organizations (PPO). Patients that choose HMOs pay lower monthly premiums but are limited to their provider network. On the other hand, patients that choose PPOs can enlist the services of any provider but pay less to see in-network providers.

As The Behavioral Healthcare Executive shows, being part of a provider network can offer many benefits to both payers and providers. For one, due to the differences in costs, member patients will be more likely to seek the services of providers in their network. This could drive more patients into a provider’s practice. And since being part of a network is also a long-term relationship between healthcare providers and payers, healthcare providers no longer need to rely on self-pay, which forces them to do a lot of their own advertising themselves. In-network providers have payers doing their marketing for them.

What Do Patients Prefer?

Medicare Advantage is a popular option for many patients. By 2017, a third of adults eligible for Medicare were enrolled under a Medicare plan. Enrollment in Medicare Advantage is expected to increase to 41% by the year 2027. Though Medicare remains more popular, Medicare Advantage has also become a viable option for many due to its affordability and quality benefits.

State of Medicare Advantage During the Pandemic

In 2020, the Centers for Medicare and Medicaid Services announced that it would waive or reduce cost-sharing fees for telehealth services to reduce safety risks during the pandemic. As such, many Medicare Advantage plans offered additional telemedicine benefits. Additionally, 2021 saw the expansion of long-term care coverage, including in-home personal care programs, adult day programs, and meal delivery services.

Medicare Advantage is a kind of health insurance plan offered to seniors by private insurers. By being strategic with federal allowances, Medicare Advantage can offer more benefits at a reduced cost, inviting more enrollees and allowing partner providers to get a consistent stream of income.