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 Original Medicare (Medicare Part A and B), such as prescription drug coverage (Part D), dental, hearing, and vision services, and more. All medical insurance coverage and related services are bundled together in one plan, thus eliminating the need for Medicare supplement insurance. There are different types of MA Plans to consider. Read below to understand which type of Medicare Advantage plans may offer the best fit for you.
Who Should Get a Medicare Advantage Plan?
Medicare Advantage plans include a variety of benefits. You should join Medicare Advantage Plan if:
- Prefer a Medicare insurance plan that bundles together all medical insurance coverage, prescription drug, and other benefits, like vision, hearing, dental and other coverage
- Are willing to receive your benefits from a network of health care providers to keep your health care 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 insurance 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, hearing, dental, 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
HMO: Health Maintenance Organization – Services provided by a network of health care providers. Primary Care Physician (PCP) and referrals to specialists required.
PPO: Preferred Provider Organization – 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.
PFFS: Private Fee-for-Service – You choose Medicare-approved providers, and your health plan pays as long as the providers agree to treat you.
MSA: Medical Savings Account – 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.
SNP: Special Needs Plan – Tailored to fit the needs of certain special needs populations, such as those with chronic conditions, those who require long-term care in a facility, and those who are dual eligible for Medicare and Medicaid due to limited resources. Special Needs Plans include specialized care, lowest costs, care coordination, and prescription drug coverage.
Medicare Advantage Plans, also known as MA or Part C, take the place of Original Medicare and provide coverage for the same benefits as Medicare Part A and Part B. There are many Medicare Advantage plans, most of which provide Medicare prescription drug coverage to take the place of Medicare Part D.
MA Plans are regulated by the federal government but are administered by Medicare-approved private companies who set their own rules on how you receive your benefits. Cost structure and sharing are different, and all MA Plans include an out-of-pocket max to limit how much you pay for Medicare-covered (Parts A and B) services.
There are a few types of Medicare Advantage (Part C) Plans:
- Health maintenance organization (HMO plans): Services provided by a network of providers. Primary care physician (PCP) and referrals to specialists required. May include prescription drug coverage. If not, you cannot purchase a stand-alone drug plan.
- Preferred provider organization (PPO plans): Lowest cost services provided by a network of health care providers, but you can choose to receive care out of network. PCP and referrals are not required. May include prescription drug coverage. If not, you cannot purchase a stand-alone drug plan.
- Private Fee-for-Service (PFFS): You choose Medicare-approved providers, and your health plan pays as long as the providers agree to treat you. May include drug coverage (Part D). If not, you can purchase a stand-alone drug plan.
- Medical savings account (MSA): Combines with a 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 stand-alone plan.
- Special needs plan (SNP): Tailored to fit the needs of certain special needs populations, such as those with chronic conditions, those who require long-term care in a facility, and those who are dually eligible for a Medicare health plan and Medicaid due to limited resources. Special needs plans offer specialized care, lowest costs, care coordination, and prescription drug coverage included.
Benefits available with a Medicare Advantage Plan
Medicare Advantage (Part C) Plans are required to provide the same benefits as an Original Medicare health plan does. These include:
- Part A: Inpatient hospitalization and skilled nursing facility care and some home care. Hospice care, a Medicare 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
You can also join Medicare Advantage Plans for extra benefits. These typically include:
- Part D – Prescription drug coverage per your health 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|
Compare your Medicare plan 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 health 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 (Part C) Plans have an out-of-pocket max that applies to Medicare-covered benefits. There is no cap on what you spend for Original Medicare plan 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 Medicare 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 Plans: You must live or work in the plan’s service area.
- PPO Plans: 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 health care providers anywhere in the United States as long as they agree to treat you.
- MSA: You cannot join an 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 (FEHB) Program
- Live outside of the United States more than 183 days per year
- Receive TRICARE or U.S. Department of Veterans’ Affairs benefits
- SNP: You must meet eligibility requirements within one of these categories:
- Chronic Condition SNP (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 SNP (I-SNP): You live in an institution like a nursing home or 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:
|Plan name||Monthly premium||Deductible||Copay||Coinsurance||Out-of-pocket max|
|Aetna Medicare Value PPO||$0||$0 medical, $0 drug deductible||PCP: $0
|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
|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
|% out of network||$3,150 in network|
How Do I Enroll in a Medicare Advantage Plan?
To join a Medicare Advantage Plan, you first need to be enrolled in Original Medicare Part A (hospital insurance) and Part B (medical services). After you’re enrolled in an Original Medicare plan, you can enroll in a MA Plan during your Initial Enrollment Period or other times 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 when 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 15 through December 7.
- Medicare Advantage Open Enrollment: Medicare beneficiaries who already enrolled in a Medicare Advantage Plan can switch plans between January 1 and March 31.
- Special Enrollment Period (SEP): You may qualify for a SEP if your circumstances change, such as if you move or lose your current Medicare 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 (800) 633-4227.
To enroll, you need your Medicare number and the date your Medicare 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 health care and Medicare prescription 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 health care, 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.
The types of Medicare Advantage Plans include:
- HMO Plans: Least expensive, most restrictive, and widely available
- PPO Plans: Offers more choice of providers, referrals not necessary, and 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 health care
- SNP: Excellent choice for targeted care if you qualify, but not available in all areas
Learn More From Our Sources
- Medicare | What Medicare Covers | Last accessed July 2022
- Medicare | Part D prescription drug coverage | Last accessed July 2022
- Medicare | Medicare Advantage Plans | Last accessed July 2022
- Medicare | Medicare Supplement Insurance (Medigap) | Last accessed July 2022
- Medicare | Find a 2022 Medicare Health Plan | Last accessed July 2022
- Aetna Medicare Advantage Plans Review
- Anthem Medicare Advantage Plans Review
- Blue Cross Blue Shield Medicare Review
- Can I Change Medicare Advantage Plans Anytime?
- Cigna Medicare Advantage Plans Review
- Do Medicare Advantage Plans Cover Dental Services
- Highmark Medicare Advantage Plans Review
- Humana Medicare Advantage Plans Review
- Kaiser Foundation Medicare Advantage Plan Review
- Medicare Advantage Enrollment Periods, Including The Initial Coverage Election Period (ICEP)
- Medicare Advantage HMO Plans
- Medicare Advantage PPO Plans
- Medicare Advantage vs. Medigap: which is better?
- Medicare Fee-for-Service
- Medicare MSA Plans
- Medicare Payments – Medicare Easy Pay and Other Options to Pay Your Medicare Premiums
- Medicare SNP Plans (Special Needs Plans)
- Medicare Supplements Explained – Understand Plan F vs. Plan G vs. Plan N
- Premera Medicare Advantage Plans Review
- Providence Medicare Advantage Plans Review
- UnitedHealthcare Medicare Advantage Review