• It's Your Choice!
  
• How Do the Fee-for-Service And Managed Care Systems Work?
  
• Can I Enroll in a Managed Care Plan?
  
• How Can I Join a Plan and When Does My Coverage Begin?
  
• What Other Factors Should I Consider?
  
• If I Enroll, Where Do I Go For Care?
  
• Plan Hospital and Medical Benefits
  
• Do I Select My Own Doctor?
  
• What About Specialists and Hospital Care?
  
• How Can I Appeal a Payment Decision Made by an HMO?
  
• What are the Advantages of Joining a Managed Care Plan?
  
• What are the Disadvantages of Joining a Managed Care Plan?
  
• How and When May I Disenroll?
  
• Do I Need Medigap Insurance If I Join a Managed Care Plan?
  
• Medicare SELECT
  
• Health Insurance Information & Counseling

You can receive your Medicare benefits through the fee-for-service delivery system or through a managed care plan such as a health maintenance organization (HMO).

Whether you choose fee-for-service or managed care, you receive all of Medicare's hospital and medical benefits to which you are entitled. The differences between the two systems include how the benefits are delivered, how and when payment is made, and how much you might have to pay out of your pocket.

How Do The Fee-for-Service And Managed Care Systems Work?
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.

Some of those potential out-of-pocket costs can be avoided or reduced through the purchase of private insurance to supplement Medicare. It is called "Medigap" insurance and it is specifically designed to close some of the payment gaps in your Medicare coverage.

Managed care plans might be thought of as a combination insurance company and a health care delivery system (doctor/hospital). Like an insurance company, they cover health care costs in return for a premium, and like a doctor or hospital, they provide health care services.

In addition to being called managed care plans, they also are known as prepaid or coordinated care plans, or just HMOs.

Each plan has its own network of hospitals, skilled nursing facilities, doctors and other health care professionals. Services usually must be obtained from the professionals and facilities that are part of the plan.

Depending on how the plan is organized, the services are provided either at one or more centrally located health facilities or in the private practice offices of the doctors and other health care professionals affiliated with the plan.

Plans may charge enrollees a monthly premium, which can vary from plan to plan and is subject to change annually. Plans that have premiums typically charge from $50 to $75 per month.

In addition to a monthly premium, plans commonly charge a small copayment for each appointment and drug prescription.

Copayments typically range from $5 to $15.Usually there are no additional charges by the plan no matter how many times you visit the doctor, are hospitalized, or use other covered services.

Can I Enroll in a Managed Care Plan?
Most Medicare beneficiaries are eligible for enrollment in a managed care plan, and most parts of the country are served by one or more plans that have contracts with the Health Care Financing Administration (HCFA) to serve Medicare beneficiaries.

The only enrollment requirements are:

1. You must at least be enrolled in Medicare Part B (it pays doctor bills) and continue to pay the Part B monthly premium. The premium is $42.50 per month in 1996.

2. You cannot have elected care from a Medicare-certified hospice.*

3. You cannot be medically determined to have end-stage renal disease (ESRD).* If, however, you are a member of a plan when you first be come eligible for Medicare and the plan has a Medicare contract, you may change to Medicare membership with the plan even if you have ESRD.

4. You must live within the area in which the plan has a Medicare contract to provide services.
   

How Do I Join a Plan and When Does My Coverage Begin?
You can get the names of the managed care plans in your area by calling your State insurance counseling office or by calling Medicare at 1-800-638-6833.

All plans that contract with Medicare must have an advertised open enrollment period of at least 30 days once a year. Most plans, however, have continuous open enrollment, so you may join at anytime. Medicare beneficiaries cannot be denied membership because of poor health, a disability, or preexisting condition.

Depending on the day of the month that you enroll, you may choose to have coverage begin either the first day of the month after your enrollment application is received by the plan or up to three months later. The plan must give you written information explaining your coverage and when it starts.

Before joining a plan, read the plan's membership materials. Make sure you understand your rights as a plan member and know what benefits you will receive.

If you live in an area served by more than one plan, compare premiums, copayments, and benefits to determine which plan best suits your needs at a price you can afford.

What Other Factors Should I Consider?
Get information about the doctors available to serve you and the hospitals and other health care facilities affiliated with the plan. Determine whether the plan's providers are in a location convenient to you and whether transportation is available at all hours to get you to them.

Also, carefully consider the advantages and disadvantages of plan membership if you travel a lot or live part of the year in another State. Plans must provide coverage for a fixed period of time when you travel.

