Medicare Advantage, also known as Medicare Part C, is an alternative to Original Medicare. When you enroll in a Medicare Part C plan, your benefits are offered and administered by a private insurance company and these private insurance companies must comply with many rules and regulations set by the Medicare program. So whether you’re already in a Medicare Advantage plan, curious about them, or you’ve never heard of them, this in depth guide is for you.
To qualify for Medicare Advantage, you must be enrolled in Original Medicare Parts A and Medicare Part B. You also must continue to pay your Part B premium in order to keep your Medicare Advantage coverage.
There are no age restrictions for Medicare Advantage plans. If you’re enrolled in Part A and B before age 65 due to a disability or chronic condition, you’re still eligible for Medicare Advantage coverage.
If you’re turning 65, you can enroll in Medicare Advantage during your Initial Enrollment Period (IEP). Your IEP lasts for 7 months, which begins 3 months before your 65th birthday, includes that birthday month, and ends 3 months after you turn 65.
If you’re interested in signing up for a Medicare Advantage plan, there are three ways to do it. You can sign up for Medicare Advantage during your initial enrollment period around your 65th birthday, or during an annual enrollment period afterward. If you’re enrolled in Medicare Advantage and want to change to a different MA plan, you can take advantage of the Medicare Advantage open enrollment period.
If you’re under 65, your first chance to enroll in Medicare Advantage starts:
The Medicare Open Enrollment Period, also called the Medicare Annual Enrollment Period or Annual Election Period, is a good time to decide whether Medicare Advantage or Original Medicare is right for you.
Keep in mind that Medicare Advantage plan benefits can change annually. So if you have a MA plan, you should check to make sure the plan still meets your needs.
Here are the actions you can take during AEP:
You may also be able to enroll in a Medicare Supplement plan if you drop your Medicare Advantage coverage during AEP.
If you’re enrolled in a Medicare Advantage plan, you have access to another enrollment period beyond AEP: The Medicare Advantage Open Enrollment Period (MA-OEP).
MA-OEP runs from January 1 to March 31 of each year. During the MA-OEP, you can:
It’s important to keep in mind that the MA-OEP is only for people who already have a Medicare Advantage plan. If you change plans during the MA-OEP, your new coverage will be effective on the first day of the month after you enroll.
Medicare Advantage health care plans work like the employer-sponsored health insurance plans you may be used to from your previous or current job.
Medicare Advantage plans provide comprehensive coverage, and you usually need to stay in-network to receive care. You’ll typically have some out-of-pocket expenses when you receive services and procedures under your Medicare Advantage policy. These costs typically come in the form of copayments or coinsurance that you’ll pay to your provider when you receive care.
An important point to remember is that all Medicare Advantage plans have an annual out-of-pocket (OOP) maximum that limits the total amount you can spend in any year. But you do not have an OOP with Original Medicare.
What are the benefits and drawbacks of Medicare Advantage? There are pros and cons to having this type of plan. Let’s take a look at them:
Advantages of Medicare Advantage:
Disadvantages of Medicare Advantage:
The primary difference between these programs is that Medicare Advantage is an alternative to Original Medicare. When you join a Medicare Part C plan, you no longer receive your Medicare benefits through Original Medicare.
Medicare Advantage plans are offered and administered by private insurance companies. But these private insurance companies must comply with many rules and regulations set by the Medicare program.
Medicare Advantage plans provide coverage that matches Original Medicare Parts A and B. Generally speaking, your Medicare Advantage plan will cover the same service or procedure as Original Medicare. But there is one exception to this rule, which we’ll cover below.
Medicare Advantage plans cover the following services.
Medicare Part A covers services that take place in healthcare facilities or institutions like:
Note: Hospice care is usually not covered by Medicare Advantage plans. Instead, hospice care is covered under Original Medicare, even if you’re enrolled in a Medicare Advantage plan. However, a new test program in 2021 will explore Medicare Advantage plans providing hospice benefits.
Medicare Part B services and procedures are considered more routine and non-emergency in nature than Part A. Common Medicare Part B services include:
As mentioned, Medicare Advantage plans cover all of these services with the exception of hospice care.
When considering Medicare Advantage pros and cons, it’s essential to take extra benefits that Medicare Advantage could offer to you. Many of these benefits are not provided through Original Medicare.
Note: Medicare Part C plans have the ability to choose which, if any, extra benefits to offer. These insurance companies may also make changes to their Medicare benefits and offerings each year.
There are 6 types of Medicare Advantage plans, including:
You should consider enrolling in Medicare Advantage if:
Medicare Advantage plans have several costs associated with them. Before we dive into each cost, it’s important to remember that you always have to pay your Part B premium in order to have Medicare Advantage.
Now, some Medicare Advantage plans offer a benefit that covers part, or all, of your Part B premium. But check the plan benefits closely to see if this is offered by a specific Medicare Advantage plan.
Beyond this Part B premium, you might face the following Medicare Advantage plan costs:
You might have a monthly premium for your Medicare Advantage plan, but many plans do not have them. If they do, these premiums tend to be low.
Some Medicare Part C plans have an annual deductible, but again, many do not. If your plan does have an annual deductible, this means you’ll have to pay a certain amount before the plan begins paying benefits. Note that there may be separate deductibles for drug coverage and medical benefits.
Beyond premiums and deductibles, the most common expenses you’ll have with Medicare Advantage plans are copayments and coinsurance. These two terms are referred to as “cost-sharing.” This is what you’ll pay out of pocket when you receive covered services. All the amounts you pay during the year count towards your annual out-of-pocket cap.
Let’s look at 3 examples of how these Medicare Advantage costs work in a Medicare Advantage HMO plan.
(Note: These costs are not the actual costs for any specific plan, but rather, in the range of costs for plans that you may have access to.)
Scenario 1: Medicare Part B Services
Scenario 2: Medicare Part A & B Services
You experience the symptoms of an irregular heartbeat, so you’re admitted to the hospital as an inpatient. You spend two nights in the hospital.
Scenario 3: Cancer
You’re diagnosed with a treatable cancer, and you’re given chemotherapy.
Medicare Advantage plans can be a great way to manage your out-of-pocket spending while enjoying extra benefits we covered, if you qualify. And they can offer some compelling advantages over Original Medicare, depending on your healthcare needs.
So if you'd like to learn more about Medicare Advantage plans in your area, call 800-620-4519 to reach a licensed insurance agent who may be able to guide you to the right plan for your needs. You can also try our online Medicare plan comparison tool.