Learn About Medicare Advantage Plans and What They Cover

What is Medicare Advantage? Medicare Part C, commonly called Medicare Advantage, is an alternative to Original Medicare. It is offered to qualifying older and disabled adults and it is typically provided by private insurance companies rather than by the federal government.

Medicare Advantage (Part C)  plans include both the Part A (hospital) and Part B (medical coverage) that are usually provided by Original Medicare. Most plans also include Part D (prescription drug coverage).

Medicare Advantage plans provide comprehensive coverage by replacing Original Medicare & Prescription Coverage. Find out about Medicare options, claims and more.

Note, original Medicare (Medicare Part A and Part B) will pay for hospice care, as long as your hospice provider is enrolled in the program and accepts Medicare coverage. A Medicare Advantage (Part C) plan will also cover hospice care. 

What is Medicare Advantage (Part C)?

If you join a Medicare Advantage Plan, the plan will provide all of your Part A (Hospital Insurance) and Part B (Medical Insurance) coverage. Medicare Advantage Plans may offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs. Most include Medicare prescription drug coverage (Part D).

Medicare Advantage is typically reserved for persons 65 or older. You also qualify if you have a disability or have been diagnosed with an end-stage renal disease.

Since a Medicare Advantage plan is offered by private insurance companies, it is regarded as alternative or supplementary coverage. Medicare Advantage also includes Part D coverage, which you would otherwise need to apply for separately under Original Medicare insurance. 

When you obtain Medicare Advantage (Part C) coverage, you’re receiving a bundled service that is federally regulated but available through private companies. These companies contract with the Medicare program, which is how they are able to bundle Parts A, B, and D.

The federal government pays a private insurance company a fixed monthly rate for the government’s portion of the Medicare expenses. The individual receiving the coverage is responsible for paying for the rest of the coverage.

Each plan comes with a monthly premium for the Medicare Advantage plan, a Part B premium—which is in part paid by the plan—and some out-of-pocket costs. For example, your plan may require you to make a $15 copayment out of pocket for each doctor’s visit. 

Out-of-pocket costs vary by plan. Under the Medicare Advantage plan, there is an annual limit on your out-of-pocket costs for services that fall under Parts A and B. This means that your out-of-pocket costs will probably be less than what you would have had to spend with Original Medicare coverage.

With Medicare Advantage, you usually even receive coverage for dental, vision, and hearing services without needing additional insurance.

Be careful, though, lest you end up having to pay for services or items that the plan doesn’t recognize as medically necessary. Fortunately, this information isn’t secret. If you have any doubt, just ask before receiving the product or service to make sure that it is covered by your plan. 

Your plan may enforce certain rules. For example, your Medicare Advantage plan may govern what doctors you can see and what referrals you need in order to see a specialist.

If you have a Medicare Advantage plan, you cannot qualify for Medigap. Medigap is supplementary coverage that individuals add to their Original Medicare coverage in order to take care of copays, deductibles, and coinsurance costs.

Medicare Advantage plans are similar to regular health insurance plans in that there is no one-size-fits-all solution. So take the time to shop for the plan that offers the premium and features that best suit your needs.

Here is a list of the most common types of Medicare Advantage plan.

Health Maintenance Organization (HMO) Plans

HMO plans are usually the most affordable options. However, they required that the individuals choose a primary care physician and any other doctor within the plan’s specific network.

HMOs also require a referral from the individual’s primary care physician, with the exception of medical emergencies, dialysis, or urgent-care situations.

Preferred Provider Organization (PPO) Plans

PPO plans don’t require individuals to only see doctors within their specific network. However, individuals who doselect from their network pay less in copayment and other coverage fees.\

PPOs also don’t require any referrals for you to see a specialist or choose a primary care physician.

Special Needs Plans (SNPs)

SNPs are specially designed for individuals with specific diseases or special needs. These diseases include chronic medical conditions like dementia.

SNPs require you to use providers within their specific network, except in the cases of emergency care, urgent care, or dialysis. SNPs also require you to select a primary care physician and to obtain a referral before seeing a specialist.

Private Fee-for-Service (PFFS) Plans

PFFS plans allow you to see any provider that has been approved by the Medicare network. However, if you stay within the plan’s own network, you pay less in copayment fees and other costs. 

With PFFS plans, there are no fixed fees. You find out how much of a service is covered by the plan and how much you must pay out of pocket at the time you receive care.

What Are the Benefits of Medicare Advantage?

