Medicare Advantage, also called Part C plans or MA plans, are offered by private insurers that have been approved by Medicare. This type of coverage is another way to get both Part A and Part B coverage, and potentially additional coverage as well. For example, many Medicare Advantage plans also include Part D, or prescription drug coverage, as well as fitness, medical transportation, vision, and dental coverage. As these plans are offered by private companies, the exact benefits available will vary.
In contrast, Original Medicare only includes Part A and Part B. Medigap, another Medicare-approved option provided by private insurance companies, can be purchased to bolster Original Medicare coverage. These plans may cover some of the costs that are not covered in Original Medicare, but unlike Medicare Advantage plans, they do not necessarily offer additional benefits.
Medicare Advantage vs. Other Medicare Options At a Glance
|Feature||Medicare Advantage||Original Medicare||Medicare Supplement (Medigap)|
|General coverage||Covers all medically necessary services of Original Medicare, and may include more, such as dental, vision, and hearing||Covers most medically necessary services||Can fill some coverage gaps in Original Medicare plans|
|Part A: hospital coverage||Yes||Yes||Supplements Part A benefits|
|Part B: medical coverage||Yes||Yes||Supplements Part B benefits|
|Part D: drug coverage||Dependent on insurer and plan||No||No|
|Out-of-network coverage||Dependent on plan||No||No|
|Premiums||One premium||Part A is commonly premium-free; separate premium for Part B||Separate premium in addition to Original Medicare|
|Deductibles||Dependent on insurer and plan||Separate deductible for Parts A and B||Helps pay Original Medicare deductibles; excludes Part B deductibles for those who became eligible for Medicare after January 1, 2020|
|Copays||Dependent on insurer and plan||None||None|
|Coinsurance||Dependent on insurer and plan||20%||Helps pay Original Medicare coinsurance|
|Out-of-pocket costs||Annual limit, after which you don’t pay||No annual limit on costs||Helps pay Original Medicare out-of-pocket costs|
How Medicare Advantage Works
Medicare Advantage plans are designed to take the place of Original Medicare, whereas Medigap plans are designed to add onto Original Medicare. This means beneficiaries may have a Medicare Advantage plan by itself, Original Medicare by itself, or Original Medicare with Medigap.
Medicare Advantage is essentially a bundle of Medicare coverage. The bundle includes Part A and Part B coverage at minimum, and often includes Part D. Medicare Advantage cannot be combined with any other plan, except in specific circumstances when it may be combined with a stand-alone Medicare drug plan.
If you are eligible for Original Medicare, you are eligible for Medicare Advantage, and you can enroll when you first become eligible or switch to an MA plan during one of the dedicated enrollment periods. Unlike Original Medicare, which is accepted anywhere Medicare is accepted, many Medicare Advantage plans have dedicated networks of healthcare providers. Policyholders must seek care from those within the network to have their healthcare services covered.
Also unlike Original Medicare, many MA plans feature copays, which are flat fees charged every time you seek healthcare, such as when you go to a doctor’s appointment or pick up a prescription. As Medicare Advantage plans are offered by private insurers, these copay amounts — along with coinsurance, premium, deductibles, and more — vary based on the insurance company and specific plan chosen.
Pros of Medicare Advantage
- Medicare Advantage plans offer the ease of having a single plan and premium for all your Medicare coverage. This can make it easier to identify what services are covered since you don’t need to manage your information across multiple plans or parts.
- Since Medicare Advantage plans tend to cover additional services and costs, they can bring total out-of-pocket costs down. For example, some plans — in addition to covering vision, hearing, and dental — may cover the costs of fitness or wellness programs, transportation to your doctor, preventative care, and medication.
- Tailored care is another benefit of MA plans. In many cases, those with pre-existing conditions can have their Medicare Advantage plan tailored to their specific health needs — this can provide coverage for services that may not be available with Original Medicare and can aid in managing chronic conditions.
- Those who expect to have more medical needs each year may find their out-of-pocket costs more affordable with Medicare Advantage. The annual limits, which Original Medicare does not have, can help those enrolled from paying an unlimited amount of out-of-pocket costs as long as your healthcare needs do not require numerous copays or meeting high deductibles.
Cons of Medicare Advantage
- While there may only be one premium, some plans may cost more than an Original Medicare plan, even with Part D or Medigap additions. If you don’t have any prescriptions, don’t expect to use the coverage often, or don’t require additional medical care for a condition, you might save money with Original Medicare.
