What a Medicare Advantage plan is and how it differs from Original Medicare

A Medicare Advantage plan is an alternative way to get your Medicare coverage. Instead of using Original Medicare (Part A and Part B), you join a private insurance company that contracts with Medicare. That company becomes responsible for paying your doctors, hospitals, and other providers — not Medicare itself.

The key difference: Original Medicare is run by the federal government and covers services at any hospital or doctor who accepts Medicare. A Medicare Advantage plan is run by a private insurer and usually limits you to a network of doctors and hospitals. In exchange, these plans often include prescription drug coverage (Part D), dental, vision, or hearing benefits that Original Medicare does not cover. You still pay the Part B premium to Medicare, but you also pay the plan's premium, deductible, and copays.

You cannot have both at the same time. If you enroll in a Medicare Advantage plan, you are stepping out of Original Medicare for that year. You can switch back during the annual enrollment period (October 15 to December 7 each year), but not in the middle of the year except in specific circumstances.

Key Takeaways

  • Medicare Advantage plans are run by private insurance companies and usually require you to use doctors and hospitals in their network, but they often include prescription drug, dental, vision, and hearing coverage that Original Medicare does not.
  • You pay a monthly premium to the plan, a Part B premium to Medicare, and copays or coinsurance when you use services — the exact amounts depend on which plan you choose.
  • Plans have an out-of-pocket maximum, which is the most you will pay in a year for covered services; once you reach it, the plan pays 100 percent of covered costs for the rest of that year.
  • You can only enroll in a Medicare Advantage plan during the annual enrollment period (October 15 to December 7) or if you have a may have access to life event like moving or losing other coverage.
  • If you need care outside the plan's network, you may have to pay the full cost yourself, unless it is an emergency or the plan has an out-of-network agreement.

How the network works and what happens if you see an out-of-network doctor

Each Medicare Advantage plan has a network — a list of doctors, hospitals, specialists, and other providers who have agreed to work with that plan. When you use an in-network provider, you pay only your copay or coinsurance. The plan pays the rest.

If you see a doctor outside the network, you usually pay the full bill yourself. The plan will not pay anything, and you cannot count that cost toward your out-of-pocket maximum. The exception is emergencies: if you go to an out-of-network emergency room, the plan will pay its share, and you pay your copay just as you would in-network.

Some plans also cover urgent care at out-of-network facilities if you are traveling or away from home. Before you enroll, check whether your current doctors are in the plan's network. If your main doctor is not, you may need to choose a different plan or be prepared to switch doctors. Plans publish their full provider directories online, and you can search by doctor name or specialty.

Premiums, deductibles, copays, and the out-of-pocket maximum

A Medicare Advantage plan costs you money in four ways. First, you still pay the Part B premium to Medicare each month — that amount is the same regardless of which plan you choose. Second, most plans charge a monthly premium to the insurance company; some plans have zero premium, but they usually have higher copays or deductibles. Third, you pay a deductible before the plan starts paying for most services — the amount varies by plan, and some plans have no deductible. Fourth, you pay copays (a fixed dollar amount per visit) or coinsurance (a percentage of the cost) each time you use a service.

The out-of-pocket maximum is the most important number to understand. Once you have paid that amount in premiums, deductibles, copays, and coinsurance in a single year, the plan pays 100 percent of your covered costs for the rest of that year. Out-of-pocket maximums vary by plan but are capped by Medicare — the limit changes each year. Costs for services outside the network do not count toward this maximum.

Example: If your plan's out-of-pocket maximum is $7,000 and you have paid $6,800 in copays and deductibles by November, your next covered service will push you over the limit. From that point forward, the plan covers 100 percent of covered in-network services with no copay for the rest of the year.

Prescription drug coverage and other included benefits

Most Medicare Advantage plans include prescription drug coverage (Part D) as part of the plan, so you do not need to buy a separate drug plan. You pay a copay when you fill a prescription, and the amount depends on the drug's tier — generic drugs usually cost less than brand-name drugs. Some plans have a deductible for drugs, and some do not.

Beyond drugs, many plans offer benefits Original Medicare does not cover: dental (cleanings, fillings, sometimes dentures), vision (eye exams, glasses, contact lenses), hearing (exams and hearing aids), fitness programs, transportation to medical appointments, or even meal delivery. The exact benefits and how much they cover vary widely by plan. A plan with a zero premium might offer only basic dental, while a plan with a higher premium might cover more extensive dental work or hearing aids.

