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Medicare Advantage Plans


Medicare Advantage plans are an all-in-one alternative to Original Medicare (Medicare Part A and Part B). Offered by private insurance companies, Medicare Advantage plans are one-year contract plans that combine Medicare Part A and Medicare Part B coverage with additional benefits to help you receive the healthcare benefits you require.

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Below we review what a Medicare Advantage plan is, who is eligible, and how you can benefit from the coverage.

What is a Medicare Advantage Plan? 

Medicare Advantage plans, also known as Medicare Part C plans, are health insurance plans offered through private insurance companies.

Medicare Advantage plans provide you with Original Medicare benefits plus additional benefits depending on the plan you enroll in.

In addition to hospital and outpatient coverage, Medicare Advantage plans typically cover additional benefits like:

  • Prescription drug coverage
  • Dental
  • Vision/hearing
  • Transportation
  • Gym memberships
  • Over-the-counter drug coverage
  • And more!

When you enroll in a Medicare Advantage plan, Original Medicare no longer pays your claim. The private insurance company you choose to enroll with is now responsible for paying your claims and deciding which doctors and hospitals you may use for care.

Each year, Medicare Advantage plan benefits change. Therefore, you are given an Annual Enrollment Period to change or drop Medicare Advantage for the upcoming year. During this time, it is essential to review any changed benefits and enroll in the plan that best matches your budget and health insurance needs. Any changes made during this time go into effect on January 1, of the next year.

In 2022, just over 40% of those enrolled in Medicare are enrolled in a Medicare Advantage plan. Each year, Medicare Advantage plans continue to improve, and more enrollees enter a Medicare Advantage plan. From 2020 to 2022, Medicare Advantage plans grew by an 18% increase in enrollment.

What are the Four Types of Medicare Advantage Plans?

All Medicare Advantage plans are different. While the core benefits remain the same, the costs, additional benefits, networks, and availability differs from plan to plan and from ZIP Code to ZIP Code. There are four main types of Medicare Advantage plans Available.

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The four types of Medicare Advantage plans are:

  • Health Maintenance Organization (HMO)
  • Preferred Provider Organization (PPO)
  • Private Fee-for-Service (PFFS)
  • Special Needs Plans (SNP)

Health Maintenance Organizations (HMO) is a type of Medicare Advantage plan that often has their own strict network of doctors and hospitals who agree to accept the plan as payment for healthcare services. Thus, you are not able to go anywhere for healthcare, you must abide by the network to receive coverage.

HMO plans are typically low-cost with low monthly premiums and copayments. However, the downfall is that there is no out-of-network care except for an emergency. Keep in mind, the insurance carrier you choose can determine if your care was emergent or not, so you may not receive coverage at all.

Preferred Provider Organizations is a different type of Medicare Advantage plan that also provide its own network of healthcare professionals who accept the plan as payment for services. However, compared to HMO plans, PPO plans are more flexible when it comes to out-of-network coverage. PPO Plans allow you to visit any provider. Yet, some providers may require higher copayments.

PPO plans often have higher costs than HMO plans due to the convenience of being able to see any physician who accepts Medicare Advantage.

Private Fee-for-Service plans are a type of Medicare Advantage plan that allows the most flexibility of all. PFFS plans have a contract with providers to allow you to pay a certain fee for the service performed.

Each PFFS plan is different depending on the carrier. The carrier may provide a network of physicians who accept the plan, or the plan may be accepted anywhere. Before using a PFFS plan, it is important to know if your plan requires you to follow a network or not.

Special Needs plans are a type of Medicare Advantage plan that only allow certain groups of people to enroll in coverage. You must meet specific criteria to be eligible to join an SNP plan.

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There are three types of SNP plans available:

  • Chronic Condition
  • Institutional
  • Dual Eligible

SNP Medicare Advantage plans are designed to best meet the needs of those enrolled. Depending on your special need, each SNP plan offers benefits tailored to your condition. Different SNP plans are available depending on your location. So, if you believe you qualify for an SNP plan, it is essential to work with a licensed Medicare insurance agent who can provide you with all your options.

Can I join a Medicare Advantage Plan?

To join a Medicare Advantage Plan, you must be enrolled in Original Medicare and have a valid enrollment period to join. When you enroll in a Medicare Advantage plan, there are never any health questions, so anyone can enroll in a plan regardless of their health.

The first chance you get to enroll in a Medicare Advantage plan happens during your Initial Enrollment Period. During this time, you have 7 months to join a Medicare Advantage plan. This enrollment period begins three months before your Medicare Part b start date, the month of, and three months following Part B enrollment.

If you miss this enrollment period, you can always join a Medicare Advantage plan during the Annual Enrollment Period in the fall. Keep in mind, you can only enroll in a Medicare Advantage plan or a Medicare Supplement plan. You can never have both plans for coverage.

How much Do Medicare Advantage Plans Cost?

Medicare Advantage plan costs differ between plans and carriers. This is because no two plans are the same. On average, a Medicare Advantage plan costs $18 per month. However, most plans have a $0 monthly premium. Yet, there are Medicare Advantage plans that can cost over $100 each month.

As you can see, the cost of a Medicare Advantage plan can vary drastically based on the plan you enroll in. However, one cost that remains constant is the Medicare Part B premium. When you enroll in a Medicare Advantage plan, you are still responsible for covering the Medicare Part B premium on top of your Medicare Advantage premium. Thus, the $0 Medicare Advantage plans are not exactly free-of-charge. You are still responsible for the monthly Medicare Part B premium.

