Managed Care

• So-called "managed care" plans, in which health insurance companies contract with health care providers, include both Health Maintenance Organizations (HMO) and Preferred Provider Organizations (PPO). Under Medicare Advantage, these plans are very similar, though with HMOs, subscribers tend to pay less in deductibles or co-payments. Generally, PPO plans require higher payments to see a provider not in that network.
  
  

Fee-for-service

• Unlike managed care plans, private fee-for-service plans under Medicare Advantage allow patients to see any provider that agrees to the payment terms of that health plan. Also, patients are required to obtain a physician's referral to see a specialist, as with managed care plans.
  
  

Specialty Plans

• Medicare Advantage also offers Specialty Plans for smaller groups of people with specific health conditions, such as people in long-term care.
  
  

Benefits

• In general, all Medicare Advantage plans tend to have lower out-of-pocket costs than traditional Medicare. Also, many beneficiaries have lower prescription drug costs by enrolling in Medicare Advantage.