What are Medicare Advantage Plans?

Medicare Advantage Plans infographic

According to Medicare.gov, Medicare Advantage plans, also called Medicare Part C, are an “all in one alternative to Original Medicare.” Private companies approved by Medicare offer you Medicare Advantage (MA) plans. These Advantage Plans provide you with the Medicare benefits of Part A (hospital) and Part B (medical). You also have the option of joining an Advantage Plan that includes Medicare Part D prescription drugs. 

Types of Medicare Advantage (MA) Plans include:

  • Health Maintenance Organization (HMO)
  • Preferred Provider Organization (PPO)
  • Private-Fee-for-Service (PFFS)
  • Special Needs Plans (SNPs)

What is Medicare Part C?

Medicare Part C is an all-in-one alternative to Medicare hospital (Part A) and medical (Part B) coverage. You have the option to include prescription drug coverage (Part D). Furthermore, Medicare Part C provides you with exclusive benefits not covered by Original Medicare.

Exclusive Benefits

Medicare Part C Advantage Plans may provide you with the following exclusive benefits:

  • Vision
  • Dental
  • Hearing
  • Fitness program
  • Transportation

Learn more about these exclusive MA Plan benefits.

Senior man eye exam for new glasses
Medicare Part C may include vision benefits.

So what are the differences between Medicare Part C and Original Medicare? First, let’s look at your Medicare options. Then we will look at the differences.

Choosing Your Medicare Plan

You can choose to keep Original Medicare and get a stand-alone Part D drug plan and a Medicare Supplement Plan. Otherwise, you can select a Medicare Advantage Plan (Part C) and include drug coverage. If you choose Medicare Part C, you can not purchase a supplement plan.

To help you choose, consider the differences between Original Medicare and Advantage Plans. The chart below shows you the key differences. For example, Original Medicare is nationwide. In comparison, Medicare Advantage Plans require you to use the hospitals and doctors in their network. HMOs may have little or no premiums. However, you will need to get referrals to see specialists.

Choosing Your Medicare Plan seniors at chess board
Two seniors consider their Medicare options.

Medicare Advantage vs Medicare

Medicare 2021 Chart - Advantage vs Original differences

Compare Medicare Advantage and Medicare

Group of Seniors consider Medicare Plans
Group of seniors discuss Medicare differences.

The 2021 chart above compares the differences between Original Medicare and Medicare Advantage Plans. Starting in 2021, anyone with ESRD can join Medicare Advantage Plan. Original Medicare has no medical insurance underwriting when you apply during your initial Open Enrollment Period. First, let’s look at how the costs differ between Medicare and Medicare Advantage. 

Original Medicare Costs

With Original Medicare, you pay 20% coinsurance. Furthermore, whenever you get a diagnostic test or have a hospital or ER visit, you spend on copayments. You pay Medicare Part B monthly premiums and Part D premiums if you have drug coverage. You have no maximum out-of-pocket limit.

Medicare Advantage Costs

Medicare Advantage (MA) Plans have copayments for doctor visits and medical services. MA plans do not have coinsurance. However, you pay Part B and MA plan premiums, which often include drug coverage. Your maximum out-of-pocket limit in 2021 is $7,550. 

Original Medicare does not cover prescription drugs.

Learn more about the differences between Advantage vs. Original Medicare. Next, let’s look at the differences between Medicare Advantage and Medigap Plans.

Medicare Advantage vs Supplement Plans

Medicare 2021 Chart - Advantage vs Supplement infographic
Female Doctor speaking with senior woman
Female doctor speaks with a senior woman.

The Medicare 2021 chart show differences between Medicare Advantage and Supplement (Medigap) Plans. Similar to Original Medicare, Medigap Plans have no medical insurance underwriting if you apply during your initial Open Enrollment Period. Otherwise, you will have to answer questions about your medical condition, and supplement companies could deny you coverage.

Let’s consider the cost differences between Advantage and Supplement plans.

Cost Differences of Advantage vs Supplement

In addition to the copayments already mentioned, Advantage Plans also have lower monthly premiums than Medigap Plans. Most Advantage Plans cover prescription drugs. However, Supplement Plans do not. Therefore, you will need to pay premiums on a separate Part D drug plan.

Discover more Medigap Plan differences, such as:

  • Copays for Supplement Plans K, L, and N
  • Low 2021 Advantage Plan premiums
  • Maximum out-of-pocket limits on plans K and L
Medicare Part D prescription drug costs pills and hunred dollar bills
Medicare Supplements do not cover prescription drugs.