- You cannot have a Medigap policy to help cover any out-of-pocket costs, such as copays. If many of your healthcare services require copays, these can add up over time.
- Many Medicare Advantage plans may require referrals, for example, even for emergency services. This can make it challenging to get quick access to care. You may also find that while you can get care out of your MA plan’s network, it’s much more costly, limiting overall options for care.
- Because Medicare Advantage providers can set their own rules, they may also change their payment structures, annual limits, or other rules over time. This means that available services and the associated costs can change from year to year.
What to Consider When Choosing a Medicare Advantage Plan
When choosing a Medicare Advantage plan, there are cost factors other than the premium to consider. You may also want to consider the specific copay costs and deductibles, as well as potential coinsurance costs. While an MA plan may have a low premium, the other associated costs may be more significant than you’d like. To determine what you might pay, you could compare your previous year’s medical services to the MA plan’s out-of-pocket costs. That would provide a baseline for how much you could expect to pay if your health stayed the same.
In addition to costs, it’s important to consider the structure of your Medicare Advantage plan. The most common types of MA plans include:
- Health Maintenance Organization (HMO) Plans
- Preferred Provider Organization (PPO) Plans
- Private Fee-for-Service (PFFS) Plans
- Special Needs Plans (SNP)
Each type of plan has different cost structures, rules for referrals and primary care, and prescription coverage, making Medicare Advantage coverage customizable. To figure out what’s right for you, think about the type of care you currently need and the care you might expect to need in the future.
For example, HMOs tend to require care within your provider’s network. PPO plans reward you with more favorable costs when you use in-network doctors and hospitals, but you typically have the flexibility to use out-of-network care. PFFS plans are based on specific fee structures for services, with out-of-network services costing more. Finally, SNPs are limited to people with particular conditions or medical needs and offer tailored benefits.
Medicare Advantage plans often offer additional benefits that may not be covered under Original Medicare. Look into what each plan you’re considering will cover to choose the one that best meets your healthcare needs, such as prescription drug coverage, lower specialist copays, or a wider health provider network.
How to Switch to a Medicare Advantage Plan
When you’re ready to enroll, you need your Medicare number and the date that your coverage started. Each MA plan should have a corresponding website you can visit, which reveals whether there is an online application. If there isn’t, you can fill out a paper application and mail it to your provider of choice. You can also call the plan provider or call Medicare at 1-800-MEDICARE.
Making Medicare Advantage Your First Medicare Plan
When you first become eligible for Medicare, you may apply directly for Medicare Advantage. You may choose to do this if you already have a good idea of the coverage you want.
You can sign up for an MA plan during your initial enrollment period, which is a 7-month period starting 3 months before the month of your 65th birthday and ending 3 months after your birthday month. You must have Part A and B to enroll in an MA plan, but you can do both during initial enrollment. Coverage begins either the day of your birthday or the first of the month after you request coverage, depending on when you enroll.
Changing From Original Medicare to Medicare Advantage
- Enrollment for first-time Medicare Advantage begins October 15
- MA enrollment closes on December 7
- Coverage begins January 1 of the following year
If you’ve had Original Medicare for a while, you may decide that you want to switch to a Medicare Advantage plan. This may be to save money or manage your premiums easier, among other reasons. To enroll, you need your Medicare number and initial enrollment date. Then, you can choose the provider you wish to enroll with.
Changing From Medigap to Medicare Advantage
- To drop Medigap and switch to an MA plan, you must wait until October 17 when open enrollment begins
- Open enrollment closes on December 7
- Your new coverage begins the following January 1
You may decide that Medigap is no longer providing the type of coverage you want with your Original Medicare. You may not use it enough to justify the cost, yet still want something in place to help mitigate costs. In this case, switching to a more comprehensive Medicare Advantage plan may make sense.
Changing From One Medicare Advantage Plan to Another
- If you’re making changes to an existing MA plan, including switching providers, open enrollment begins January 1
- Open enrollment for existing MA plan enrollees ends March 31
- You can also make adjustments within the first 3 months after getting Medicare and having an MA plan
- Coverage takes place on the first of the month after the provider receives your application
If you get a Medicare Advantage plan and decide you want different coverage, you have the option to change to a new MA plan. Doing so may change your payment structure, add additional benefits, or remove benefits you don’t use. This can help you customize your coverage and make it more efficient.
Medicare Advantage has a different enrollment period than Original Medicare after you enroll in your first MA plan. Otherwise, you’re subject to the same enrollment period.