Check the plan's summary of benefits document before you enroll. This document lists exactly what is covered, what you pay, and any limits — for example, a plan might cover two dental cleanings per year but not root canals, or it might cover one pair of glasses every two years.

Prior authorization and referrals

Some Medicare Advantage plans require prior authorization before you have certain procedures or tests. This means your doctor must contact the plan and get approval before you schedule the service. If your doctor does not get approval first and you have the service anyway, you may have to pay the full cost yourself.

Some plans also require a referral from your primary care doctor before you can see a specialist. Your primary care doctor acts as a gatekeeper — you choose one when you enroll, and you see that doctor first for most health concerns. If you need a specialist, your primary care doctor refers you. If you see a specialist without a referral, the plan may not pay.

Not all plans have these requirements — some allow you to see specialists without a referral. Check the plan details before you enroll if you see specialists regularly or expect to need certain procedures.

When you can enroll and how to switch plans

You can enroll in a Medicare Advantage plan during the Annual Enrollment Period, which runs from October 15 to December 7 each year. Coverage begins January 1 of the following year. You can also enroll when you first become may be able to access for Medicare (usually at age 65) or if you have a may have access to life event — moving to a new state, losing other health coverage, or becoming may be able to access for Medicaid.

To enroll, you can visit Medicare.gov, call 1-800-MEDICARE, or work with a licensed insurance agent or broker who specializes in Medicare. The agent can help you compare plans, but they cannot tell you which plan to choose — that decision is yours.

If you are already in a Medicare Advantage plan and want to switch to a different plan or back to Original Medicare, you must do so during the Annual Enrollment Period. The only exception is if you have a may have access to life event, which allows you to make changes outside the enrollment window. Once you switch, your old plan coverage ends and your new coverage begins on January 1.

How to compare plans and what to look for

Medicare publishes a plan comparison tool at Medicare.gov where you can enter your zip code and see all available plans, their premiums, deductibles, copays, and provider networks. You can also see which of your current doctors are in each plan's network and compare prescription drug coverage if you take regular medications.

When comparing, focus on these questions: Are my doctors in the network? What is the out-of-pocket maximum? Do I need prior authorization or referrals? What prescription drugs are covered, and at what copay? What extra benefits (dental, vision, hearing) does the plan include, and do I actually use them? A plan with a low premium but a high out-of-pocket maximum might cost you more overall if you use a lot of health care.

You can also contact plans directly to ask questions, or speak with a State Health Insurance information Program (SHIP) counselor, who offers free, unbiased information about Medicare plans. SHIP counselors are available in every state and can help you understand your options without pushing you toward any particular plan.

Frequently Asked Questions

Can I use my Medicare Advantage plan if I travel or move to another state?

If you travel temporarily, your plan usually covers emergency care at out-of-network facilities. For routine care while traveling, you would need to use an in-network provider or pay out of pocket. If you move to a new state permanently, you can switch to a different Medicare Advantage plan (or Original Medicare) outside the normal enrollment period, because moving is a may have access to life event.

What happens to my Medicare Advantage plan if the insurance company stops offering it?

If your plan is discontinued, Medicare will notify you and give you options to switch to another plan. You can choose any other Medicare Advantage plan available in your area or switch to Original Medicare. This counts as a may have access to event, so you can make the change outside the normal enrollment period.

Do I still need Medigap insurance if I have a Medicare Advantage plan?

No. Medigap (supplemental insurance) is designed to work with Original Medicare, not Medicare Advantage. Medicare Advantage plans already include an out-of-pocket maximum, so you are protected from very high costs. Buying Medigap while enrolled in Medicare Advantage would be redundant and a waste of money.

Can I switch from Medicare Advantage back to Original Medicare whenever I want?

You can switch during the Annual Enrollment Period (October 15 to December 7) or if you have a may have access to life event. You cannot switch in the middle of the year just because you changed your mind. If you switch back to Original Medicare, you may also want to enroll in a Medigap plan or a separate Part D drug plan at the same time.

What if my plan's copays or benefits change during the year?

Plans can change their copays, deductibles, and benefits each year, but they must notify you by September 30 of any changes taking effect January 1. You have the right to switch to a different plan during the Annual Enrollment Period if the changes do not work for you.