Medicare Advantage Plans (Part C)

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Contributing expert: Kelly Blackwell, Certified Senior Advisor®
Updated: January 15, 2022

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Kelly Blackwell
Certified Senior Advisor (CSA)®
Kelly Blackwell
Certified Senior Advisor (CSA)®

Kelly Blackwell is a Certified Senior Advisor (CSA)®. She has been a healthcare professional for over 30 years, with experience working as a bedside nurse and as a Clinical Manager. She has a passion for educating, assisting and advising seniors throughout the healthcare process.

Medicare Advantage Plans (also known as MA or Part C) are the alternative way to get your Original Medicare Part A and Part B coverage. MA Plans are administered by Medicare-approved private insurance companies who are required to abide by Medicare’s rules.

MA Plans typically offer additional benefits beyond what Original Medicare does, such as prescription drug coverage, dental, hearing, and vision services, and more. All services are bundled together in one plan. There are different types of Medicare Advantage Plans. Read below to understand which type of plan may be the best fit for you.

Who Should Get a Medicare Advantage Plan?

A Medicare Advantage Plan may be a good choice for you if you:

  • Prefer a Medicare insurance plan that bundles together all medical, prescription drug, and other benefits, like dental and vision coverage.
  • Are willing to receive your benefits from a network of providers in order to keep your healthcare costs as low as possible.
  • Don’t want to risk paying uncapped out of pocket costs of Original Medicare or have to purchase a Medigap policy.

What is a Medicare Advantage Plan?

Plan structure An alternative way to get your Medicare benefits, offered by private insurance companies who contract with a network of providers to keep costs low. An all-in-one plan that bundles together your hospital and medical services and prescription drugs, plus extras that Medicare doesn’t cover.
Benefits available All Original Medicare Part A and B benefits, prescription drugs and coverage for extras, such as vision, dental, hearing, and fitness club memberships.
Cost sharing Plans may have a monthly premium and deductible in addition to your monthly Part B premium. Copays and coinsurance apply for each service received until you reach your out of pocket max. Your costs are lowest if you stay in network.

How Medicare Advantage Plans work

Medicare Advantage Plans, also known as MA or Part C, take the place of Original Medicare and provide coverage for the same benefits as Part A and Part B. Most plans also provide prescription drug coverage to take the place of Part D.

MA Plans are regulated by the federal government, but are administered by Medicare-approved private insurance companies who set their own rules on how you receive your benefits. Cost structure and sharing is different, and all MA Plans have an out of pocket max to limit how much you pay for Medicare-covered (Parts A and B) services. There are a variety of types of Medicare Advantage Plans:

  • Health Maintenance Organization (HMO) – Services provided by a network of providers. Primary Care Physician (PCP) and referrals to specialists required. May include drug coverage, if not, you cannot purchase a stand alone drug plan.
  • Preferred Provider Organization (PPO) – Lowest cost services provided by a network of providers, but you can choose to receive care out of network. PCP and referrals are not required. May include drug coverage, if not, you cannot purchase a stand alone drug plan.
  • Private Fee-for-Service (PFFS) – You choose Medicare-approved providers, and your plan pays as long as the providers agree to treat you. May include drug coverage, if not, you can purchase a stand alone drug plan.
  • Medical Savings Account (MSA) – Combination of a medical savings account (funded by Medicare) and high-deductible MA Plan. Your MSA pays for Medicare-covered services, then you pay out of pocket until you reach your deductible. Does not include drug coverage, so you can purchase a standalone plan.
  • Special Needs Plan (SNP) – Tailored to fit the needs of certain populations, such as those with chronic conditions, those who require long-term care in a facility, and those who are dually eligible for Medicare and Medicaid due to limited resources. Specialized care, lowest costs, care coordination, and drug coverage included.

Benefits available with a Medicare Advantage Plan

Medicare Advantage Plans are required to provide the same benefits as Original Medicare does. These include:

  • Part A – inpatient hospitalization and skilled nursing facility care and some home care. Hospice care, a Part A benefit, is still primarily provided by Original Medicare, not Medicare Advantage Plans.
  • Part B – medically necessary outpatient care, supplies, and services, such as doctor’s visits, lab tests, and durable medical equipment

Medicare Advantage Plans also provide more benefits. These typically include:

  • Part D – Prescription drug coverage per your plan’s formulary
  • Routine vision exams
  • Routine hearing exams
  • Routine dental exams
  • Fitness benefits
Advantages of a Medicare Advantage Plan Disadvantages of a Medicare Advantage Plan
  • Services bundled in one plan
  • Costs savings if you stay in network
  • Most people have access to at least one zero premium plan with drug coverage
  • Not all plans available in all areas
  • Network restrictions limit choice of providers
  • May not be able to buy a Medigap policy if you return to Original Medicare

Compare your Medicare options

See how Medicare Advantage Plan types compare with each other and with Original Medicare.

Plan type Costs* Part A coverage Part B coverage Part D coverage Out-of-state care**
Original Medicare Part B premium Yes Yes No Yes
Medicare Advantage HMO Part B premium plus plan premium Yes Yes Usually Emergency only
Medicare Advantage PPO Part B premium plus plan premium Yes Yes Usually Emergency, plus other care if in your plan’s network, or you pay more for out of network
Medicare Advantage PFFS Part B premium plus plan premium Yes Yes Sometimes Emergency, plus other care if contracted with your plan and agrees to treat you.
Medicare Advantage MSA Part B premium plus high deductible Yes Yes No Emergency plus other care but you pay higher cost for out of network if your plan has a network
Medicare Advantage SNP Part B premium Yes Yes Yes Emergency and out-of-area dialysis plus other care if in your plan’s network

*All plans include deductibles, copays and/or coinsurance for services received. Medicare Advantage Plans have an out-of-pocket max that applies to Medicare-covered benefits. There is no cap on what you spend for Original Medicare services, but if you purchase a Medigap plan (which has a monthly premium), it will cover most of Original Medicare’s cost sharing requirements.
**Check with your plan for out-of-state coverage and service area.

