What is Medicare Advantage?
3 things to know about Medicare Advantage plans:
1. They are also known as Medicare Part C.
2. They are an alternative way to get Medicare coverage through private insurance companies instead of the federal government.
3. They provide the same benefits as Original Medicare and may include additional benefits such as dental, vision, prescription drug and wellness programs coverage.
Medicare Advantage plans (Medicare Part C) are a form of private health insurance that provide the same coverage as Medicare Part A and Part B (Original Medicare) and may include additional benefits such as dental, vision and prescription drug coverage.
Medicare Advantage plans are widely used in the United States. In 2022, more than 26 million people are enrolled in Medicare Advantage plans, according to the Kaiser Family Foundation (KFF).1
What does Medicare Part C cover?
All Medicare Advantage plans include the same standard benefits as Original Medicare.
Most Medicare Advantage plans also provide prescription drug coverage.
Some Part C plans may also cover benefits such as:
Some Medicare Advantage plans may also cover services such as non-emergency medical transportation, home health care and home modifications such as bathroom grab bars.
Some types of plans restrict your coverage to in-network health care providers.
More info: What does Medicare Part C cover?
How much does Medicare Part C cost?
If you enroll in a Medicare Advantage plan, you may have to pay some or all of the following expenses:
- Original Medicare premiums
- Medicare Advantage plan premiums
- Out-of-pocket costs such as copayments, coinsurance and deductibles
Some Medicare Advantage plans feature $0 premiums, though $0 premium plans aren't available in all locations.
54 percent of all Medicare Advantage plans that include prescription drug coverage feature a $0 premium, and 98 percent of Medicare Advantage beneficiaries who have a plan that includes drug coverage are enrolled in a $0 premium plan.1
In the video below, Medicare expert John Barkett explains that Medicare Advantage premiums dropped by around 14 percent in 2020.
Who is eligible for Medicare Advantage plans?
There are 3 general eligibility requirements to qualify for Medicare Part C:
- You must be enrolled in Original Medicare (Part A and Part B)
- There must be a Medicare Advantage plan offered in your area
- You do not have End Stage Renal Disease (ESRD)
You enroll in a Medicare Advantage plan through a private insurance company, not the government.
You must be enrolled in Original Medicare before you can enroll in a Medicare Advantage plan.
You cannot have a Medicare Advantage plan and a Medicare Supplement insurance policy at the same time.
If your Medicare Advantage plan does not include prescription drug coverage, you may be allowed to add a Medicare Part D plan as well.
More info: Medicare Advantage eligibility
When can I enroll in Medicare Advantage?
Medicare requires that you enroll in, disenroll from, or make changes to your Medicare Advantage plan only during pre-determined enrollment periods.
If you are enrolling for the first time, you may be able to join a plan during your Initial Enrollment Period, which occurs around your 65th birthday, or around your 24th month of disability (if you’re under 65 and eligible for Medicare).
You also may be able to join or switch plans during the Annual Election Period (AEP, also commonly called the Fall Medicare Open Enrollment Period for Medicare Advantage plans), which runs from October 15 to December 7 every year.
There are also Special Enrollment Periods (SEPs) that may let you join a plan outside of the main enrollment periods, depending on your circumstances.
Qualifying circumstances for a Medicare Special Enrollment Period include, but aren't limited to:
- Moving outside of your current plan's coverage area
- Moving to an area where additional coverage options exist
- Losing employer coverage
- Moving into or out of a skilled nursing facility
More info: How to apply for a Medicare Advantage plan
What are the different Medicare Part C plans?
The number of Medicare Advantage plans available to you will depend in part on where you live and how many companies offer coverage in your area.
There are 5 major types of Medicare Advantage plans:
- Health Maintenance Organizations (HMOs)
These plans feature a network of participating health care providers.
With a Medicare HMO, you typically select a primary care physician (PCP). Your PCP coordinates your care and makes referrals to specialists within your plan network when you need additional care.
Your coverage is generally limited to only the providers within the HMO plan network.
- Preferred Provider Organizations (PPOs)
A Medicare PPO plan typically features a network of providers.
Unlike an HMO plan, a PPO plan may allow you to receive covered services from providers outside of the plan network, though you may pay higher out-of-pocket costs when you go outside of the network.
PPO plans typically do not require you to have a primary care physician, and you typically aren't required to get a referral to see a specialist.
- Private Fee-for-Service (PFFS) plans
A PFFS plan may not feature a network of preferred providers. You can typically visit any health care provider who accepts Medicare and the terms and conditions of your plan.
- Special Needs Plans (SNPs)
A Special Needs Plan is a certain type of Part C plan that is designed for people with a specific health condition or those who are dual-eligible for Medicare and Medicaid.
- Medical Savings Accounts (MSAs)
A Medical Savings Account combines a high-deductible health plan with a savings account. The plan distributes money into the savings account, which you may then use to pay for qualified medical expenses.
The type of plan you choose may affect your prescription drug coverage options, referral requirements and network restrictions.
More info: Medicare Advantage plan options
How do I compare Part C plans?
You should review the following 4 factors before enrolling in a specific Medicare Advantage plan:
- Type of plan
- Star rating2
A licensed insurance agent can help you compare the above information for the Medicare Advantage plans that are available where you live.
More info: Compare Medicare Advantage plans
Do I need Medicare Part C?
A Medicare Advantage plan allows you to bundle your Medicare Part A and Part B benefits into a single plan.
If want coverage for prescription drugs, dental benefits, routine vision care and other benefits that aren't covered by Original Medicare, you may want to consider a Medicare Advantage plan that offers those benefits.
Medicare Advantage plans also include an annual out-of-pocket spending limit, which Original Medicare doesn't cover. Out-of-pocket Medicare costs can add up quickly, and an out-of-pocket spending limit could potentially help you save money.
Speak with a licensed insurance agent to learn more about whether a Medicare Advantage plan may be right for you.
1 Freed M. et al. (Nov. 2, 2021). Medicare Advantage 2022 Spotlight: First Look. Kaiser Family Foundation. Retrieved from www.kff.org/issue-brief/medicare-advantage-2022-spotlight-first-look.
2 Medicare evaluates plans based on a 5- star rating system.