Medicare Advantage plans vary in cost and options, and some plans may not be available in all areas. Coverage is also a factor when selecting the best Advantage plan.
Medicare Part C, also known as Medicare Advantage, is an alternative to original Medicare. The plans are offered by Medicare-approved private companies and must offer basic Medicare coverage, as with original Medicare. Many plans include additional benefits.
This article discusses Medicare Advantage and compares various plans. It also looks at when to enroll, eligibility, and costs.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medicare Part C, also known as Medicare Advantage, is an alternative to original Medicare (Part A and Part B). Medicare requires that all Advantage plans provide at least the same basic level of coverage as original Medicare.
With an Advantage plan, a person continues to pay their Part B premium to Medicare. They may also pay a separate premium to their Advantage plan, although some plans have zero premium.
Advantage plans often incorporate Medicare parts A and B, and Part D, into their coverage options. However, the chart below shows a few of the differences between original Medicare and some Advantage plans.
|Feature||Original Medicare||Advantage plans|
|Choice of doctor||A person can see any doctor who accepts Medicare without a referral or need to check a network.||The Advantage plan may require referrals or offer cost-savings for choosing in-network doctors.|
|Additional benefits||Original Medicare does not cover benefits such as dental, hearing, and vision.||Some Advantage plans may offer coverage for dental, hearing and vision.|
|Supplemental coverage||A person can get Medicare Supplement Insurance, also known as Medigap.||A person in an Advantage plan can not get a Medigap plan.|
|Out-of-pocket limits||Original Medicare does not have out-of-pocket spending limits, unless a person has a Medigap plan.||Many Advantage plans have out-of-pocket limits.|
In addition, not all Advantage plans are available in all states. According to the Kaiser Family Foundation (KFF), people in more than 70 counties cannot access an Advantage plan.
There are several types of Medicare Advantage plans, although the number of plans available depend on the companies offering the plans. For example, according to the KFF, almost a quarter of beneficiaries will have a choice of plans from more than 10 companies.
However, also according to the KFF, the number of available plans varies across the country, from fewer than 16 plans on average in non-metropolitan areas to more than 30 plans in a metropolitan area.
Listed below are five of the most common types of Advantage plans.
Health maintenance organization (HMO)
More than 60% of people who have an Advantage plan choose an HMO, according to KFF.
- By using the plan’s network of doctors, specialists, and medical facilities, a person can get discounted treatment.
- A person may have to pay the full price if they get health care from an out-of-network doctor, although there may be exceptions for urgent care and emergency visits.
- A person may need a referral from a primary care doctor to see a specialist.
Preferred provider organization (PPO)
According to KFF, more than 30% of all Medicare Advantage enrollees were in a PPO in 2019.
- The PPO preferred list of providers offers cost savings on healthcare treatment.
- A person does not generally need a doctor’s referral to see a specialist.
- The plan will usually cover a portion of non-preferred provider costs.
Special needs plans (SNPs)
- The plans are tailored to people with specific chronic medical conditions, such as heart failure, diabetes, mellitus, end stage renal disease, or HIV/AIDS.
- All plans offer prescription drug coverage.
- There may be extra services such as expanded prescription drug coverage or extended coverage for extra days spent in the hospital.
Private fee-for-service (PFFS)
- A person can use any Medicare-approved provider as long as the provider accepts the PFFS plan’s terms.
- Some PFFS plans may specify a doctor in or out of network.
- A PFFS plan may involve copays or co-insurances for costs.
Medical savings account (MSA)
- MSA plans are a combination of a high-deductible health plan and a savings plan.
- A person must meet their deductible before their insurance pays for many costs.
- A person does not usually have a preferred medical provider network.
- The MSA plans may offer additional benefits, such as dental, vision, and long-term care coverage.
Medicare Advantage plans generally include details of coverage. In comparing plans, a person may want to consider items such as:
- monthly premiums as well as copays, coinsurances, and deductibles
- sufficient coverage for a person’s health and medical conditions
- current insurance coverage
- in-network providers and facilities that match a person’s preferred providers
- star ratings that may indicate a plan’s quality
Online comparison tools
The Find a Medicare online tool allows a person to filter results by company, star ratings, and more. After finding potential companies, a person can go to the individual company’s website or call the company to request a plan quote.
Many companies offer plan comparison tools showing key differences in provider networks, costs, and prescription drug plan coverage.
A person can also call Medicare at 1-800-MEDICARE (1-800-633-4227) with questions or contact their State Health Insurance Assistance Program (SHIP).
What is the 5-star rating?
The Centers for Medicare and Medicaid Services (CMS) use evaluation tools to award Medicare Advantage plans a rating from 1–5 stars.
CMS publishes the ratings annually. The plans with prescription drug coverage are rated on 45 criteria, while plans without prescription drug coverage are rated on 33 criteria. According to CMS, nearly 5% of Advantage plans have 5 stars while 52% have at least 4 or more stars.
There are key times throughout the year when a person has various Advantage plan options, including enrolling in an Advantage plan, switching their plan, or returning to original Medicare.
- During the initial enrollment period, a person is first eligible for Medicare. The enrollment period is the 3 months before, the month of, and 3 months after they turn age 65.
- In the general enrollment period, from January 1–March 31, a person can switch between Advantage plans or return to original Medicare. However, a person cannot switch from original Medicare to an Advantage plan during this time.
- From October 15–December 7 a person can join, switch, or leave an Advantage plan during the open enrollment period.
A person may also qualify for special enrollment periods based on loss of coverage or changes in their residence. If a person has a question about special enrollment periods, they should call 1-800-MEDICARE (1-800-633-4227).
To be eligible for a Medicare Advantage plan, a person must be enrolled in original Medicare. They must also live in the plan’s service area and be a United States citizen, U.S. national, or lawfully present in the U.S.
End stage renal disease
End-stage renal disease (ESRD) is the final stage of chronic kidney disease.
If a person had an Advantage plan before developing ESRD they can keep the plan, and can also choose another Advantage plan with the same company.
However, after a person has ESRD, they may be eligible to enroll in an Advantage plan by participating in employer-related Advantage plans or by having a successful kidney transplant.
In addition, if there is a Medicare special needs plan (SNP) in a person’s area, they may be able to enroll in the plan if it offers coverage for ESRD.
Medicare Advantage costs vary depending on the plan details, including benefits and coverage. However, a person will continue to pay their original Medicare Part B premium to Medicare.
According to the KFF, the average Advantage premium in 2019 was $29 a month.
Medicare Advantage plans are an alternative to original Medicare that may offer expanded coverage and reduced costs related to services that Medicare does not cover.
There are various plans, although plan offerings are region-specific. If a person has specific questions related to choosing an Advantage plan, they can contact the plan or their state’s SHIP.