Also known as Medicare Part C, Medicare Advantage plans are offered by private insurance companies. They must provide the same coverage you get with Original Medicare (Parts A and B) but most offer additional benefits as well.
What Is Medicare Advantage?
Medicare Advantage (MA) plans are a type of Medicare health plan offered by a private insurance company. The insurer enters into a contract with Medicare to provide the same benefits and healthcare services that enrollees receive under Original Medicare. The only outlier is hospice care, which continues to be covered by Original Medicare, even if you enroll in an MA plan.
Most Medicare Advantage plans also offer extra benefits, which is why over one-third of Medicare beneficiaries join them. The most common additional benefits included with an Advantage plan are:
Some MA plans have a $0 premium. Even if yours doesn’t, you still need to continue paying your Medicare Part B premium. People choose Medicare Advantage despite the additional premium because they consider the additional benefits to be worth the extra cost. Instead of having to buy a Medicare Part D plan or ancillary coverage for dental or vision, you can get well-rounded coverage with a single MA plan.
Types of Medicare Advantage Plans
There are four main types of Medicare Advantage plans.
Health Maintenance Organization
HMO plans use a provider network to help control costs. From doctors to pharmacies — just about anything related to healthcare is part of provider network. Visiting a provider outside your plan’s network often means you have to shoulder 100% of the cost yourself. Most HMOs require members to choose a primary care physician, who coordinates your care when you need a specialist.
Preferred Provider Organization
PPO plans also include a provider network. However, you may choose an out-of-network provider if you’re willing to pay a higher copayment. Just make sure the provider accepts both your plan and Medicare assignment.
PFFS plans are similar to Original Medicare in that the plan determines what it will pay for services, leaving you to pay the remainder. You must use a provider who accepts your PFFS plan if you don’t want to pay the full cost of treatment.
Special Needs Plan
SNP plans are for beneficiaries who meet certain requirements, such as having a chronic condition or being eligible for both Medicare and Medicaid (known as dual eligibility). All special needs plans include coverage for prescription medications.
Some providers also offer two other Medicare plans.
- HMO-Point-of-service (HMO-POS) plans are similar to HMOs but include an out-of-network option if you’re willing to pay a higher out-of-pocket cost (assuming the provider accepts assignment and your plan).
- Medical savings account (MSA) plans have a high deductible. Your plan deposits funds into a bank account that you then use to pay for healthcare services. You must meet your deductible before coverage begins. And only Medicare-approved services count toward your deductible.
How to Choose a Medicare Advantage Plan
Most areas have multiple MA plan options. As costs and benefits vary, you need to compare your plan options carefully.
Look beyond the monthly premium to see the full cost of the plan. This includes copayments, coinsurance, deductibles, and the plan’s yearly out-of-pocket maximum.
Not all MA plans offer the same services, so look at what you get to be sure you’re comparing apples to apples. Also consider whether you need those extra benefits.
All prescription drug plans include a drug formulary, which is simply a list of covered prescriptions. Even the best Advantage plan isn’t worth the price if it doesn’t cover your prescriptions, so review the formulary carefully.
Every year, Medicare rates plans based on a variety of metrics via the 5-Star Rating System. Plans that receive 4+ stars are considered “excellent” while anything under 3 stars is considered “poor.”
Please note that you cannot have both a Medicare Advantage plan and Medicare Supplement Insurance (Medigap).
Who Is Eligible for a Medicare Advantage Plan?
If you are eligible for Medicare Part A and Medicare Part B, you’re eligible for Part C. However, that does not mean that you’re eligible for every Medicare Advantage plan. You must also live in the plan’s service area. In addition, if you want to join an SNP, you must meet that plan’s requirements.
Some Medicare beneficiaries are still enrolled in an employer-sponsored group health plan. If this describes you, talk to your benefits administrator before joining an MA plan to understand how it may impact your other health insurance.
When Can You Enroll in a Medicare Advantage Plan?
Your Initial Enrollment Period (IEP) begins 3 months before your 65th birthday and ends 3 months after your birth month, for a total of 7 months. If you are already receiving Social Security benefits before your IEP begins, you are automatically enrolled in Medicare. Everyone else needs to apply during their Initial Enrollment Period to ensure they do not incur late penalties.
You may delay Medicare enrollment without penalty if you qualify for a Special Enrollment Period (SEP). The most common reason is having creditable coverage when you turn 65. Typically, this means a group health plan courtesy of an employer (either yours or your spouse’s). When your coverage ends, you may use your SEP to enroll in a Medicare Advantage plan.
You may experience other SEPs due to special circumstances. Qualifying life changes include:
- Moving to a new address
- Losing your current coverage
- Becoming dual-eligible
If you qualify for an SEP, you usually have at least 2 months to sign up for an MA plan. Find the complete list on Medicare.gov
Medicare also provides two election periods each year:
The Annual Enrollment Period (AEP) occurs every year from October 15 through December 7. During this time, you may leave Original Medicare to enroll in an MA plan, leave Medicare Advantage for Original Medicare, switch from one Advantage plan to another, or join or change a Part D plan.
If you currently have an MA plan, you may make changes during the Medicare Advantage Open Enrollment Period (OEP). Beginning January 1 and ending March 31, OEP allows you to change to a new Advantage plan or return to Original Medicare. If the change results in you losing your prescription drug coverage, you may also enroll in a new Part D plan.
How Do You Contact a Medicare Advantage Plan?
As every MA plan is managed by a private insurance company, there is no universal Medicare Advantage phone number. Instead, you must call the insurer offering the plan in question.