What is a Medicare Replacement Plan?

The term Medicare replacement plans is not new and is rather common among Medicare enrollees. Usually, people use this phrase to refer to Medicare Advantage plans. When you enroll in Medicare Advantage coverage, Original Medicare (Medicare Part A and Part B) no longer pays your health benefits. Thus, you may think that your Advantage plan is replacing your Original Medicare benefits.

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In reality, Medicare Advantage plans do not replace Original Medicare, but these plans combine Original Medicare benefits with additional coverage to provide you with an all-in-one healthcare plan.  

Below we help you understand the misconceptions of a Medicare replacement plan and explain how exactly the plans work to provide you with healthcare coverage.

How Does a Medicare Replacement Plan Work?

Medicare Advantage, or Medicare Part C – often coined Medicare replacement plans – stand in place of your Original Medicare benefits for 12 months. They don’t act as a permanent replacement, and you can always return to Original Medicare during the Medicare Advantage Open Enrollment Period or Annual Enrollment Period.

These plans provide benefits through a private insurance company rather than through Medicare. Once enrolled, you must use the plan’s network of providers and hospitals to be covered. To be eligible for an Advantage plan, you must enroll in Medicare Part A and Part B of Medicare.

Does a Medicare Advantage Plan Replace Medicare?

No, a Medicare Advantage plan does not technically replace Medicare. However, it acts as your primary coverage. Medicare pays private insurance companies offering Advantage plans to handle beneficiary claims and benefits on their behalf.

Medicare Part C policies must offer the same benefits as Medicare Part A and Part B. Yet, these plans often provide additional services and perks, including coverage for prescription drugs, dental, vision, and hearing plans, free gym memberships, and more. Benefits vary depending on plan and carrier.

If you enroll in an Advantage plan, be sure to review your Summary of Benefits. This document will let you know what’s not covered, as well as list copay amounts, deductibles, and premiums for which you’ll be responsible.

Additionally, your benefits are subject to change each year. As an Advantage enrollee, you’ll want to keep your eyes out for your Annual Notice of Change letter to make sure you’re still happy with your plan. You should expect to get this letter in September, right before the Annual Enrollment Period.

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Suppose you are unhappy with the changes to your plan. In that case, the Annual Enrollment Period allows you to make any necessary changes to your plan that will go into effect on January 1 of the following year.

What is the Best Medicare Replacement Plan?

The best Medicare Advantage plan for you depends on your needs. Furthermore, it depends on if you would benefit from enrolling in an Advantage plan at all. When deciding, consider how the downsides to Medicare Advantage plans would affect you.

Some find Advantage plan networks restrictive and often pay more than they save in out-of-network copays. On the other hand, those who don’t need to visit many doctors enjoy having one plan for all their needs and spending less than they would for a Medicare Supplement plan (Medigap).

If you’re considering enrolling in an Advantage plan, be sure to go with a top-rated carrier. Also, ensure that you’re familiar with how the plan you’ve chosen works.

How to Get Help Understanding Medicare Replacement Plans

To review your options and decide whether a Medicare Advantage plan is best for you, our licensed agents are here to help! You can get in contact with one of our Medicare experts today by completing our online rate comparison form or by calling the number above to receive rates and information in your area.

Jagger Esch

Jagger Esch is the Medicare expert for MedicareFAQ and the founder, president, and CEO of Elite Insurance Partners and Since the inception of his first company in 2012, he has been dedicated to helping those eligible for Medicare by providing them with resources to educate themselves on all their Medicare options. He is featured in many publications as well as writes regularly for other expert columns regarding Medicare.

18 thoughts on “What is a Medicare Replacement Plan?

  1. My 42 y/o so is a Type I diabetic. He is in desperate need of a continuous glucose monitor due to critically sporadic low blood sugars. He is covered on his wife’s health plan at work. His secondary is Medicare. His wife’s Cigna’s said they will cover only 20% of the cgm cost, and that’s only after he reaches his yearly $7500 deductible. Medicare wont cover it because he has a primary insurance. Would an Advantage plan cover the costs associated wit this monitor and monthly sensors? Thank you, Lynne

    1. Hi Lynne! Thank you for your question! Medicare Advantage plan benefits are decided by the carrier, so what you pay out of pocket for each service will be different for each carrier. For example, you could pay $100 out of pocket with Cigna for a CGM, but you may only pay $20 out of pocket with another carrier for the same CGM. The only way around this is if you make Medicare his primary coverage, assuming his employer has more than 20 employees. If you make his Medicare coverage primary, you shouldn’t have that deductible to meet. I would suggest speaking to his benefits administrator to see what all his options are and to make sure his employer coverage is considered creditable under Medicare. I hope this helps!


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