Insurance—Those With and Those Without - Medicare C

Medicare C, also known as "Medicare+Choice," became available to Medicare recipients on January 1, 1999. Medicare C came about as a result of the Balanced Budget Act of 1997 and was designed to supplement Medicare Parts A and B. Medicare C offers beneficiaries a wider variety of health plan options than previously available. These options include traditional (fee-for-service) Medicare, Medicare health maintenance organizations (HMOs), preferred provider organizations (PPOs), provider-sponsored organizations (PSOs), and medical savings accounts (MSAs).

Medicare provider-sponsored organizations are organized and operate the same way that HMOs do. They are administered, however, by providers—physicians and hospitals. Medicare preferred provider organizations are similar to HMOs but permit patients to see providers outside the network and do not require their members to choose a network primary care physician to coordinate their care. Patients in PPOs may seek care from any physician associated with the plan. Medicare private fee-for-service plans are more like traditional Medicare, except patients may pay more out-of-pocket expenses. Medical savings accounts (MSAs) have two parts—an insurance policy and a savings account. Medicare will pay the insurance premium and deposit a fixed amount in an MSA each year to pay for an individual's health care.