Imagine you have two kids, one named "Fee", and the other named "Value". One weekend, you tell Fee and Value to each build identical treehouses, one on each of the two trees in your backyard. Your kids ask how you'll pay for them and you tell Fee that he can bring you receipts for materials and tools he purchases from the nearby hardware store and, if you think they're reasonable, you'll pay him back. Value get reimbursed differently. You give him $50 and tell him to spend it however he wants as long as he builds the treehouse. If he spends less than $50, he can keep the difference.
This example roughly illustrates the difference between fee-based and value based plans in health care. In the former, providers (such as doctors and hospitals) are reimbursed by Medicare for each service they perform. Medicare actually has a list of how much they'll reimburse for each medical procedure that could possibly be administered to you. This is how Original Medicare and Medigap coverage work.
Medicare Advantage (MA) plans are value-based. The government gives MA carriers a fixed amount of money per person they insure. This is called a capitation fee, after the word "capita", referring to "per head". The plans can spend this money however they want as long as their members have quality health outcomes. One way MA plans do this is by taking more control of what services you can use and when. For example, unlike Medigap plans or Original Medicare, MA plans require you to see in-network doctors rather than any doctor you like. Many also require your primary physician to refer you to a specialist. You can't go straight to one.
The value based nature of Medicare Advantage plans allows some of them to be zero premium. Some of them even pay part of your Part B premium. This can be appealing to folks looking to save money today, but remember that insurance is all about paying less today to decrease the chances of paying a lot more tomorrow.
Does Your Medicare Plan Cover B12 Shots?
Aug 15, 2022
Medigap Plan N vs. Plan G — Which One Fits You in 2025?
Jul 14, 2025
Medicare Guaranteed Issue Rights by State
Feb 10, 2023
Does Medicare Cover Hypnotherapy?
Nov 22, 2022
Does Medicare Cover the Urolift Procedure?
Dec 6, 2022
Do You Need Books on Medicare?
Apr 6, 2023
Everything About Your Medicare Card + Medicare Number
May 12, 2022
Does Medicare Cover Cartiva Implants?
Nov 29, 2022
Is Gainswave Covered by Medicare?
Dec 6, 2022
Does Medicare Cover Bladder Sling Surgery?
Jan 11, 2023
14 Best Ways for Seniors to Stay Active in Seattle
Mar 10, 2023
Does Medicare Cover Linx Surgery?
Dec 6, 2022
Does Medicare Cover Breast Implant Removal?
Jan 5, 2023
How Do Medigap Premiums Vary?
Apr 12, 2023
Does Medicare Cover Scleral Lenses?
Dec 5, 2022
Medicare Advantage Plans for Disabled People Under 65
Mar 24, 2023
Does Medicare Cover Orthodontic Care?
Nov 18, 2022
What's the Difference Between HMO and PPO Plans?
Dec 1, 2022
10 Top Medicare Supplement (Medigap) Companies for 2025
13 Best Ways for Seniors to Stay Active in Columbus
13 Best Ways for Seniors to Stay Active in Indianapolis
13 Best Ways for Seniors to Stay Active in Jacksonville
14 Best Ways for Seniors to Stay Active in Nashville
14 Best Ways for Seniors to Stay Active in Washington, D.C.
14 Best Ways to Stay Active in Charlotte
2024 Cost of Living Adjustment
Building the Future of Senior Healthcare
Can I Have Two Primary Care Physicians?
Can I switch From Medicare Advantage to Medigap?
Denied Coverage? What to Do When Your Carrier Says No
Do All Hospitals Accept Medicare Advantage Plans?
Do Medicare Supplement Plans Cover Dental and Vision?
Does Medicare Cover a Spinal Cord Stimulator?
Does Medicare Cover Abortion Services?
Does Medicare Cover Boniva?
Does Medicare Cover Cataract Surgery?
Does Medicare Cover Chiropractic Visits?
Does Medicare Cover Compounded Medications?
Does Medicare cover Deviated Septum Surgery?
Does Medicare Cover Flu Shots?
Does Medicare Cover Fosamax?
Does Medicare Cover Hearing Aids?
Does Medicare Cover Hepatitis C Treatment?
Does Medicare Cover Home Heart Monitors?
Does Medicare Cover Ilumya?
Does Medicare Cover Inspire for Sleep Apnea?
Does Medicare Cover Light Therapy for Psoriasis?
Does Medicare Cover Lipoma Removal?
Does Medicare Cover Mental Health?
Does Medicare Cover Nuedexta?
Does Medicare Cover Ofev?
Does Medicare Cover Ozempic?
Does Medicare Cover Robotic Surgery?
Does Medicare Cover Service Animals?
Does Medicare Cover Shock Wave Therapy for Plantar Fasciitis?
Does Medicare Cover SIBO Testing?
Does Medicare Cover Stair Lifts?
Does Medicare Cover the WATCHMAN Procedure?
Does Retiring at Age 62 Make Me Eligible for Medicare?
Fair Square Bulletin: We're Revolutionizing Medicare
Finding the Best Vision Plans for Seniors
How Are Medicare Star Ratings Determined?
How Do I Sign up for Medicare? A Simple How-To Guide For You
How Does the End of the COVID-19 Public Health Emergency Affect Your Medicare?
How Medicare Costs Can Pile Up
How Much Does Open Heart Surgery Cost with Medicare?
How Much Does Rexulti Cost with Medicare?
How Much Does Trelegy Cost with Medicare?
How to Apply for Medicare?
How to Become a Medicare Agent
Is Botox Covered by Medicare?
Is Emsella Covered by Medicare?
Is HIFU Covered by Medicare?
Is Vitrectomy Surgery Covered by Medicare?
Medicare & Ozempic
Medicare 101
Medicare Deductibles Resetting in 2025
Medicare Savings Programs in Kansas
Medigap vs. Medicare Advantage
Moving? Here’s What Happens to Your Medicare Coverage
The Fair Square Bulletin: October 2023
Top 10 Physical Therapy Clinics in San Diego
Welcome to Fair Square's First Newsletter
What Is the Medicare Birthday Rule in Nevada?
What is the Medicare ICEP?
What to Do When Your Doctor Leaves Your Network
What You Need to Know About Creditable Coverage
When to Choose Medicare Advantage over Medicare Supplement
Will Medicare Cover Dental Implants?
Will Medicare Cover it?
Get the Fair Square Bulletin
Medicare savings tips, helpful guides, and more.
Virgil Insurance Agency, LLC (DBA Fair Square Medicare) and www.fairsquaremedicare.com are privately owned and operated by Help Button Inc. Medicare supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program. This is a solicitation of insurance. A licensed agent/producer may contact you. Medicare Supplement insurance is available to those age 65 and older enrolled in Medicare Parts A and B and, in some states, to those under age 65 eligible for Medicare due to disability or End-Stage Renal disease. Virgil Insurance Agency is a licensed and certified representative of Medicare Advantage HMO, HMO SNP, PPO, PPO SNP and PFFS organizations and stand-alone PDP prescription drug plans. Each of the organizations we represent has a Medicare contract. Enrollment in any plan depends on contract renewal. The plans we represent do not discriminate on the basis of race, color, national origin, age, disability, or sex. Plan availability varies by region and state. For a complete list of available plans please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov. © 2025 Help Button Inc
We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.
MULTIPLAN_FairSquareMedicare_01062022_M