How Medicare Advantage Plans Work
Medicare Advantage plans are also known as Part C plans or MA plans (short for Medicare Advantage). They are an alternative to Original Medicare because they bundle all of the Medicare parts into one package.
Private insurance companies provide Medicare-approved Medicare Advantage plans. By contrast, the federal government offers Original Medicare, and insurance companies sell Medicare supplements (Medigap) programs.
When you join a Medicare Advantage plan, you still have Medicare insurance. Medicare Part A (hospitalization), Part B (medical insurance), and usually Part D (prescription drugs) come together as an all-inclusive program.
If you have Original Medicare, you have separate policies for Medicare Part A, B, D, and whichever supplement you choose. Medicare Advantage less uncomplicated. It gives you one plan and one ID card for all of that coverage.
What Medicare Advantage Plans Cover
Medicare Advantage plans cover everything Original Medicare covers.
Medicare Advantage plans include hospitalization, home health care, hospice service, skilled nursing care, doctor's appointments, doctor's treatments and services like surgeries, ambulance services, annual check-ups, preventative medicine, some lab tests, screenings, durable medical equipment, mental health treatment and more.
Also, some Medicare Advantage plans provide additional coverage. Some of the extras include dental, vision, and hearing services, and health and fitness programs like SilverSneakers.
Medicare Advantage Drug Coverage
Typically, Medicare Advantage plans provide Medicare Part D (prescription drug coverage). In most cases, coverage is standard with Medicare Advantage HMO or PPO plans.
If your plan does not have a drug plan, you can join a separate one.
However, if you have a Medicare Advantage HMO or PPO plan and join a separate Medicare prescription drug plan, Medicare will remove you from the Advantage plan and return you to Original Medicare.
Does Medicare Advantage Work with Medigap Policies?
No. You can either have a Medicare Advantage plan or a Medigap policy, but not both.
If you enroll in both, the government will remove you from Medicare Advantage and put you on Original Medicare.
How is Medicare Advantage Different from Original Medicare?
With Original Medicare, the government processes and pays the claims. Private insurance companies offer Medicare Advantage plans that you buy on a Medicare marketplace like AARDY.
Instead of paying premiums to the government, Medicare pays the insurance company a fixed amount to insure you. The company must adhere to rules set by Medicare.
Medicare Advantage plans can charge different amounts for out-of-pocket costs. They may cap the out-of-pocket expenses at a few thousand. On the other hand, Original Medicare has no out-of-pocket limit, but some Medicare supplement plans might.
Medicare Advantage plans can also have different rules than Original Medicare if you want to see a specialist. With Original Medicare, you can just set an appointment and go. With Medicare Advantage, you may need a referral from your primary care doctor.
Also, they can dictate if you have to use doctors, facilities, or suppliers that are in-network. Original Medicare does not use networks; you can see anyone in the US that accepts Medicare.
How Medicare Advantage Plans Are Paid
You pay a monthly premium to the Medicare Advantage insurance company instead of paying the federal government. In some cases, Medicare Advantage plans have a $0 premium.
Most plans require that you pay copays, deductibles, and coinsurance. Fortunately, you typically find they limit the out-of-pocket expenses.
How Much Does Medicare Advantage Cost?
The cost of Medicare Advantage plans depends on:
- Your state of residence (determines which plans are available to you)
- The level of coverage you choose
- The type of Medicare Advantage plan (see below)
Types of Medicare Advantage Plans
There are four different types of Medicare Advantage plans. The differences relate to where you seek medical treatment.
HMO (Health Maintenance Organization)
If you have a Medicare Advantage plan HMO, you must receive care within the insurance network unless you require emergency care, out-of-area urgent treatment, or out-of-area dialysis. Some plans let you go out-of-network for limited services, but it usually costs more.
PPO (Preferred Provider Organization)
With a Medicare Advantage plan PPO, you have a bit more flexibility than with an HMO. You pay less if you use doctors in the network. If you seek treatment out-of-network, it will be covered, but you will pay more.
HMOs and PPOs are the most common Medicare Advantage programs.
PFFS (Private Fee-for-Service)
PFFS plans are similar to PPO plans, but you do not have to stay in the network. PFFS lets you see any Medicare-approved doctor, provider, or hospital that accepts the plan. However, your costs will be lower staying in the network.
SNP (Special Needs Plan)
These plans limit membership to people with specific diseases or conditions, like people who live in institutions or have ESRD, AIDS, HIV, CHF, or dementia. Typically, members will stay in-network except for emergencies.
Medicare Advantage Plan Cost
Your out-of-pocket costs for a Medicare Advantage plan can vary based on which plan you choose.
- Premium - Some plans pay all or part of your Medicare Part B premium. You may pay a premium or have a $0 monthly premium.
- Copays - The amount you pay at the time service for each doctor visit.
- Deductible – Whether the plan has a deductible and how much.
- Coinsurance - If you must pay coinsurance (e.g., 20% of costs), and how much.
- Service providers – If you seek treatment from a facility that your plan, or whether you are out-of-network
- Annual limit – Some plans have an annual maximum out-of-pocket limit. By contrast, Medicare Part B charges a 20% coinsurance with no maximum.
How to Get a Medicare Advantage Plan
Since insurance companies sell Medicare Advantage plans, you would buy it from the insurer or a Medicare Insurance Marketplace like AARDY.com.
Since there are many plans to choose from, it helps to speak with a licensed agent who can help you determine which plan best fits your needs.
Can I Switch to a Medicare Advantage Plan?
Yes. You can move from a Medigap/Original Medicare plan to a Medicare Advantage plan between October 15 through December 7 each year.
This open enrollment period is the most common time to make changes to your Medicare coverage.
Where Can I Buy a Medicare Supplement?
AARDY is the nation's fastest Medicare insurance marketplace. You can compare Medicare supplements, and Medicare Advantage plans to find the one that best fits your needs.