Under the fee-for-service payment system, you can choose any licensed physician and use the services of any hospital, health care provider or facility certified by Medicare.
Generally, a fee is paid each time a service is used. Medicare pays a share of your hospital, doctor, and other health care expenses. You are responsible for certain deductibles and coinsurance payments- the portion of the bill Medicare does not pay. You must also pay all permissible charges in excess of Medicare's approved amounts as well as charges for services not covered by Medicare.
A managed care plan is a group of doctors, hospitals, and other health care providers who have agreed to provide care to Medicare beneficiaries. In managed care, you usually get all of your care from the plan's doctors and health care providers, except in emergencies or when you are out of the plan's service area and have an urgent medical need. Depending on the plan, you may have to pay a monthly premium and a copayment each time you go to the doctor or use other services.
Pros and Cons of Managed Care
- Managed care plans generally cover more services and have fewer out of pocket
costs than traditional fee-for-service insurance. However, managed care plans also
have different rules and generally maintain some control over important health care
decisions. They also can limit access to specialists and intervene in other medical
decisions.
- All managed care plans allow you to select a primary care doctor from those who
are part of the plan. If you do not make a selection, one will be assigned to you.
Your primary care doctor is responsible for managing your medical care, admitting you
to a hospital and referring you to specialists. You are allowed to change your primary
care doctor as long as you select another primary care doctor affiliated with the plan.
- Each plan has its own network of hospitals, skilled nursing facilities, home health
agencies, doctors and other professionals. Depending on how the plan is organized,
services are usually provided either at one or more centrally located health facilities
or in the private practice offices of the doctors and other health care professionals
that are part of the plan. You generally must receive all covered care through the plan
or from health care professionals to whom the plan refers you. In most cases, the plan
will not pay if you go outside the plan without permission.
- Managed care plans contract with Medicare to provide all of Medicare's benefits. In
addition, managed care plans frequently offer additional benefits, such as help with
prescription drugs, and there is little or no paperwork in a managed care plan.
- You may have to pay a fixed monthly premium and a copayment each time a service is used.
The premiums and copayments vary from plan to plan and can be changed each year. You also
must continue to pay the Part B premium to Medicare. You do not pay Medicare's deductibles
and coinsurance.
- Usually, there are no other charges no matter how many times you visit the doctor,
are hospitalized, or use other covered services. Your costs are, therefore, more
predictable than under fee-for-service Medicare.
- In addition to offering you all your Medicare benefits, many plans promote preventive
health care by providing extra benefits such as eye examinations, hearing aids, routine
physicals, and scheduled inoculations for little or no extra fee.
- Before enrolling in a managed care plan, you should find out whether the plan has a
"risk" or a "cost" contract with Medicare. There's an
important difference.
The information above summarizes general employee benefit provisions. It is not intended to specify details of any particular employer's plan, nor is it a guarantee of benefits. Contact your benefit representative about specific details regarding your company's employee benefit plan.