A Medicare replacement plan is a type of Medicare health plan offered by a private company that contracts with Medicare to provide the Medicare Beneficary with Part A and Part B benefits. Medicare replacement plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. If a Medicare beneficiary enrolls in a Medicare replacement plan, Medicare services are covered through the plan and aren’t paid for under Original Medicare. As an incentive to entice Medicare beneficiaries most Medicare replacement plans offer prescription drug coverage, not normally covered by original Medicare.
Medicare replacement plans are also know as (aka) Medicare Advantage Plan, Medicare Plus Choice, and Medicare Part C.
To try and stave off the confusion some Medicare beneficaries had when they sign over their Medicare to a Medicare Replacement plan. Some Medicare Replacement plans took away or made special Medicare card holders stating “this patient does not have Medicare”. But the Health Care Financing Administration (HCFA) now CMS, make quick work to stop this practice.