Understanding Medicare Advantage

Why you can trust Insure.com

Quality Verified

At Insure.com, we are committed to providing the timely, accurate and expert information consumers need to make smart insurance decisions. All our content is written and reviewed by industry professionals and insurance experts. Our team carefully vets our rate data to ensure we only provide reliable and up-to-date insurance pricing. We follow the highest editorial standards. Our content is based solely on objective research and data gathering. We maintain strict editorial independence to ensure unbiased coverage of the insurance industry.

Medicare provides health insurance coverage to people 65 and over. It also covers Americans with disabilities who receive Social Security disability benefits for a period and people with end-stage renal failure.

Americans who are eligible for Medicare choose between Original Medicare and Medicare Advantage plans.

Understanding Medicare

Most Americans have Original Medicare, but the percentage of beneficiaries with Medicare Advantage increases annually. The Medicare Advantage program now makes up about 48% of all Medicare enrollment, according to an article by the Kaiser Family Foundation.

Key Takeaways

Nearly half of Medicare beneficiaries have a Medicare Advantage plan in 2022, according to the Kaiser Family Foundation.
Medicare Advantage insurers contract with doctors and facilities. Those providers and hospitals are considered in-network for those plans.
Providers who take Medicare don’t accept every Medicare Advantage plan, so it’s vital to check a plan’s provider network before signing up for a plan.
Medicare Advantage plans are usually either health maintenance organization (HMO) or preferred provider (PPO) plans.
Beneficiaries can make changes to Medicare Advantage coverage during the Medicare Annual Enrollment Period or the Medicare Advantage Open Enrollment Period.

Original Medicare has been around since 1965. It includes Part A and Part B. The federal government pays providers for Part A and B services. People with Original Medicare may also get Part D for prescription drug coverage, which private companies provide.

Meanwhile, Medicare Advantage, also called Part C, covers health services, as well as may include prescription drug benefits and supplemental benefits and added benefits such as vision, dental, hearing and,or, gym memberships.

Some Medicare Advantage plans also include transportation assistance and may cover meals (after a hospitalization — limitations and exclusions apply). Some plans also have telehealth support and reimburse for in-home services. Medicare Advantage plans may additionally provide long-term care benefits, which aren’t found in Original Medicare.

According to CMS, “Special Nees Plans (SNPs), provide benefits and services to people with specific diseases, certain health care needs, or who also have Medicaid. SNPs may cover added services for those eligible.” However, “You can only stay enrolled in an SNP if you continue to meet the special conditions of the plan.”

You can join an SNP plan if you meet these requirements:

You have Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance).
You live in the plan’s service area.
You meet the eligibility requirements for one of the three types of SNPs: Dual Eligible SNP (D-SNP), Chronic Condition SNP (C-SNP), Institutional SNP (I-SNP).

Major medical carriers make up a large portion of Medicare Advantage plans. However, in recent years, more insurers have moved into or expanded Medicare Advantage offerings.

This competition has led to dozens of choices for beneficiaries.

Types of Medicare Advantage plans

When comparing Medicare Advantage plans, you’ll want to understand the differences between benefit design. Let’s take a look at two common types of Medicare Advantage offerings.

Type of plan	Premiums	Deductibles	Network	Out-of-network care?	Require primary care physician?	Require PCP referral to see specialist
Health maintenance organization (HMO) plans	Lower than PPOs	About the same as PPOs usually	Restricted	HMO usually doesn’t pay for it	Yes	Yes
Preferred provider organization (PPO) plans	Higher than HMOs	Similar to HMOs	Wider network	PPO often pays portion of bill	No	No

*Note: Exceptions are made for emergent or urgently needed care

As you can see, PPOs usually cost more than HMOs, but PPOs also come with more flexibility. A PPO doesn’t usually require a referral to see a specialist and you can get out-of-network care, though it will cost more than in-network care.

Make sure to read the details before agreeing to a plan. You’ll want to understand a plan’s deductibles, coinsurance and out-of-pocket costs before signing up.

Which type of Medicare Advantage plan is better for you depends on your health care needs, finances and preferences.

How Medicare Advantage works

Medicare Advantage insurers cover you for health care. These plans contract with providers on payments and the federal government pays the private insurers monthly for the Medicare Advantage plans.

You’ll notice many similarities between a Medicare Advantage plan and an employer-sponsored plan. In both cases:

A private insurer handles the coverage.
You often choose between benefit designs, such as HMO and PPO plans.
You have a network of doctors and hospitals. Depending on your plan, you may or may not get any help paying health care costs if you receive out-of-network care that is not related to an emergency or urgently needed care.
You pay a co-pay at a doctor’s visit.
The provider bills the insurer, which pays its portion. You then pay your share depending on your deductibles, coinsurance and out-of-pocket costs.