Another factor to keep in mind is that if you enroll in a plan and later move out of the plan's service area, you will have to disenroll and either return to regular fee-for-service Medicare or enroll in a plan that serves your new location.

If I Enroll, Where Do I Go For Care?
Before enrolling in a managed care plan, find out whether the plan has a "risk" or a "cost" contract with Medicare. There is an important difference.

Risk Plans: These plans have "lock-in" requirements. This means that you generally must receive all covered care through the plan or through referrals by the plan.

With few exceptions, if you go outside the plan for services, neither the plan nor Medicare will pay for those services. You will have to pay the entire bill out of your own pocket.

The only exceptions recognized by all Medicare-contracting plans are for emergency services, which you may receive anywhere in the United States, and urgently needed care, which you may receive while temporarily away from the plan's service area.

If you receive emergency or urgently needed care, the doctor or hospital that provides the service will either bill you or your plan. If the bill is given to you, present it to the plan yourself and keep a copy for your records. If possible, let the plan know whenever you are in an emergency situation.

In addition to paying for emergency and urgently needed care received outside the plan, a few risk plans offer what is called a "point-of-service" (POS) option.

Under the POS option, the plan permits you to receive certain services outside the plan's provider network and the plan will pay a percentage of the charges. In return for this flexibility expect to pay at least 20 percent of the bill.

Cost Plans:
These plans do not have lock-in requirements. If you enroll in a cost plan, you can either go to health care providers affiliated with the plan and pay only the applicable co-payments, or you can go to providers outside the plan.

If you go to providers outside the plan, the plan probably will not pay but Medicare will. Medicare will pay its share of the approved charges.

You will be responsible for Medicare's coinsurance and deductibles and other permissible charges, just as if you were receiving care under the fee-for-service system.

Because cost plans do not have a lock-in requirement, they may be a good choice for you if you travel frequently or live outside the plan's service area part of the year.

Plan Hospital And Medical Benefits
While the package of benefits can vary from plan to plan, all plans must provide all of the Medicare benefits available in their respective services areas.

Plans may also offer extra benefits not otherwise covered by fee-for-service Medicare. The extra benefits can include, for example, physical exams, scheduled inoculations and other preventive care, prescription drugs, dental care, hearing aids and eyeglasses, as well as coverage for overseas travel.

Plans with risk contracts either provide the extra benefits at no additional cost or require you to purchase them as a condition of enrolling in the plan. Any additional benefits offered by cost plans may cost members more.

Do I Select My Own Doctor?
Most managed care plans require you to select a primary care doctor from those affiliated with the plan when you first enroll. If you do not make a selection, one will be assigned to you.

Primary care doctors manage their patients' medical and hospital care. If for any reason you want to change your primary care doctor, the plan generally will let you do so as long as you select another one of the plan's primary care doctors.

What About Specialists and Hospital Care?
Managed care plans have doctors available in all specialties of medicine. However, to see a specialist, you must be referred by your primary care physician if the plan is to pay for the specialist's services. Your primary care physician will help choose the specialist for you.

Just as a plan arranges in advance with specific doctors to care for members, it generally has contracts with specific hospitals, skilled nursing facilities, home health care agencies and other health care providers to serve its members. Some of the larger plans, however, have their own hospitals and other health care facilities.

By coordinating primary, specialty, inpatient, and outpatient treatment, plans can deliver appropriate care while minimizing duplicative and unwarranted services.

How Can I Appeal a Payment Decision Made by an HMO?
Managed care plans that contract with Medicare have a system that you can use to appeal payment decisions. You can file an appeal if your plan:

• Refuses to pay for Medicare-covered services;
  
• Refuses to provide services you request; or
  
• Decides not to pay for the care you received from doctors or hospitals who are not part of the plan because the plan determined that the care was not for emergency or out-of-area urgent care.

If you need more information or help, call any Social Security Administration office, your health plan, or your State insurance counseling office.

What are the Advantages of Joining a Managed Care Plan?
People join managed care plans for several reasons. Some of the most frequently mentioned include:

• It can be easier to get all services through one source (for example, doctors' services, hospital care, laboratory tests, X-rays, etc.)

• Quality of care may be enhanced because of the coordination of services.

• It's easier to budget medical costs because you know the amount of any premiums in advance, and the total of other out-of-pocket expenses is likely to be less than under the fee-for-service system.

• You generally pay only a nominal copayment when you use a service. Some plans do not charge copayments for certain specified services.

