Medicare Advantage is another namefor Medicare Part C. It is a private insurance alternative to traditional Medicare. Some people also call Medicare Advantage a “bundled” plan, as it incorporates services from Medicare parts A, B, and D.
Some Medicare Advantage plans even offer additional services that traditional Medicare does not provide.
This article provides details on which services Medicare Advantage covers and how it differs from traditional Medicare.
Medicare Advantage is an all-in-one plan that incorporates hospital treatments, physician visits, and, usually, prescription drug coverage.
As a general rule, Medicare Advantage costs less than traditional Medicare. However, Medicare Advantage plans often require a person to seek consultation with doctors who are on the plan’s preferred list of providers. These are known as “in-network” physicians.
Some Medicare Advantage plans also cover services that Medicare may not, such as dental, hearing, and vision care.
A person can take out a Medicare Advantage plan from a private insurance company. Medicare then directly pays the company a set amount to help fund a person’s healthcare costs.
People with Medicare Advantage often have higher out-of-pocket expenses than those with traditional Medicare, as Medicare Advantage plans usually have lower premiums.
People with a Medicare Advantage plan will have a yearly excess figure to meet. This refers to the amount of money they need to spend out-of-pocket on healthcare costs before the plan starts to cover the remaining expenses.
Thousands of different Medicare Advantage plans are available, and people in every region will have access to different plans. Each plan must coordinate with a network of healthcare providers in a specific area.
A person can find out which plans are available in their area by calling 800-MEDICARE (800-633-4227).
The law requires Medicare Advantage plans to cover the same services as traditional Medicare. This includes hospital and emergency care, as well as medical care from in-network providers.
These plans may also cover:
- dental care
- prescription drugs
A person may have to receive prior approval for a particular service to make sure that Medicare Advantage will cover it.
As well as considering what MedicareAdvantage plans cover, a person should also be aware of what they do not. Thiscan help them manage their expectations and avoid any surprising costs if theyneed treatment further down the line.
Most Medicare Advantage plans only cover care that a person receives inside the United States and will not cover treatment received in other countries. They also may not cover nonemergency services at facilities that are “out of network” for a person’s plan.
Medicare is an “a la carte” option. This means that a person can receive Medicare Part A, which includes hospital coverage, without paying a premium. This is available on the condition that they or their spouse meets specific requirements for working and paying Medicare taxes.
The other components of traditional Medicare include Medicare Part B and Medicare Part D.
Medicare Part B covers outpatient medical services, including doctor’s visits, durable medical equipment, and some procedures. Medicare Part D covers prescription drugs. A person can choose from several standardized options, depending on the medications they take and their budget.
A person with a traditional Medicare plan can also choose to purchase a Medigap policy. Medigap policies fund some out-of-pocket costs, such as copayments. However, a person cannot have both a Medicare Advantage plan and a Medigap policy.
Around 22 million of the 64 million people enrolled in Medicare have an Advantage plan, according to the Kaiser Family Foundation (KFF).
Choosing a Medicare Advantage plan is a personal decision. People often base their choice on the upfront cost and the services they would typically need while under coverage.
Some benefits of choosing a Medicare Advantage plan include:
Medicare Advantage can be more cost-effective than traditional Medicare. Many plans even have a $0 premium. However, a person would still be responsible for paying the Medicare Part B premium.
Some Medicare Advantage plans may charge a portion of the Part B premium. An estimated 60% of Medicare Advantage enrollees do not pay a prescription drug premium.
In contrast, those who do pay have premiums that average around $63 per month for prescription drugs, according to the KFF.
More expansive coverage
Medicare Advantage plans may cover services that traditional Medicare does not, including:
- dental care
- transportation assistance
- meal support
- prescription drug services
If a person regularly requires theseservices, the extra coverage can save them money.
A person can research the Medicare Advantage plans available in their area to determine which additional services they may like to receive.
Medicare Advantage even has Special Needs Plans for people with specific medical conditions, such as diabetes or congestive heart failure. This means that a person is more likely to receive coverage for necessary medications and services.
If a person is not happy with thefirst Medicare Advantage plan they choose, they can switch to a new one duringthe Medicare Advantage Open Enrollment Period. They can also choose to returnto traditional Medicare, should they wish.
A person should also consider some of the potential drawbacks of Medicare Advantage. That said, so many Medicare Advantage plans are available that some of the disadvantages below may not apply to all plans.
Medicare Advantage plans usually reduce costs by restricting choice. A person must choose from a list of providers or get referrals through their primary care provider. In contract, those with traditional Medicare can seek care from any provider who accepts Medicare.
Out-of-pocket costs may be higher with some Medicare Advantage plans. However, there is a yearly limit on these costs, which is not the case for traditional Medicare.
In 2020, insurance companies offered around 3,148 Medicare Advantage plans, according to the KFF.
The number of plans, insurance companies offering them, and people enrolled in them have all increased over time. This shows the popularity of Medicare Advantage plans as a combined option for Medicare.
If a person is considering enrolling in a Medicare Advantage plan, they should find out what plans are available in their area and start evaluating the plans by the healthcare services they tend to use, as well as potential costs.
Weighing up these and other factors can help them determine which plan may work best for their needs.
We will update the 2021 costs as soon as possible after the Centers for Medicare and Medicaid Services (CMS) have released them.
We last updated the costs on this page on October 13, 2020.