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What is a Medicare Advantage Private Fee for Service (PFFS) plan?
A Medicare Advantage Private Fee for Service (PFFS) plan is a Medicare health plan sponsored by private insurance companies. With a PFFS plan, Medicare pays a set amount of money every month to the insurance company to provide health care coverage to Medicare beneficiaries on a fee-for-service arrangement. The insurance company, rather than the Medicare Program, decides how much you must pay for the services you receive.
Recent changes that affect PFFS plans
At one time, PFFS plans were the fastest growing segment of the Medicare Advantage market. These plans were very popular because they were not tied to a specific doctor or hospital network. That meant you could go to any doctor or hospital in the United States, as long as the provider was willing to accept payment from your insurance company.
In 2011, changes in Medicare law required PFFS plans to have networks of providers in most counties. As a result of this new requirement, many companies withdrew their PFFS plans from the Medicare market. Nationwide, the number of PFFS plans dropped from 435 to 239 in 2011. Enrollment in PFFS plans continues to decline: In 2012, only about 500,000 beneficiaries were enrolled in PFFS plans, compared to about 1.5 million in 2010.
How will I know if my plan is canceled?
If you are currently enrolled in a Medicare plan sponsored by a private insurance carrier, there is always a chance that your insurance carrier may cancel the plan for the coming year. If this happens, you will receive information in the mail from your carrier. This information will include instructions regarding your options.
What are my options if my plan is canceled?
You are not required to stay with the same insurance company if your PFFS plan is canceled. You may select another Medicare Advantage Plan offered by the same insurance company or pick a new plan from a different insurance company in your area.
Generally, you will be automatically returned to Original Medicare if you don't choose to join another Medicare Advantage Plan.
Which plan provides the most similar benefits to my Private Fee for Service Plan?
In general, Original Medicare (Part A and Part B) or a Medicare Advantage Preferred Provider Organization (PPO) plan provides the most similar benefits to a PFFS plan. If you choose Original Medicare, you will also need to sign up separately for a Medicare prescription drug plan (Part D). You may also want to sign up for a Medicare Supplemental plan (Medigap) to help pay for services that Original Medicare doesn't cover.
If you choose a Medicare Advantage PPO plan, you probably will not have to sign up for a separate prescription drug plan, as most Medicare PPO plans include prescription drug coverage.
When do I have to enroll in a new plan?
If your Medicare PFFS plan is being canceled for the coming year, you can enroll in a different Medicare Advantage Plan during the Annual Open Enrollment Period, which runs from October 15 through December 7. If you don't enroll in another plan during this time, you will be automatically enrolled in Original Medicare, with coverage beginning on January 1.