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What is Medicare Advantage? A Guide to Your Options

Mar 29, 2020 6 min read Bana Jobe

Key Takeaways

  • Medicare Advantage (MA) is Medicare operated by private insurance companies.
  • Not all locations have Medicare Advantage plan options.
  • MA plans often have some differences in benefits, so it is important to compare the options.


What is Medicare Advantage?

Also known as "Medicare Part C" or "MA plans," Medicare Advantage Opens in new window plans are a way to get Medicare coverage through a private insurance company. An MA plan may also be offered in combination with Medicare’s pharmacy benefit or “Medicare Part D”.



How do Medicare Advantage plans work?

Medicare Advantage plans are provided by private health insurers, which have been authorized by the Centers for Medicare and Medicare Services (“CMS”). MA plans must comply with Medicare Advantage rules, but are in many ways administered like a regular health insurance policy you might get from an employer or the HealthCare.gov Opens in new window marketplace. Instead of paying a health care provider for services, as is the case with traditional Medicare, under Medicare Advantage CMS pays the authorized private health insurance to provide the Medicare benefits to you. You also have all the same rights Opens in new window as beneficiaries enrolled in traditional Medicare.


How much does Medicare Advantage cost?

Some MA products are zero premium and others charge some amount of premium. Premium costs, as well as out of pocket costs, will vary from plan to plan and will depend on location and what supplemental benefits are provided. It is important to check each MA plan's costs and coverage as you compare your options, and assess those factors alongside your financial strategy.


What are my Medicare Advantage options?

As you compare your MA plan options you will start to see commonly used terms and acronyms:

  • Health maintenance organizations (HMO) may limit you to receiving services only from in-network providers — and may require you to have a referral from a primary care doctor to see specialists.
  • Preferred provider organizations (PPO) offer a broader option of providers, but usually at a higher cost to you.
  • Special Needs Plans (SNP) are designed to focus on the unique needs of people with certain medical conditions or populations, such as dual eligible (i.e. enrolled in both Medicare and Medicaid). They may not offer drug coverage.
  • HMO Point-of-Service (HMOPOS) plans may offer out-of-network coverage for some health care services — but at a higher cost to you.

Not all areas offer all plan types, so your choices may vary once you start comparing your options on Medicare's Plan Finder. Opens in new window


Who is eligible?

People typically become eligible for Medicare at age 65, but there are certain other limited ways to be eligible if you are under 65, such as if you have been receiving disability benefits for more than two years. However, if you have end-stage renal disease (ESRD) Opens in new window, you are not eligible for a Medicare Advantage plan.


Advantages of Medicare Advantage

Medicare Advantage plans all offer the established Medicare Part A and B benefits, but are different in some respects, such as premium, out-of-pocket expenses, provider network, types of supplemental benefits and pharmacy benefits. You will also need to determine your medical needs and choose which Medicare Advantage plan is the best fit for you.

One advantage of having a Medicare Advantage plan is that the supplemental benefits and other benefits may be more in line with your needs. Some of these supplemental benefits may be gym membership, dental services Opens in new window and vision coverage.


Disadvantages of Medicare Advantage

Disadvantages are that you may be limited in which health care provider you can see, and while the Medicare Advantage plan must offer Medicare Part A and B, it could change the supplemental benefits it offers each year. Also, you must receive all non-emergency care within the Medicare Advantage plan’s services area and network. If you do not, you may have higher out-of-pocket expenses, or the coverage could even be denied. Additionally, a health insurer may choose to stop offering their MA plan in your location depending on their business needs. This is relatively rare and CMS notes that very few plans have stopped offering Medicare Advantage plans Opens in new window, but it is a possibility. If this were to happen with an MA plan in which you have enrolled, you would receive a notice and have the option to either choose another Medicare Advantage plan or go back to traditional Medicare.


How can I sign up for Medicare Advantage?

Visit Medicare's Plan Finder Opens in new window to learn about your options — as well as the costs associated with each. From there, you can go to each plan's website to learn more or enroll. You can also call 1-800-MEDICARE (1-800-633-4227) for help.

Before you enroll, make sure you have your Medicare card. You'll need to provide your Medicare number and the date your Original Medicare coverage began.

And be sure to check your plan's drug coverage. If it doesn't offer drug coverage (such as with MSA plans), you'll need to enroll in Medicare Part D to get that benefit. But be careful to not double-up drug coverage: If you enroll in Medicare Part D with an HMO or PPO (which has drug coverage), you'll get removed from your MA plan and sent back to Original Medicare.


What you can do next

Visit Medicare's Plan Finder Opens in new window to check out the Medicare Advantage plans available in your area.



Bana Jobe is an Austin-based health writer and editor with more than a decade of content experience for brands, agencies and digital media. She loves turning complex concepts into empowering stories.

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