Your Medicare Advantage Plan Card

New Medicare Card
Sample Medicare Card
Medicare Advantage Plan Card
Sample Medicare Advantage Card

If you choose Medicare Advantage Plan, a private company will provide you with health insurance. After you have signed up for Medicare Parts A and B, you will receive your Medicare Card. This card will be different than your Medicare Advantage Card.

For example, if you choose a Medicare Advantage Plan with United Healthcare (endorsed by AARP), this private company provides you with health insurance. Consequently, you will no longer receive health benefits from Original Medicare.

Paying for Your Health Benefits

When you enroll in a Medicare Advantage Plan, your health care provider will send their bills directly to your Medicare Advantage company. Therefore, please present your Medicare Advantage Plan card (not your Medicare card) to your healthcare provider. In case you decide to switch back to Original Medicare, please file your Medicare card in a safe place.

Medicare Advantage (MA) Plans

In most Medicare Health Maintenance Organization (HMO) plans, you receive care and services from doctors, hospitals, and other healthcare providers in your plan’s network. However, you can get out-of-network coverage for emergency care, urgent care, and dialysis. You will need to select a primary care physician. That physician will coordinate a referral if you need to see a specialist. 

Medicare Preferred Provider Organization (PPO) plans allow you to see doctors outside the network. However, you will have substantially higher out-of-pocket spending to do so. In other words, PPO plans give you the flexibility to go to doctors, specialists, or hospitals that are not on the plan list, but it will usually cost more. In most cases, HMO and PPO plans cover prescription drugs.

Medicare Private Fee-For-Service (PFFS) plans are less common and available in limited counties. Moreover, PFFS plans may or may not include drug coverage. Like PPO, PFFS plans allow you to choose out-of-network doctors, hospitals, or other providers. However, your cost will usually be lower if you stay in-network. 

When choosing a Medicare Advantage network, make sure all of your providers are in the network (not just doctors). For instance, if you have durable medical equipment or home health care provider, you need to make sure these providers are in your network.

Medicare Advantage Network
Medicare Advantage has plans like HMO and PPO that provide you with a network of healthcare benefits.
Senior man pays for prescription drugs at pharmacy
Most HMO and PPO plans cover your prescription drugs.

Special Needs Plans (SNP)

Medicare Special Needs Plans (SNP) limit membership to people with specific diseases or characteristics. SNPs tailor their benefits, provider choices, and drugs to best meet the particular needs of the groups they serve. Most often, you get care and services from doctors or hospitals in the Medicare SNP network. 

However, you can receive out-of-network care for emergency or urgent care from a sudden illness or injury. Likewise, you can receive out-of-area dialysis if you have End-Stage Renal Disease (ESRD). 

All SNPs provide prescription drug coverage. In most cases, SNPs may require you to have a primary care doctor. Otherwise, the plan may need you to have a care coordinator to help with your health care. 

If you need to see a specialist, you will need a referral. However, you do not need a referral for annual mammogram screening or in-network pap tests and pelvic exams.

According to Medicare.gov, to join a Special Needs Plan, you must have one or more of the following chronic conditions:

  • Chronic alcohol and other dependence
  • Autoimmune disorders
  • Cancer (not pre-cancer conditions)
  • Cardiovascular disorders
  • Chronic heart failure
  • Dementia
  • Diabetes mellitus
  • End-stage liver disease
  • End-stage Renal Disease requiring dialysis
  • Severe hematologic disorders
  • Chronic lung disorders
  • Chronic and disabling mental health conditions
  • Neurologic disorders
  • Stroke

Enroll in Medicare Advantage Plan

To enroll in a Medicare Advantage Plan, you must first enroll in Medicare Part A and Part B. Consequently, you will still pay Medicare Part B monthly premium. You can enroll in an Advantage Plan during these times:

  • Initial Open Enrollment Period when you first turn 65
  • Annual Election Period October 15 – December 7
  • MA Open Enrollment January 1 – March 31

Annual Election Period

During the Annual Election Period (AEP), you also have the following options:

  • Enroll in an Advantage Plan
  • Change to a different Advantage Plan
  • Drop your Advantage Plan and return to Original Medicare

Discover other Medicare Plan changes you can make during AEP.

Medicare Advantage Open Enrollment

During Medicare Advantage Open Enrollment, you have two options:

  • Switch from one Advantage Plan to a different Advantage Plan
  • Disenroll from your Advantage Plan and return to Original Medicare and join a Part D drug plan
Senior couple overweight walking in woods
A senior couple walks in the woods
Aftican American Couple overweight with bicycles
Active senior couple on bicycles in a park.