Medicare Advantage: What You Need to Know

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Russell Noga
by Russell Noga | Updated June 24th, 2024

When you first become eligible to start receiving Medicare benefits, one of the very first—and arguably the most important—decisions that you’re going to need to make is which type of Medicare you should choose: Original Medicare or Medicare Advantage. According to the latest data, nearly half of all Medicare beneficiaries opted for Medicare Advantage. But what is Medicare Advantage? How does it work? To help you make the most informed decision, below, we’ve provided the answers to these and other key questions and facts about Medicare Advantage.

What is Medicare Advantage?

Medicare is comprised of several different parts. Part A provides coverage for inpatient care, such as in hospitals, hospices, and skilled nursing facilities, as well as some home health care. Part B provides coverage for outpatient care, such as doctor’s appointments and preventative services, as well as durable medical equipment. Part A and Part B combined are referred to as Original Medicare. Beneficiaries of Original Medicare can decide which doctors and medical facilities that accept Medicare they would like to use. You can also purchase Medicare Supplement Insurance (also known as Medigap) to cover the out-of-pocket expenses that Original Medicare doesn’t cover.

Medicare Part C, also known as Medicare Advantage, is a bundled form of Original Medicare; in other words, it includes coverage for both Part A and Part B. Other benefits may also be included, such as vision and dental, and most Medicare Advantage plans also include Medicare Part D, which provides coverage for prescription drugs. Most Medicare Advantage plans do not charge a premium, though beneficiaries are responsible for the Part B monthly premiums (unless you opt for a plan that features a Part B give-back benefit, which will cover all or a portion of the premium for Part B).

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How Medicare Advantage Works

Medicare Advantage plans work in the same manner as traditional health insurance plans. You get to choose a private health insurance plan to cover expenses related to Medicare Part A and Medicare Part B. Most plans offer additional benefits, as well. There is also a network of healthcare providers that you will have to use in order to have your health-related expenses covered. Typically, you’ll pay for the health care you require as you receive it via deductibles, coinsurance, and copays.

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Types of Medicare Advantage Plans

There are several types of Medicare Advantage Plans, which include the following:

  • Health Maintenance Organization. Health Maintenance Organization or “HMO” plans cover the health care and services that providers offer within a set network. If you receive care or services outside of the set network, usually, you’ll be required to pay for the entire cost out of your own pocket.
  • HMO Point-of-Service. HMO Point-of-Service (HMO-POS) plans are a variation of an HMP plan. You are permitted to see providers outside of your network; however, you will have to pay a higher price for the out-of-network care that you receive. Additionally, separate deductibles for both in- and out-of-network charges are imposed.
  • Preferred Provider Organization.With Preferred Provider Organization (PPO) plans, the charges you incur when you see healthcare providers that are within your plan’s network; the cost for seeing providers outside of your network will be higher. Depending on your plan, you may or may not have to pay an annual deductible.
  • Private Fee-for-Service. Private fee-for-service (PFFS) plans may be network-based, or they may not be, depending on your specific plan. Non-network healthcare providers may be required to accept Medicare reimbursements, as well as the terms and conditions that are specified by your plan. Most PFFS plans do not offer prescription drug coverage. This is the least common type of Medicare Advantage plan.
  • Special Needs Plan. Special Needs Plans (SNPs) offer customized coverage that is designed to meet the health care needs of each individual beneficiary. For example, if you have diabetes, an SNP Medicare Advantage plan would include coverage for diabetic care.
  • Medical Savings Account. Medical Savings Accounts (MSAs) are a blend of a high-deductible plan and a dedicated savings account. The funds that you’ll require for health care are deposited into your MSA account each month. MSAs don’t offer prescription drug coverage and they are very rarely offered.

Of the different types of Medicare Advantage plans, HMOs are the most popular. While they may not offer as much choice in terms of the health care professionals that you can see, but out-of-pocket expenses tend to be lower than other types of plans that offer more options, such as PPOs.

What Does Medicare Advantage Cover?

