What Is a Medicare Advantage (Part C) Plan?

Medicare Advantage, also known as Medicare Part C, is a bundled alternative to Original Medicare. Private insurers that offer Medicare Advantage plans contract with the federal government to provide health insurance benefits to people who qualify for Medicare.

Nearly 5 in 10 people eligible for Medicare are in Medicare Advantage plans.

The pros and cons of Medicare Advantage (Medicare Part C)

Medicare Advantage plans have benefits and drawbacks. While they're a slam-dunk choice for some people, they're not right for everyone.

Pros:

• Extra benefits: Medicare Advantage plans may include some cost savings or subsidies toward hearing, dental and vision care, which aren't covered by Original Medicare.

• Lower costs: Many Medicare Advantage plans have no monthly premiums, and out-of-pocket costs may be lower than those for Original Medicare.

• Spending caps: There may be limits on how much you may pay out of pocket for hospital and medical coverage. This limit is determined by the Centers for Medicare & Medicaid Services, and it can be as high as $8,300 in 2023.

Cons:

• Provider choice: On Medicare Advantage, you have less freedom to choose your medical providers because you often must use providers within your plan's network.

• Travel restrictions: Many plans require that you reside and get your nonemergency medical care in the plan’s geographic service area.

• Less plan flexibility: If you have Medicare Advantage, there may be limits on your ability to switch back to Original Medicare with a Medicare Supplement Insurance, or Medigap, policy.

• Potential for instability: There's a chance your Medicare Advantage plan could end, by the insurer or the network and its included medical providers. (If this happens, you’ll be notified and offered other options.)

How Medicare Advantage plans work

Medicare Advantage plans are required to provide the same benefits as Medicare Part A, which covers hospitalization, and Medicare Part B, which covers doctor’s visits. Medicare Advantage plans also typically include Medicare Part D prescription drug coverage and may include benefits not covered by Medicare, providing some savings on routine dental care, eye exams and glasses, and hearing aids.

Medicare Advantage vs. Original Medicare

Medicare Advantage plans usually have provider networks that limit your choices for medical care. If you go outside the network, your care may not be covered or may cost significantly more than if you stay in-network. With Original Medicare, you can use any doctor or medical facility that accepts Medicare assignment.

In exchange for less freedom, though, you often pay less. You would still be required to pay a monthly premium for Part B, but the additional cost for a Medicare Advantage plan may be less than for a Medigap plan. Many Medicare Advantage plans have a $0 premium.

Medicare Advantage plans also have a maximum out-of-pocket limit for covered care related to Part A and Part B. This caps the amount you’ll be expected to pay in addition to your premiums. That cap can be as high as $8,300 in 2023. Original Medicare has no out-of-pocket limit, although if you have a Medigap plan, many of your out-of-pocket costs are covered.

Medicare Advantage vs. Medigap

Medicare Advantage plans are sometimes confused with Medicare Supplement Insurance, also known as Medigap. Both are offered by private insurance companies, but the way your expenses are covered is different. As the name suggests, Medigap plans cover the “gaps” in Original Medicare by covering your share (generally 20%) of covered charges. When you seek medical care, most or all of your cost share will be covered by your Medigap plan. For this, you'll pay a monthly premium.

Medicare Advantage plans, by contrast, are bundled plans that include the same coverage you'd get with Medicare Part A and Part B (and usually Part D), plus often limited coverage for other things, like some dental services or an allowance for some over-the-counter drugs. You may pay a premium for a Medicare Advantage plan, but many are offered at no premium beyond your required Medicare Part B premium. You’ll pay copays or coinsurance when you seek medical care. With a Medicare Advantage plan, you’ll pay out of pocket whenever you see a provider, and there’s an out-of-pocket limit on covered care of up to $8,300 in 2023.

Also, because Medigap policies are standardized, it’s relatively easy to compare costs. Every Medicare Advantage plan is different, so comparison shopping can be difficult. You can’t have a Medicare Advantage plan and Medigap plan at the same time.

How to choose the best Medicare Advantage (Part C) plan

Comparing Medicare Advantage plans requires you to understand your health care needs and think about what each type of plan offers. If you have a chronic health condition and want to be able to keep using a specific doctor or facility, you’ll want health coverage that they accept. If you take prescription drugs, some plans may offer lower out-of-pocket costs than others.

Here are some questions to ask as you evaluate Medicare Advantage plans:

• Do you have to get a referral to see specialists?

• What benefits does each plan include? (Do you need vision or dental, and if so, are they included?)

• Are all of your prescription drugs covered, and how much will they cost?

• Are your doctors covered?

• What’s the plan's Medicare star rating?

How to enroll in a Medicare Advantage plan

Once you’ve done your research and found a Medicare Advantage plan that fits your needs, there are various ways to enroll, according to Medicare.gov:

• Use Medicare’s plan finding tool to find the plan in your area. Enter your ZIP code to get started.

• Go to the plan’s website, and look for an option to enroll online.

• Contact the plan to get an enrollment form, which you can complete and return.

• Call the provider and join by phone.

• Call Medicare at 800-MEDICARE (800-633-4227).

You will need your Medicare number and the date your Medicare Part A and/or Part B coverage started. You must be enrolled in Medicare Parts A and B before you can buy a Medicare Advantage plan.

You can enroll in a Medicare Advantage plan only during your initial enrollment period (when you first become eligible for Medicare) or during the open enrollment period from Oct. 15 to Dec. 7. Once you have a Medicare Advantage plan, you can switch plans during Medicare open enrollment in the fall or Medicare Advantage open enrollment from Jan. 1 to March 31 each year.

How to switch Medicare Advantage plans

If you want to change Medicare Advantage plans, you can do so during Medicare's fall open enrollment period (Oct. 15 to Dec. 7) or Medicare Advantage's open enrollment period (Jan. 1 to March 31).

You also can change to Original Medicare during these periods, but it may be hard to get a Medicare Supplement Insurance policy if you switch after the first year. In most states, insurers are required to issue you a Medigap policy only during your initial Medigap enrollment period (typically the six months after you turn 65 and enroll in Medicare Part B) or if you switch out of your Medicare Advantage plan in the first year. After that, insurers may deny you a Medigap policy if you have health problems, or they can require a waiting period before your pre-existing conditions are covered.