What Is a Medicare Advantage Plan?

A Medicare Advantage Plan is an alternative to traditional Medicare, offered by private insurers. Here are the benefits and drawbacks.

Liz WestonNovember 30, 2020
what-is-medicare-advantage-plan
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A Medicare Advantage Plan is an all-in-one alternative to Original Medicare. Private insurers that offer these plans contract with the federal government to provide health insurance benefits to people who qualify for Medicare.

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The pros of Medicare Advantage Plans typically include:

  • Additional benefits, which may include hearing, dental and vision care.

  • Potentially lower premiums for coverage.

  • Limits on how much you may have to pay out-of-pocket.

Some of the drawbacks of Medicare Advantage Plans typically include:

  • Less freedom to choose your medical providers.

  • Requirements that you reside and get your nonemergency medical care in the plan’s geographic service area.

  • Limits on your ability to switch back to Original Medicare with a Medicare Supplemental Insurance policy.

Medicare Advantage Plans — also known as Medicare Part C or MA 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, such as routine dental care, eye exams and glasses and hearing aids.

Medicare Advantage Plans are sometimes confused with Medicare Supplemental Insurance, also known as Medigap. Both are offered by private insurance companies, but Medigap policies cover people who buy Original Medicare (Part A and Part B). Medicare Advantage Plans, by contrast, provide an alternative to Medicare Part A and Part B. You can’t have both a Medicare Advantage Plan and a Medigap plan at the same time.

Also, because Medigap policies are standardized, it’s relatively easy to compare costs. Every Medicare Advantage Plan may be  different, so comparison shopping can be difficult.

How Medicare Advantage Plans differ

Medicare Advantage Plans may have provider networks that limit your choices. If you go outside the network, your care may not be covered. With Original Medicare, you generally 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. Sometimes the Medicare Advantage Plan may have a $0 premium.

Medicare Advantage Plans may also have a maximum out-of-pocket limit for covered care. That caps the amount you’ll be expected to pay in addition to your premiums. Original Medicare and most Medigap plans don’t have out-of-pocket maximums.

Switching Medicare Advantage Plans

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

You also can change to Original Medicare during these periods, but it could be hard to get a Medicare Supplemental Insurance policy if you switch after the first year. Insurers are required to issue you Medigap policies 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 preexisting conditions are covered.

Frequently asked questions

You can sign up for a Medicare Advantage Plan if you already have Medicare Part A and Part B, and if the plan is available in your area.

Original Medicare includes Medicare Part A (hospital insurance) and Part B (medical insurance), and if you want drug coverage, you’ll need Medicare Part D as well. You can buy Medicare Supplemental Insurance (Medigap) to help pay for your out-of-pocket costs, and you can use any healthcare provider in the U.S. that accepts Medicare.

Medicare Advantage is an “all in one” plan that includes the same coverage as Medicare Part A, Part B, and often Part D. Out-of-pocket costs may be lower, and plans usually offer extra benefits like vision and dental coverage. With a Medicare Advantage Plan, you’ll be limited to healthcare providers within the plan’s network.

The pros of Medicare Advantage Plans include potentially lower premiums for coverage, limits on out-of-pocket costs, and additional benefits such as hearing, dental and vision care.

Drawbacks include less freedom to choose your medical providers, requirements that you reside and get your non-emergency medical care in the plan’s geographic service area, and limits on your ability to switch back to Original Medicare.

No, they’re not the same thing. Medicare Supplement Insurance or Medigap is coverage that fills gaps in Original Medicare, such as covering additional copays or coinsurance. Medicare Advantage completely replaces Original Medicare.

Yes, in most cases, Medicare Advantage Plans offer prescription drug coverage. But you must sign up for a plan that offers prescription drug coverage. (If you’re not sure, ask.)

No, you must generally use the healthcare providers within your Medicare Advantage Plan’s network. Some plans allow for you to use out-of-network providers in emergencies only, while other plans allow you to go out of network, but your out-of-pocket costs will be higher.

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 you see specific doctors, 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:

— Do you have to get a referral to see specialists? — What benefits do they include? (Do you need vision or dental?) — How much will your drugs cost? — Are your doctors covered? — What’s their Medicare star rating?

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

— Use Medicare’s Plan Finder to find the plan in your area. Click on “Enroll.” — Go to the plan’s website to see if you can enroll online. — Contact the plan to get a paper enrollment form. Fill it out and return it to the plan provider. — Call the provider for the plan you wish to join. — Call Medicare at 1-800-MEDICARE (1-800-633-4227).

You will need your Medicare number and the date your Part A and/or Part B coverage started.

Keep in mind that you can only enroll in a Medicare Advantage Plan 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’re enrolled in a Medicare Advantage Plan, you can switch plans during Medicare Advantage Open Enrollment from Jan. 1 to March 31 each year.

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