How Medicare Advantage Plans Differ

Medicare Advantage plans (Medicare Part C) are sold by private insurance companies as an alternative to Original Medicare (Medicare Part A and Part B).

By law, every Medicare Advantage Plan must provide the same standard benefits as Original Medicare.

Senior couple walking in a forest

Different Types of Medicare Advantage Plans

There are several types of Medicare Advantage plans:

  • Health Maintenance Organization (HMO)
    HMO plans require you to get your care from doctors, health care providers and hospitals that are in your plan’s network, with the exception of:
    • Emergency care
    • Out-of-area urgent care
    • Out-of-area dialysis

  • Preferred Provider Organization (PPO)
    Although PPO plans allow you to get your health care from any doctor, health care provider or hospital, you will pay less if you stay within your plan’s network.
  • Private Fee-for-Service (PFFS)
    You can use your PFFS plan anywhere that accepts the terms of your plan. However, not every provider will accept payment terms under a PFFS plan, so we recommend asking beforehand to ensure you aren’t hit with any unexpected costs.
  • Special Needs Plans (SNPs)
    These Medicare Advantage plans are only available to people with specific diseases or characteristics. The benefits, drug formularies and provider choices of SNPs are customized to meet the needs of the groups they serve. In most cases, you must get care from doctors and hospitals in the SNP network. Some exceptions to this rule include:
    • Emergency or urgent care
    • Out-of-area kidney dialysis if you have End-Stage Renal Disease

Medicare Advantage vs. Original Medicare

Original Medicare and Medicare Advantage differ in several ways:

  • Medicare Advantage plans are sold by private insurers, whereas Original Medicare is administered by the federal government.
  • Many Medicare Advantage plans provide additional benefits such as dental, vision and prescription drug coverage. Original Medicare does not.
  • Individuals who are enrolled in Original Medicare can go to any doctor, health care provider or hospital that accepts Medicare patients. Individuals with Medicare Advantage may be limited to doctors, health care providers and hospitals that belong to their MA plan’s network.
  • Those enrolled in Original Medicare do not need a referral to see a specialist. Those enrolled in Medicare Advantage may be required to get a referral from their primary care physician to see a specialist if they have an HMO plan.
  • Original Medicare does not have an out-of-pocket limit, so there is no cap on what you could end up spending on health care. Medicare Advantage plans do have an out-of-pocket limit, which means the plan pays the full cost of covered services once you meet the limit.
  • Individuals enrolled in Original Medicare have the option to enroll in Medicare Supplement Insurance (Medigap). You cannot enroll in a Medigap plan if you have a Medicare Advantage plan.

Once you are enrolled in Medicare Advantage, you will no longer receive your Medicare benefits from Original Medicare. You will receive them from your Medicare Advantage plan. One notable exception is hospice care, which is still covered by Medicare Part A.

Medicare Advantage vs. Medicare Supplement Insurance

Like Medicare Advantage, Medigap plans are sold by private insurance companies. However, the way they function is different.

  • Unlike Medicare Advantage, Medicare Supplement Insurance does not replace Original Medicare. Rather, it helps cover some of the out-of-pocket costs that Original Medicare does not cover, such as Medicare deductibles, coinsurance and copayments.
  • Medigap plans do not cover prescription drugs. If you’re enrolled in Original Medicare and a Medigap plan, you can enroll in a Medicare Prescription Drug Plan (Medicare Part D) to receive coverage for prescription drug costs.
  • Neither Original Medicare nor Medicare Supplement Insurance covers routine dental, vision or hearing services. Some Medicare Advantage plans provide coverage for these services, but specific coverage details will vary between plans.
  • You must be enrolled in Medicare Part A and Part B to be eligible for Medicare Supplement Insurance. You cannot enroll in a Medicare Supplement Insurance plan if you’re enrolled in a Medicare Advantage plan.

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