What Are Medicare Advantage Plans?
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 is less uncomplicated. It gives you one plan and one ID card for all of that coverage.
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.
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.
Medicare Advantage plans may offer:
- Included prescription drug coverage
- $0 premium plan
- $0 deductible plan
- Extra benefits like vision, hearing and dental services
- Gym membership
Does Medicare Advantage Include Prescription Drug Coverage?
Most Medicare Advantage plans do. Check with your provider to find out if your policy covers prescriptions.
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.
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, so you can see anyone in the US that accepts Medicare.
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)
Your out-of-pocket costs for a Medicare Advantage plan can vary based on which plan you choose.
- Premium – You continue to pay your Part B premium. Your Medicare Advantage plan may have a low premium or $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 without a maximum.
Why Are Some Medicare Advantage Plans $0?
Medicare Advantage works differently from Original Medicare. With Medicare, you pay the government a premium for health insurance, and they process all of the claims.
With Medicare Advantage, you still pay your Medicare Part B premium. However, the government subsequently pays it to the private insurance company that sponsors your Medicare Advantage plan.
Typically, plans that include more benefits require an additional premium.
What Makes Medicare Advantage Different From Original Medicare?
Managing Your Policies
With Original Medicare, you have to enroll in and manage each Part individually. Medicare Advantage is an "all-in-one" solution.
You receive multiple ID cards for Original Medicare, but just one for a Medicare Advantage plan.
Original Medicare has a 20% coinsurance without a maximum out-of-pocket amount. That means after you've met your deductible, you would pay 20% of all additional expenses yourself. It could go on forever. There is no annual limit.
Medicare Advantage has yearly limits on your out-of-pocket expenses.
With Original Medicare, the government pays the claims. They allow a specific amount for any treatment, and that is all they will pay the provider.
Medicare Advantage plans may negotiate with medical providers for lower costs because they typically use networks.
Doctor and Hospital Choice
You can see any doctor in the US who accepts Medicare if you have Original Medicare. If you want to see a specialist, you do not need a referral ahead of time.
In most cases, you'll need to see the doctors in your Medicare Advantage network. You would also need a referral from your primary care physician to see a specialist.
The cost of Original Medicare is about the same as Medicare Advantage.
Advantage plans must follow the guidelines set by Medicare for coverage and prices.
Dental, Vision and Hearing Benefits
Insurance companies have the flexibility to add more services, like dental, vision, and hearing benefits.
With Original Medicare, you have the option to buy supplemental coverage, called Medigap policies.
Medicare Advantage does not permit supplemental coverage.
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. The only exceptions would be if 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.
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.
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 join a Medicare Advantage plan during:
- Initial Enrollment Period at your 65th birthday Initial Enrollment Period
- Annual Enrollment Period between October 15 through December 7 each year
- Medicare Advantage Open Enrollment Period from January 1 to March 31
- General Enrollment Period from January 1 through March 31 if you are late to sign up for Medicare
Medicare plans can change year-to-year. It's always a good idea to compare options during the Annual Enrollment Period. You can confirm whether your coverage will continue into the next year.
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.
How Do I Know What My Medicare Options Are?
AARDY is the nation's fastest Medicare insurance marketplace. You can compare your Medicare options to find the one that best fits your needs.