Additionally, you will need to consider the plan’s copayments, deductible, and maximum out-of-pocket limit. These costs can be just as important as the monthly premium if you intend to use your coverage throughout the year.

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What is the Difference Between Original Medicare and Medicare Advantage?

Deciding between Original Medicare and Medicare Advantage can be a tough choice to make.

On one hand, the freedom of Original Medicare allows you to know that you will always be seen by the physician you wish, and you’ll never have to work with a provider network. On the other hand, Medicare Advantage plans allow you to receive more coverage through additional benefits you may not have with Original Medicare.

The chart below provides a side-by-side comparison of the main benefits of a Medicare Advantage plan and Original Medicare.

Medicare Plan Types Original Medicare Medicare Advantage Plan
Doctor network You can see any doctor or hospital that accepts Original Medicare nationwide.  In many cases, you may only see doctors and hospitals in your plans network and service area.
Referral You do not need a referral to see a specialist You may need a referral to see a specialist
Out-of-pocket costs Predictable out-of-pocket costs Out-of-pocket costs vary depending on your plan
Maximum costs No yearly out-of-pocket maximum There is a set maximum out-of-pocket limit that you cannot exceed
Medigap eligibility Can purchase Medigap to cover leftover costs Ineligible for Medigap coverage
Covered Services Covers inpatient and outpatient services Covers inpatient and outpatient services plus additional benefits
Medicare Part D eligibility You can enroll in a separate Medicare Part D plan You must enroll in the prescription drug plan attached to your Medicare Advantage plan (unless on PFFS plan)

As you can see, both options have their pros and cons. So, it is essential to compare each plan to your healthcare needs to determine which plan is right for you.

Do Doctors prefer Medigap or Medicare Advantage Plans?

There are many misconceptions when it comes to providers preferring one form of payment over another when it comes to insurance. However, the biggest factor when it comes to physicians preferring one plan type over another is the carrier the plan is through.

Many physicians do not prefer Medicare Supplement (Medigap) to Medicare Advantage and vice versa. Yet, they are more concerned about the plan’s carrier. This is because some carriers have a bad reputation when it comes to paying claims on time or at all.

When it comes to Medigap or Medicare Advantage, you will have more luck finding a provider who accepts Medigap over Medicare Advantage due to networks. With a Medigap plan, you can see any provider who accepts Original Medicare regardless of the carrier you choose. This means you’ll never have to ask if your plan is accepted.

Medicare Advantage plans, however, do not offer this luxury. Often, you will need to check that a provider accepts your plan before receiving any medical services. If they are not covered, you will have to pay out-of-pocket for the performed services.

Can You Switch from Medicare Advantage to Medicare Supplement?

If you are enrolled in a Medicare Advantage plan and wish to switch to Medicare Supplement, there are a few steps you must take.

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First, you will need a valid enrollment period to leave your Medicare Advantage plan. To disenroll from a Medicare Advantage plan, you must:

If one of the above applies to you, you can leave your Medicare Advantage plan and return to Original Medicare.

Once you are back on Original Medicare, you may apply to enroll in a Medicare Supplement plan. Keep in mind, you may need to answer underwriting health questions when you apply for a Medigap plan.

In some cases, however, you may qualify for Guaranteed Issue rights to enroll in a Medigap plan without answering underwriting health questions. This means you will not be denied coverage based on pre-existing health conditions. Guaranteed Issue rights are rare but very helpful under the right circumstances.

Do You Have to Pay for Medicare Part B if you Have Medicare Advantage?

Another misconception about Medicare Advantage plans is that you do not need to pay the Medicare Part B premium when you enroll in a plan. However, this is not true. As long as you are enrolled in Medicare, you will be required to pay the Medicare Part B premium. Thus, when you see a zero-premium Medicare Advantage plan, this is not actually the case. You will still be responsible for the Medicare Part B monthly premium.

There are certain Medicare Advantage plans that can offer a Medicare Part B premium reduction benefit. However, this is not a common benefit of a Medicare Advantage plan and is only available in some areas.

How to Enroll in Medicare Advantage

Enrolling in a Medicare Advantage plan is as simple as choosing your plan and completing the application form. However, deciding which Medicare Advantage plan to enroll in is a more complex aspect. To best determine the plan for you, it is important to compare all the plan options that are available to you. This is where we come in.

At MedicareFAQ we have access to all the carriers in your area. Meaning, you do not need to contact each carrier individually to compare plans. Our team of licensed Medicare agents helps you compare all of the top carriers and help you understand which Medicare Advantage plan may be right for you. Then, we walk you through the enrollment process to ensure you do not miss any steps along the way.

To receive your free side-by-side plan comparison, give us a call at the number above. Can’t call now? Complete our online rate form to review your options today!

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Sources:

MedicareFAQ is dedicated to providing you with authentic and trustworthy Medicare information. We have strict sourcing guidelines and work diligently to serve our readers with accurate and up-to-date content.

  1. Medicare Advantage in 2022 Enrollment Update, KFF. Accessed August 2022.
    https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2022-enrollment-update-and-key-trends/
  2. How Medicare SNP Plans Work, Medicatre. Accessed August 2022.
    https://www.medicare.gov/types-of-medicare-health-plans/how-medicare-special-needs-plans-snps-work

Jagger Esch

Jagger Esch is the Medicare expert for MedicareFAQ and the founder, president, and CEO of Elite Insurance Partners and MedicareFAQ.com. 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.

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