What Medicare Advantage Plans Are and How They Differ From Original Medicare

A Medicare Advantage plan (also called Part C) is an alternative way to receive your Medicare benefits. Instead of getting coverage through the Original Medicare program run by the federal government, you enroll in a private insurance plan that contracts with Medicare. That private insurer becomes responsible for providing your Part A (hospital) and Part B (medical) coverage, and most Advantage plans also include prescription drug coverage (Part D) built in.

The main difference from Original Medicare is structure: with Original Medicare, you can see any doctor who accepts Medicare anywhere in the country. With most Advantage plans, you choose doctors and hospitals from a specific network, and you usually need a referral from your primary care doctor to see a specialist. In return, Advantage plans often charge lower monthly premiums than Original Medicare plus a separate Part D plan, and they cap your out-of-pocket costs each year — something Original Medicare does not do.

Advantage plans come in several types. A Health Maintenance Organization (HMO) requires you to use in-network doctors and get referrals. A Preferred Provider Organization (PPO) lets you see out-of-network doctors without a referral, but you pay more. A Private Fee-for-Service (PFFS) plan lets you see any doctor who accepts the plan's terms, regardless of network. A Special Needs Plan (SNP) is designed for people with specific conditions or circumstances.

Key Takeaways

  • Medicare Advantage plans are run by private insurers and include Part A, Part B, and usually Part D coverage in one plan, unlike Original Medicare which requires separate enrollment.
  • Most Advantage plans use a network of doctors and hospitals and require a primary care doctor and referrals, which limits where you can receive care but often lowers your monthly costs.
  • Advantage plans cap your yearly out-of-pocket costs, meaning once you reach that limit, the plan pays 100 percent of covered services for the rest of the year.
  • You can enroll in an Advantage plan during the Annual Enrollment Period (October 15 to December 7 each year) or if you are newly may be able to access for Medicare.
  • Advantage plans can change their networks, benefits, and costs each year, so you need to review your plan annually to make sure it still meets your needs.

How Premiums, Deductibles, and Out-of-Pocket Costs Work

Most Medicare Advantage plans charge a monthly premium in addition to your Part B premium, though some plans have zero premium. The amount varies by plan and by where you live. You pay this premium whether or not you use any services that month.

Beyond the premium, you pay when you use services. You may have a deductible — an amount you pay out of pocket before the plan starts to pay — though not all plans have one. You also pay copayments (a fixed dollar amount per visit, like $25 to see your doctor) or coinsurance (a percentage of the cost, like 20 percent). These costs vary by plan and by the type of service.

The critical difference from Original Medicare is the out-of-pocket maximum. Once your copayments, coinsurance, and deductibles add up to this yearly limit, the plan pays 100 percent of covered services for the rest of that calendar year. Original Medicare has no such cap. Out-of-pocket maximums vary by plan but are set by law each year — in 2024, the maximum is $7,550 for in-network services in most plans.

Prescription drug coverage is usually included in your Advantage plan premium, so you do not enroll in a separate Part D plan. You pay a copayment when you fill a prescription, and those costs count toward your out-of-pocket maximum.

Networks, Referrals, and Where You Can Receive Care

When you enroll in an HMO Advantage plan, you choose a primary care doctor from the plan's network. This doctor coordinates your care and must give you a referral before you see a specialist. If you see a specialist without a referral, or see an out-of-network doctor, the plan may not pay, and you could owe the full cost.

PPO plans are more flexible. You can see any doctor without a referral, and you can see out-of-network doctors, but you pay more when you do. For example, your copay for an in-network visit might be $25, but $50 for an out-of-network visit. Your out-of-pocket maximum is usually higher for out-of-network care.

Networks change every year. A doctor you see now might leave the network next year, or a new doctor might join. Before you enroll in a plan, check whether your current doctors are in the network. If you already have an Advantage plan, review the network each fall during the Annual Enrollment Period to see if your doctors are still included.

Emergency care is covered in-network rates even if you are out of the plan's service area, so you do not have to worry about paying full price if you have a heart attack while visiting family in another state.

Extra Benefits Many Advantage Plans Offer

Many Advantage plans include benefits that Original Medicare does not cover. These might include dental care (cleanings, fillings, extractions), vision care (eye exams, glasses, contact lenses), hearing aids, fitness programs, or transportation to medical appointments. Some plans cover over-the-counter items like pain relievers or vitamins. These extra benefits vary widely by plan and by region.