Who is Eligible for a Medicare Advantage Plan?

Generally, if you are eligible for Medicare, you are eligible for a Medicare Advantage Plan. You must be enrolled in both Parts A and B and can only choose from plans that are available in your area. You cannot have a Medigap policy and a Medicare Advantage Plan at the same time.

You cannot be enrolled in hospice. If you need hospice care, you will return to Original Medicare under the Hospice Benefit.

Additional specific eligibility requirements for each type of MA Plan are:

  • HMO – You must live or work in the plan’s service area.
  • PPO – You must choose from a plan that is available in your area, but may have access to a regional plan and can receive services that are out of network for a higher cost.
  • PFFS – You must choose from a plan that is available in your area, but can see providers anywhere in the U.S. as long as they agree to treat you.
  • MSA – You cannot join a MSA if you:
    • Are eligible for Medicaid
    • Have health coverage that would cover your intended Medicare Advantage MSA plan’s deductible. This includes benefits from a union or employer retirement plan
    • Are a retired employee of the federal government receiving benefits from the Federal Employee Health Benefits Program
    • Live outside of the United States more than 183 days per year
    • Receive TRICARE or Department of Veterans’ Affairs benefits
  • SNP – You must meet eligibility requirements within one of these categories:
    • Chronic Condition (C-SNP) You must have at least one severe debilitating condition, such as chronic heart disease, autoimmune disorder, end-stage liver or kidney disease.
    • Institutional (I-SNP) You live in an institution (like a nursing home) or you require nursing care at home.
    • Dual eligible (D-SNP) You have Medicare and Medicaid.

How Much Does a Medicare Advantage Plan Cost?

See how costs compare for these 2022 HMO and PPO plans in Chicago, IL

Plan name Monthly premium Deductible Copay Coinsurance Out-of-pocket max
Aetna Medicare Value PPO $ 0 $ 0 medical, $ 0 drug deductible PCP: $ 0

Specialist: $ 35

50% out of network $ 3,950 in network $ 8,250 in and out of network combined
Humana Choice H5216-251 PPO $ 0 $ 0 medical, $ 200 drug deductible PCP: $ 0

Specialist: $ 45

40% out of network $ 5,500 in network $ 10,000 in and out of network combined
Cigna Preferred Medicare HMO $ 0 $ 0 medical, $ 0 drug deductible PCP: $ 0

Specialist: $ 25

% out of network $ 3,150 in network

How Do I Enroll in a Medicare Advantage Plan?

To enroll in a Medicare Advantage Plan, you first need to be enrolled in Original Medicare Part A and Part B. After you’re enrolled in Original Medicare, you can enroll in a MA plan during your Initial Enrollment Period or during other enrollment periods throughout the year:

  • Initial Enrollment Period (IEP): This seven-month period starts three months before the month of your 65th birthday, the month of your birthday, and ends three months after your birthday month.
  • Initial Coverage Enrollment Period (ICEP): This is the enrollment period for those who want to enroll in a Medicare Advantage Plan and often occurs at the same time as the IEP for Original Medicare.
  • Annual Enrollment Period: This period runs from October 15th through December 7th.
  • Medicare Advantage Open Enrollment: Medicare beneficiaries who already enrolled in a Medicare Advantage Plan can switch plans between January 1st and March 31st.
  • Special Enrollment Period (SEP): You may qualify for a special enrollment period if your circumstances change; for instance, if you move or lose your current coverage.

There is one notable exception for Special Needs Plans (SNPs). If you qualify for an SNP, you can enroll at any time.

Use the Medicare Plan finder to research available MA plans in your area. When you’ve chosen a plan, go to the insurer’s website to check for online enrollment options or contact the insurance company by phone or email to request a paper enrollment form. You can also enroll by calling Medicare at 1-800-633-4227.

To enroll, you need your Medicare number and the date your Parts A and B coverage began. Your Medicare card has this information.

Who Should Get a Medicare Advantage Plan?

You should consider a Medicare Advantage Plan if you want your healthcare and drug benefits bundled together in one plan, and if you don’t mind choosing to receive your benefits from a network of providers. You may also prefer cost-effective extra benefits that come with most MA Plans, but understand those costs don’t apply toward your out of pocket max. MA Plans typically have lower monthly premiums than Medigap plans do, so if you don’t need much healthcare, you can save on upfront costs. Understand the risk of not being able to purchase a Medigap plan if you decide to return to Original Medicare more than a year after having a Medicare Advantage Plan.

Consider the types of Medicare Advantage Plans that may be right for you:

  • HMO – least expensive, most restrictive, widely available
  • PPO – offers more choice of providers, referrals not necessary, widely available
  • PFFS – more choice, but you can only receive services from providers who agree to treat you
  • MSA – good choice if you can afford to pay the difference between the Medicare-funded portion and the plan’s high-deductible in case you need healthcare
  • SNP – excellent choice for targeted care if you qualify, but not available in all area

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