What is Medicare Advantage?

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In a Medicare Advantage Plan, sometimes call Medicare Part C, a private health insurance plan approved by Medicare, members get their care from a network of doctors and hospitals. Advantage plans are private health insurances plans approved by Medicare where Medicare pays the plan a monthly amount for your care. The plans then pay for your Part A and Part B services.

You either choose Parts A, B and D OR a Medicare Advantage plan, not both. Some Advantage plans do not include prescription drug coverage, so you would still need to enroll in a standalone Part D plan.

While enrolled in an Advantage plan, you must be enrolled in Part A and Part B and pay the costs associated with those components. Since you would also be part of a network, you are required to live in the plan’s service area.

Medicare Advantage vs. Original Medicare + Supplement

With Original Medicare, you will have deductibles and a 20% coinsurance on Part B, but you can visit any doctor or hospital that participates in Medicare, which makes up a vast majority of providers. A Medicare Supplement, depending on the plan, can often cover the deductibles and co-insurance associated with Parts A and B.

With an Advantage plan, you must use the plan’s network of providers, which is almost always local. You will pay co-payments – usually smaller for a primary care doctor visit and higher to see a specialist. The co-payments can also vary depending on whether a provider is in or out of network.

One of the biggest differences is how often the plans are modified. Original Medicare may go through small increases to the Part A and B deductible, but the 20% coverage on outpatient services never changes. Medicare Advantage plans, and the networks associated with the different plans, change regularly, so you will want to check in each year to make sure your current plan still suits your coverage needs. 

Often times, beneficiaries have to decide how involved they want to be with their coverage. The combination of Original Medicare and a Supplement could cost more in premiums (though not necessarily more in total annual spending), but offers the convenience of not having to keep up with networks, co-pays, referrals, etc. Medicare Advantage plans can save money upfront, but require a beneficiary’s attention throughout the year. As we always say, there is no one “right” answer.

We also encourage beneficiaries to consider risk when deciding what’s best for their needs. Original Medicare, combined with a Medicare Supplement can reduce your out-of-pocket risk for Medicare-eligible expenses down to as little as that year’s Part B annual deductible. Advantage plans have annual out-of-pocket maximums of up to $6,700 in network and $10,000 out of network. 

Our Certified Advisors are happy to talk with you about what coverage may make the most sense for your current situation and help you modify your coverage as those needs change in the future.