As per federal law, all Medicare Advantage plans are required to offer the same healthcare services as Original Medicare; inpatient and emergency care, as well as outpatient care. These plans also offer additional coverage that Medicare Part A and Part B don’t offer, such as:

  •       Dental care
  •       Vision care
  •       Prescription lenses
  •       Hearing
  •       Prescription drugs
  •       And more

The specific type of coverage a Medicare Advantage plan will offer varies and depends on the specific type of plan that you select.


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The Advantages of Medicare Advantage

The primary benefit of Medicare Advantage is that these plans offer additional coverage beyond what Original Medicare provides; hearing, dental, vision, etc. In 2022, beneficiaries of Medicare Advantage received additional benefits in the amount of an estimated $2,000 beyond the amount that Original Medicare provided.

Another benefit of Medicare Advantage is that there is a yearly cap on out-of-pocket expenses, which isn’t the case for Original Medicare. Once you have reached the max amount, any other services that you receive that are covered by Medicare Part A and Part B will be covered by the insurer, in full, for the remainder of the year.

Frequently Asked Questions

What is Medicare Advantage (MA)?


Medicare Advantage, also known as Medicare Part C, is a type of health insurance offered by private insurance companies approved by Medicare. It provides an alternative way to receive your Medicare benefits, combining Part A (hospital insurance) and Part B (medical insurance) coverage.


How does Medicare Advantage differ from Original Medicare?

Medicare Advantage differs from Original Medicare (Part A and Part B) in that it is offered by private insurers. It usually includes additional benefits beyond Original Medicare, such as prescription drug coverage (Part D), dental, vision, hearing, and wellness programs.


Who is eligible for Medicare Advantage?

To be eligible for Medicare Advantage, you must be enrolled in both Medicare Part A and Part B. You must also live in the service area of the Medicare Advantage plan you wish to join.


When can I enroll in a Medicare Advantage plan?

You can enroll in a Medicare Advantage plan during your Initial Enrollment Period (IEP) when you first become eligible for Medicare. Additionally, there are specific enrollment periods, such as the Annual Enrollment Period (AEP) from October 15 to December 7, and Special Enrollment Periods (SEPs) for qualifying life events.


What are the types of Medicare Advantage plans available?

Medicare Advantage plans come in various types, including Health Maintenance Organization (HMO) plans, Preferred Provider Organization (PPO) plans, Private Fee-for-Service (PFFS) plans, Special Needs Plans (SNPs), and Medical Savings Account (MSA) plans.


What does Medicare Advantage Plan G cover?

Medicare Advantage Plan G, also known as Medicare Advantage Plan G, covers all the benefits of Original Medicare (Part A and Part B). It may also offer additional benefits, such as prescription drug coverage and other services, depending on the specific plan.


What does Medicare Advantage Plan N cover?

Medicare Advantage Plan N also provides coverage for all the benefits of Original Medicare (Part A and Part B). However, you may be responsible for copayments and coinsurance for certain services, such as doctor visits and emergency room visits.


What are the advantages of Medicare Advantage?

Medicare Advantage plans often offer additional benefits beyond Original Medicare, such as prescription drug coverage, preventive services, and wellness programs. Many plans also include out-of-pocket maximums, which limit your annual healthcare expenses.


What are the disadvantages of Medicare Advantage?

Medicare Advantage plans may have more limited provider networks, and you may need referrals to see specialists. Additionally, plan benefits can change each year, and you may need to switch plans if your current plan no longer suits your needs.


How do I choose between Medicare Advantage Plan G and Plan N?

When choosing between Plan G and Plan N, consider your healthcare needs and budget. Plan G may have higher premiums but lower out-of-pocket costs, while Plan N may have lower premiums but require copayments for some services. Evaluate the coverage and costs of each plan to make an informed decision.


Is Medicare Advantage Right for You?

If you recently turned or will be turning 65 soon and you believe that Medicare Advantage is the right option for you, it’s important to compare quotes before making your final decision. To receive quotes from the most reputable insurance companies, fill out the form to the right or dial 1-888-891-0229 to speak to an experienced agent.

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