Comprehensiveness

Because Medicare Advantage (Part C) plans bundle all of the Original Medicare plans, they offer coverage for the following:

•     Vision care
•     Dental care
•     Hearing care
•     Hospitalization
•     Some homecare health services
•     Prescription drug coverage
•     Preventative care
•     Fitness memberships (for example, SilverSneakers)

Moreover, Original Medicare will generally cover everything related to a terminal illness. Original Medicare will cover these services even if you choose to remain in a Medicare Advantage Plan or other Medicare health plan following treatment.

Convenience

Original Medicare offers only two forms of coverage: hospital and medical insurance. If you have Original Medicare, you usually need to purchase supplementary coverage such as Plan D and Medigap. In contrast, Medicare Advantage covers all the bases.

Personalization

Medicare Advantage offers several different plans to meet the needs of different situations. For example, if you have a chronic health problem or special needs, the Special Needs Plan provides the necessary coverage. If you need some flexibility when choosing your provider, the PFFs and PPO plans can provide this flexibility.

Cost-Effectiveness

Most Medicare Advantage plans don’t charge premiums and offer either low deductibles or no deductibles. Most also set annual limits on the out-of-pocket costs you must pay. And many individuals save money on laboratory services and medical equipment when enrolled in a Medical Advantage plan.

Coordination

Medicare Advantage plans coordinate your medical care. Your various health care providers and specialists talk to each other about your health care plan and medical needs so that you can receive consistent care without having to worry about misinformation, unnecessary expenses, or lack of awareness about potential medication interactions.

What Are the Drawbacks of Medicare Advantage (Part C)?

Although most people are happy with their plans, you should consider the drawbacks before signing up for one.

Limited Network

Depending on the plan you choose, there may be restrictions on which providers you may see. You can still choose an out-of-network provider or choose a plan that gives you more choices about providers. But these plans usually have higher premiums or higher fees.

Additional Fees

Although the purpose of Medicare Advantage is to consolidate the cost of the Original Medicare plans, insured persons may nonetheless incur additional fees; for example, copayments for visits to specialists and deductibles for prescription medications.

State-Specific Coverage

Medicare Advantage plans tend to offer only certain types of coverage in specific service areas. If you move to a new service area, you may not be able to keep your current plan.

How to Enroll

If you qualify for Medicare by turning 65, your Initial Enrollment Period starts 3 months before your birthday, includes the month you turn 65, and ends 3 months after the month you turn 65. Note—you can change Medicare Advantage plans anytime during your Initial Enrollment Period. 

Each year, the open enrollment period for Medicare Advantage lasts from October 15 to December 7. To enroll in a Medicare Advantage plan, you must already have Medicare coverage. You must also meet the criteria of being 65 or older or having certain disabilities. See the second FAQ question below.

You can browse the Medicare Plan Finder to see which plans that are offered in your area meet your needs. Everything can be done online, and there’s a phone number that you can call if you have any questions. Enter your zip code and click on Medicare Advantage Plans to make sure that you’re browsing the correct list.

Frequently Asked Questions

How much do Medicare Advantage (Part C) plans cost?

In 2020, the average monthly cost of a plan was about $23. The monthly premium for Part B was about $144.60.

The cost of your Medicare Advantage plan depends on the specific plan you choose and the additional fees—premiums, deductibles, out-of-pocket costs—associated with that plan.

How can I qualify for Medicare Advantage (Part C)?

• Be 65 or older or have been receiving disability benefits for a minimum of 24 months.
• Be already enrolled in an Original Medicare plan.
• Live in the service area of the plan you want.

If you are under the age of 65 but have special needs, you may also qualify for Medicare Advantage.

How does Medicare Advantage (Part C) differ from traditional Medicare?

With Original Medicare, you receive a wide variety of medical services with a few exceptions. With Medicare Advantage, you receive the same medical services as well as others, like vision, dental, and hearing services. However, Medicare Advantage is often associated with higher costs for hospitalization and extra copayment fees.

Is there a difference between a Medicare Advantage (Part C) plan and a Medicare supplement plan?

Yes. Original Medicare supplemental coverage like Medigap covers the plans beyond Part A and Part B. These would include Part D, dental, vision, and hearing coverage, for example.

Medicare Advantage works as a bundle for Parts A, B, and D, plus the extra coverage for dental, vision, and hearing services. In other words, instead of serving as a supplemental plan, Medicare Advantage is a whole health insurance plan.