Which term best describes a plan that contracts with Medicare to provide all Part A and Part B benefits (and often includes drug coverage)?

• A. Medicare Advantage Plans
• B. HMOs
• C. ACOs
• D. Capitation

Answer: (A)

Medicare Advantage plans are private plans that contract with Medicare to provide all Part A and Part B benefits, and they often include prescription drug coverage as part of the package. These plans, also known as Part C, bundle the benefits you’d get from Original Medicare (A and B) into one plan offered by a private insurer approved by Medicare, and they can add extra benefits beyond Original Medicare. Medicare pays these plans a fixed amount per enrollee (capitation) to cover the care, and the plan may operate as an HMO, PPO, or other network arrangement, which is why you’ll see different structures under the same overarching idea.

Aco describes groups of providers coordinating care, not a single plan that provides all covered benefits. Capitation is the payment method used to fund these plans, not the plan type itself. HMOs are a type of plan structure that can exist within Medicare Advantage, but the term that best fits “a plan that contracts with Medicare to provide all Part A and Part B benefits (and often includes drug coverage)” is Medicare Advantage Plan.