• In many cases, benefits beyond those covered by Medicare are available at either no additional charge or a nominal charge.

• You will not need Medigap insurance to supplement your Medicare coverage because the plan provides you with all or most of the same benefits at no additional cost.

• Paperwork is virtually eliminated.

• Unlike Medigap insurers who in some cases can refuse to sell you a policy if you have a health problem, plans generally must accept all Medicare applicants.

• You may not be free to go to any physician or hospital you choose. Except when you need emergency or unforeseen out-of-area urgent care services, you generally must use the plans providers or else the plan will not pay.

• You may need to have the prior approval of your primary physician to see a specialist, have elective surgery, or obtain equipment or other medical services.

• It can take up to 30 days to disenroll, and you must continue to use the HMO providers until you are disenrolled.

Give the written statement either to the plan's administrative office or to your local Social Security Administration or, if appropriate, your Railroad Retirement Board office. Your coverage under the fee-for-service system will begin the first day of the following month.

If you want to change from one managed care plan to another, you may do so by simply enrolling in the other plan as long as it has a Medicare contract. You are automatically disenrolled from the first plan.

Do I Need Medigap Insurance if I Join a Managed Care Plan?
Medigap insurance is another issue that you should consider if you are thinking about enrolling in a plan, or if you are already in a plan and are thinking about disenrolling.

If you have a Medigap policy and decide to enroll in a plan, you may either keep the policy or, if after deciding you like the plan, you may cancel it. You will generally not need a Medigap policy if you enroll in a Medicare-contracting plan.

A Medigap policy could be of value to you if you left a plan and returned to fee-for-service Medicare. If you previously had a Medigap policy but dropped it while in the plan or never had one before you joined the plan, you might not be able to buy the policy of your choice, especially if you have a health problem.

Before you give up your Medigap policy, or let a Medigap open enrollment period expire, you should consider discussing your particular circumstances with your State insurance counseling office. The services are free.

The counseling offices also have free copies of the Guide to Health Insurance for People With Medicare.

Medicare SELECT
Medicare SELECT is another health insurance option that you may want to consider as you seek to get the most health insurance for your dollar. While Medicare SELECT is not the same as managed care, it does incorporate some of the features of managed care and is sometimes offered by HMOs as well as various insurance companies.

Medicare SELECT is the same as standard Medigap insurance in nearly all respects. If you buy a Medicare SELECT policy, you are buying one of the standard Medigap plans approved for sale in your State.

The only difference between Medicare SELECT and standard Medigap insurance is that each SELECT insurer has specific hospitals, and in some cases specific doctors, that you must use, except in an emergency, in order to be eligible for full benefits. Medicare SELECT policies generally have lower premiums in comparison to other Medigap policies because of this requirement.

When you go to the insurer's "preferred providers," Medicare pays its share of the approved charges and the insurer is responsible for the full supplemental benefits provided for in the policy.

In general, Medicare SELECT policies are not required to pay any benefits if you do not use a preferred provider for non-emergency services. Medicare, however, will still pay its share of approved charges regardless of the provider you choose.

Congress designed Medicare SELECT as an experimental program and initially approved its availability in 15 states. Last year Congress expanded the program to include all states and extended it for another three years. Even if Congress decides not to continue Medicare SELECT, insurers will be required to honor all existing Medicare SELECT policies.

If you have a Medicare SELECT policy and the program is terminated in 1998, you will be able to either:

1. Keep the SELECT policy with no changes in benefits or;
2. Purchase another Medigap policy offered by the insurer, if the insurer issues Medigap insurance other than Medicare SELECT. To the extent possible, the replacement policy would have to provide similar benefits. You could not be denied coverage because of poor health.

While authorized for sale in every State, Medicare SELECT may not yet have been approved for sale in your State. You can find out whether it is available to you by calling your State insurance department or State insurance counseling office.

For more information about Medicare, you may obtain a copy of Your Medicare Handbook from any Social Security Administration office or by calling 1-800-638-6833.

Health Insurance Information & Counseling
Every State, plus Puerto Rico, the Virgin Islands, and the District of Columbia, has a health insurance counseling program that can give you free information and assistance on Medicare, Medicaid, Medigap, long term care and other health insurance benefits. You can call your state counseling office and ask for names of HMOs in your area. Phone numbers are listed below (the 800 numbers work only within the state). If you have trouble reaching your counseling office, call the Medicare hotline at 1-800-638-6833.    

HCFA Publication No. HCFA 02195
Revised April 1996