HEALTH POLICY TYPES · 6 MIN READ

Medicare Advantage, Medigap, and Coordination of Payers

Medicare Advantage (Part C) plans deliver Medicare benefits through private plans paid by CMS. The product shelf mirrors commercial managed care — HMO, HMO-POS, PPO, private fee-for-service (PFFS), and medical savings account (MSA) designs — and plans may bundle Part D drug coverage (MA-PD) or not (MA-only). Every MA plan must cap enrollee spending with an in-network maximum out-of-pocket (MOOP), with a higher combined limit for out-of-network use in PPO designs. Special Needs Plans (SNPs) restrict enrollment to defined populations: C-SNPs for beneficiaries with one or more severe or disabling chronic conditions on the CMS-approved list (verified by physician attestation), D-SNPs for dual-eligibles who hold both Medicare and Medicaid, and I-SNPs for institutionalized beneficiaries. CMS steers the MA market through quality and payment machinery. Plans bid against a county benchmark; bids below benchmark generate rebates that fund supplemental benefits. Payments are risk-adjusted by enrollee health status using diagnosis-driven risk scores. The Star Rating system (1 to 5 stars) scores each contract on clinical quality, member experience, and drug measures: 5-star plans earn a year-round special enrollment period, 4-plus-star plans earn quality bonus payments, and a contract rated below 3 stars for three consecutive years can be terminated by CMS and is flagged as low-performing. Beneficiaries who delay Part D creditable drug coverage face a late enrollment penalty, and special enrollment periods open on qualifying events such as moving or losing coverage. Original Medicare enrollees instead buy Medicare Supplement (Medigap) policies — federally standardized plan letters such as A, F, G, and N — to fill cost-sharing gaps, with guaranteed-issue rights protecting applicants in defined situations from underwriting. Finally, coordination rules decide who pays first: under the Medicare Secondary Payer working-aged rule, an employer group plan pays primary for a working 65-plus employee only when the employer has 20 or more employees; below 20, Medicare is primary and the group plan is secondary — and employers may not offer incentives to push workers onto Medicare. Parallel coordination rules govern veterans' programs and Indian Health Service care, and Medicaid remains the payer of last resort after spend-down.