These extras can make a real difference in your daily life and budget. If you have dentures that need repair or you want to join a gym, an Advantage plan that covers those things can save you money. However, extra benefits are not may provide to stay the same year to year. A plan might offer dental coverage one year and drop it the next, or change how much it covers.

When you are comparing plans, look at the extra benefits each one offers and think about which ones matter to you. If dental work is something you know you need, prioritize a plan with strong dental coverage.

When You Can Enroll and How to Switch Plans

You can enroll in a Medicare Advantage plan when you first become may be able to access for Medicare (usually at age 65) or during the Annual Enrollment Period, which runs from October 15 to December 7 each year. Changes take effect on January 1 of the following year.

If you miss the Annual Enrollment Period, you cannot switch plans until the next one arrives — unless you have a may have access to life event. A may have access to event includes losing employer coverage, moving out of your plan's service area, or becoming may be able to access for Medicaid. If a may have access to event happens, you have 60 days to make a change.

To enroll or switch, you can visit Medicare.gov, call 1-800-MEDICARE, or work with a licensed insurance agent. You do not need to contact your current plan to leave it — Medicare handles the switch. However, tell your current doctors that you are changing plans so they know when your coverage ends.

What Happens If You Travel or Move

Most Advantage plans are regional, meaning they cover care only within a specific service area. If you move out of that area, your plan may no longer cover you, or it may cover emergency care only. If you move, you have 60 days to enroll in a new plan that serves your new location.

If you travel within the United States, emergency and urgent care are covered at in-network rates even outside your plan's service area. Routine care — like a regular doctor visit — is usually not covered out of area. If you travel frequently or spend winters in another state, look for a plan with a large national network or consider a PPO, which gives you more flexibility to see out-of-network doctors.

Some Advantage plans partner with other plans in different regions, so you can use their network when you travel. Ask your plan whether it has travel partnerships before you enroll.

Why Plans Change Every Year and How to Stay on Top of It

Medicare Advantage plans can change their premiums, deductibles, copayments, networks, and benefits every January 1. A plan you liked last year might cost more, cover fewer drugs, or drop your doctor this year. This is why reviewing your plan annually is essential.

Each fall, Medicare sends you a notice called the "Annual Notice of Change" that lists what is changing in your plan for the coming year. You also receive a "Evidence of Coverage" document that shows all the details of your plan's benefits and costs. These arrive in September and October. Read them, or ask a family member or counselor to help you understand them.

If your plan's changes do not work for you — your doctor left the network, your costs went up, or you need a benefit the plan no longer covers — you can switch to a different plan during the Annual Enrollment Period. You are not locked in.

Frequently Asked Questions

Can I switch back to Original Medicare if I do not like my Advantage plan?

Yes. During the Annual Enrollment Period (October 15 to December 7), you can switch to Original Medicare. You will also need to enroll in a Part D prescription drug plan if you want drug coverage. If you switch back to Original Medicare after your first year in an Advantage plan, you may not be able to buy a Medigap supplemental plan without paying a higher premium or facing waiting periods, depending on your state.

What if my doctor is not in my Advantage plan's network?

If your current doctor is not in the network, you have two choices: switch to a different plan that includes your doctor, or choose a new doctor from the plan's network. Before you enroll, use the plan's provider search tool on Medicare.gov to check whether your doctors are included. If your doctor leaves the network after you enroll, the plan usually gives you a grace period to find a new one.

Do Advantage plans cover mental health care?

Yes. Medicare requires all Advantage plans to cover mental health services, including therapy and psychiatry. However, you may need a referral from your primary care doctor, and you pay a copayment. The copayment for mental health visits is often the same as for regular doctor visits, though some plans charge more. Check your plan's details to see what mental health services are covered and what you will pay.

What happens to my Advantage plan if I move to a nursing home or assisted living?

Your Advantage plan may no longer cover you if you move to a facility outside its service area. If you enter a nursing home or assisted living facility, contact your plan when ready to ask whether you are still covered. If not, you can switch to a different plan that serves your new location, even outside the Annual Enrollment Period. This is considered a may have access to life event.

Are prescription drugs more expensive in Advantage plans than in Original Medicare with a separate Part D plan?

It depends on the specific drugs you take and the specific plans you are comparing. Some Advantage plans have lower drug costs than standalone Part D plans, and some have higher costs. When you are comparing plans, use the plan's formulary (the list of covered drugs) and the Medicare Plan Finder tool to see what you would pay for your specific medications in each plan.