Final answer:
Patients under Medicare private fee-for-service plans can receive services from any licensed healthcare provider who accepts the plan's payment terms, offering greater flexibility compared to HMOs.
Step-by-step explanation:
Under a Medicare private fee-for-service plan, patients receive services from any licensed healthcare provider who accepts the plan's payment terms and conditions. This means that patients have the flexibility to choose providers outside of a specific network, as long as the provider agrees to the terms of the plan. This model contrasts with health maintenance organizations (HMOs), where patients typically receive services from providers within a specific network and providers are reimbursed based on the number of patients they serve.
The concept of adverse selection is pertinent to all types of health insurance markets, including Medicare fee-for-service plans. Adverse selection occurs when those with higher health risks are more likely to enroll in health insurance plans, potentially raising costs.