The best Medicare Advantage plan depends on a person’s medical and healthcare needs. Costs, in-network providers, and star ratings may help a person make their decision.

Original Medicare is a federal insurance plan. Medicare Part A is hospital insurance, and Medicare Part B is medical insurance. Medicare Advantage (Part C) plans provide the same coverage as original Medicare and are offered by private insurance companies.

In this article, we look at Medicare Advantage plans, in-network providers, and limitations. We also discuss Medicare Part D, which provides prescription drug coverage. Then we examine star ratings, enrollment options, 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.

A senior man sits on the couch with his granddaughter and thinks about how to choose a medicare advantage plan.Share on Pinterest
The best Medicare plan can vary based on an individual’s medical and healthcare needs.

Medicare Advantage plans are sold by private companies and combine the benefits of Medicare parts A and B. Some Advantage plans include a prescription drug (Part D) benefit.

The four most common Advantage plans include:

Other less-common plans include HMO point of service (HMO-POS) and Medicare medical savings account (MSA) plans.

Medicare Part D covers prescription drug benefits. It is offered by private companies, and each plan must offer the standard level of coverage set by Medicare.

Some Advantage plans include drug prescription coverage or a person may need to buy the coverage as a separate plan.

When the coverage is included in the Advantage plan, each plan’s coverage may be for various different prescription drugs. Each company provides a list, called a formulary, of those drugs.

The medications are also listed on different tiers, or levels, which reflect drug pricing. Some plans have more tiers than others, although a general example may include:

  • Tier 1 drugs: Lowest copay and mostly generic drugs
  • Tier 2 drugs: Medium copay and preferred, brand-name drugs
  • Tier 3 drugs: Higher copay and non-preferred, brand-name prescription medication
  • Specialty tier: Highest copay and high-cost prescription drugs

How do I enroll In Part D?

Medicare Part D is optional. However, a person cannot have an Advantage plan that includes prescription drug benefits and also have a separate Part D policy.

There are two enrollment periods for Part D:

The Medicare open enrollment is from October 15 to December 7, when a person can change or join a Part D plan.

The second enrollment period is from January 1 to March 31, during which time a person can change their Advantage plan, and the Part D coverage if it is included in their plan.

If a person does not enroll when they are first eligible, they may pay a late enrollment penalty. The penalty is generally paid for as long as the person has Part D.

What does Part D cost?

The costs for Part D includes the premium, deductibles, copays, and coinsurance.

According to the Kaiser Family Foundation (KFF), the basic monthly premium for Part D in 2020 is $32.74.

The Center for Medicare and Medicaid Services (CMS) have a star rating system for health plans to help people compare plans. The highest-rated plans get 5 stars.

The ratings are made available to the public, and a person can get more details about the performance data for Part C (Advantage) and Part D (prescription drugs) plans on this online page. The information may help a person compare plans and make the best choice for their needs.

The ratings are based on up to 45 factors, including:

  • quality of care and services
  • customer experience, and availability of service
  • plan performance, including any complaints
  • costs, including drug pricing

Medicare Advantage plans that include prescription drug coverage are rated on 45 performance and quality measures, while plans without the drug coverage are rated on 33 measures.

A person can find star ratings for each healthcare plan on the Find a Medicare Plan website. It includes details of ratings for separate conditions covered by various plans.

A person’s out-of-pocket costs for Medicare Advantage will depend on several factors, including premiums, deductibles, coinsurance, and copays.

In general, a person enrolled in an Advantage plan pays the Medicare Part B premium as well as the plan premium. However, some Advantage plans don’t have a premium and may pay part or all of the Part D premium.

If a person has to pay the Part B premium, the basic monthly premium is $144.60 in 2020. The premium may change depending on a person’s income, although this amount may vary with income.

There are several periods during which a person can enroll in an Advantage plan.

People are eligible for Medicare Advantage and Medicare Part D during the initial enrollment period, which starts 3 months before the month a person turns 65, includes the birthday month, and ends 3 months after a person’s birthday month.

In the Advantage open enrollment period from January 1 to March 31, a person can switch Medicare Advantage plans, drop the Advantage plan, or switch to original Medicare.

During the open enrollment period from October 15 to December 7, a person can do the following:

  • change from original Medicare to an Advantage plan
  • change from an Advantage plan to original Medicare
  • switch Advantage plans
  • join a Medicare Part D plan
  • switch Medicare Part D plans
  • drop Medicare prescription coverage

Medicare Advantage plans combine the benefits of original Medicare parts A and B and may include prescription drug coverage.

The best Advantage plan for a person will depend on several factors relating to their personal needs. These may include in-network providers, prescription drug coverage, star ratings, enrollment options, and costs.