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.
The pros and cons of Medicare Advantage Plans
Potentially lower premiums for coverage.
Limits on how much you may have to pay out-of-pocket.
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.
How Medicare Advantage Plans work
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.
Medicare Advantage vs. Medicare
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 enrollment 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.