Choosing a Medicare Advantage plan goes beyond merely looking at premiums.

How to choose a Medicare Advantage plan

The average Medicare Advantage plan premium can vary by plan and location, but many Medicare Advantage plans offer zero-premium plans. That doesn’t mean you should automatically pick a plan without premiums, though

“Before you enroll in [a Medicare] Advantage plan, it’s important to understand why these plans have low- to zero-dollar premiums,” said Engle. “They [may] come with many additional out-of-pocket costs in the form of copays, deductibles and coinsurance.”

Most Americans have multiple Medicare Advantage plan options available to them in their area and some states may have more plans than others. However, rural areas may have limited choices.

Another issue you may have with a Medicare Advantage plan is if you need care while traveling. Original Medicare covers you no matter where you are in the country as long as you choose a provider that accepts Medicare. That’s not always the case with Medicare Advantage. Instead, you might be out of the plan’s service area and you may need to get a primary care provider referral to see a specialist unless the care you need is in an emergency or urgently needed even if out of network..

Also, not all doctors take specific Medicare Advantage plans, so you want to check a plan’s provider network before signing up.

One other potential drawback for Medicare Advantage is that some plans require prior authorization before tests and treatments. In that case, your doctor needs health plan approval before getting some tests like MRIs.

There are pros and cons with both Medicare Advantage and Original Medicare. Compare those pros and cons when deciding on a plan.

When you can sign up for Medicare Advantage

You can sign up for Medicare Advantage when you become eligible for Medicare or if you have a qualifying disability that allows you to enroll prior to your 65^th birthday.

As you approach your 65th birthday, you’ll receive information from Medicare about your options. After that, you’ll be able to make changes each year to your plan during the Medicare Annual Enrollment Period, which runs from October 15 to December 7.

At that time, you can:

Move from Original Medicare to Medicare Advantage.
Change from Medicare Advantage to Original Medicare.
Swap Medicare Advantage plans.
Get a Medicare Prescription Drug plan if you have Original Medicare.
Change or cancel Part D plans.

There is also a Medicare Advantage Open Enrollment Period from January 1 to March 31. During that period, you can:

Change Medicare Advantage plans.
Switch from Medicare Advantage to Original Medicare.
Only change plans once during this period.

You can also make changes to your plans if you have a qualifying life event, which starts a special enrollment period. Those life events may include examples such as loss of employer group coverage or moving back to the U.S. from another country.. In those instances, you’re able to make changes to your Medicare coverage.

No matter what plan you choose, make sure you understand Medicare Advantage, compare costs and provider network and compare the pros and cons for each plan.

Medicare Advantage and Part D plans and benefits offered by the following carriers: Accendo, ACE-Chubb, Aetna Medicare, AFLAC, Allstate – National General, Anthem Blue Cross Blue Shield, Aspire Health Plan, Capitol, Centene Corporation, Cigna-HealthSpring, Dean Health Plan, Devoted Health, GlobalHealth, Health Care Service Corporation, Humana, Lumico – Elips, Manhattan Life – MAC, Molina Healthcare, Mutual of Omaha, Oscar Health Insurance, Premera Blue Cross, Medica Central Health Plan, SCAN Health Plan, Scott and White Health Plan now part of Baylor Scott & White Health, UnitedHealthcare®

Disclaimer:

Insure.com is not affiliated with or endorsed by the government or Federal Medicare program. Plans are insured or covered by a Medicare Advantage organization with a Medicare contract and/or a Medicare approved Part D sponsor. Enrollment in the plan depends on the plan’s contract renewal with Medicare. We do not offer every plan available in your area. Currently we represent 10 organizations which offer 100 products in your area. Please contact Medicare.gov, 1800-MEDICARE, or your local State Health Insurance Program (SHIP) to get information on all of your options. Not all plans offer all of these benefits. Benefits and availability may vary by carrier and location. Limitations and exclusions may apply. Every year, Medicare evaluates plans based on a 5-star rating system. Part B Premium give-back is not available with all plans. Actual Part B premium reduction could be lower. Deductibles, copays and coinsurance may apply. Enrollment in the described plan type may be limited to certain times of the year unless you qualify for a Special Enrollment Period.

MULTIPLAN_INHOWMAWK0124_M

Les Masterson

Contributor

Les, a former managing editor, insurance, at QuinStreet, has more than 20 years of experience in journalism. In his career, he has covered everything from health insurance to presidential politics.