A Medicare Advantage plan is an alternative way to get your Medicare coverage through a private insurance company instead of through Original Medicare
Instead of using the Original Medicare program (Part A and Part B) directly, you can choose to let a private insurer handle your hospital and medical coverage. That insurer receives a monthly payment from Medicare for you, and in return, they cover your doctor visits, hospital stays, and other services. The trade-off is that you use the insurer's network of doctors and hospitals, and you typically pay less out of pocket than you would with Original Medicare — but you have fewer choices about which providers you see.
Medicare Advantage plans are also called Part C. They are legal, regulated by Medicare, and available to anyone with Medicare Part A and Part B. About 4 in 10 people with Medicare choose an Advantage plan instead of staying with Original Medicare.
Key Takeaways
- Medicare Advantage plans are run by private insurance companies and include hospital, doctor, and usually prescription drug coverage all in one plan.
- You must use doctors and hospitals in the plan's network, except in emergencies or urgent situations, or you will pay more or the plan may not cover the visit.
- Most Advantage plans charge a monthly premium of zero dollars, but you still pay the Part B premium to Medicare, plus copays and deductibles when you use care.
- You can switch to a different Advantage plan or back to Original Medicare once a year during the Annual Enrollment Period, which runs October 15 to December 7.
- Advantage plans often include dental, vision, hearing, and fitness benefits that Original Medicare does not cover.
How the network and costs work in an Advantage plan
When you join an Advantage plan, you choose from a list of doctors and hospitals that the plan has contracted with. If you see a doctor outside that network without a referral, you will usually pay the full cost yourself, or the plan may refuse to cover it. Emergency care and urgent care are covered even outside the network, so you do not have to worry about that in a crisis.
The costs you pay depend on the specific plan. Most Advantage plans have a zero-dollar monthly premium, meaning you do not pay the plan itself — but you still pay Medicare's Part B premium (currently $164.90 per month for most people, though this amount changes each year). On top of that, you pay copays when you see a doctor (often $10 to $50 per visit), coinsurance for hospital stays, and an annual deductible before the plan starts to pay. Some plans have no deductible; others have a deductible of a few hundred dollars.
Because costs vary widely between plans, it is worth comparing the plans available to you. A plan with a zero premium might have higher copays, while another might charge a small monthly premium but have lower copays. The plan that costs the least depends on how much care you actually use.
Prescription drug coverage included in most Advantage plans
Most Medicare Advantage plans include prescription drug coverage (Part D) as part of the plan. You do not buy it separately. This is different from Original Medicare, where you have to add a separate Part D plan if you want drug coverage.
Like all Part D plans, Advantage plans with drug coverage have a formulary — a list of medications the plan covers. If your regular medication is not on the formulary, you can ask your doctor to request an exception, or you can switch to a different medication that is covered. The copay for a drug depends on which tier it is on; generic drugs usually cost less than brand-name drugs.
If you do not take many medications, you might find a plan with drug coverage that costs very little. If you take expensive drugs, you will want to check the formulary and the copays before you join.
Extra benefits that Advantage plans often offer
Many Advantage plans include benefits that Original Medicare does not pay for. These can include dental care (cleanings, fillings, sometimes dentures), vision care (eye exams, glasses, contact lenses), hearing aids, and fitness programs. Some plans offer transportation to medical appointments, meal delivery, or over-the-counter medication allowances. These benefits vary widely by plan and by region.
If you use dental or vision care regularly, an Advantage plan with those benefits can save you hundreds of dollars a year. However, these benefits often have limits — for example, a dental plan might cover one cleaning per year, or vision might cover one eye exam every two years. Read the plan's summary to see exactly what is covered and what the limits are.
When you can join or switch an Advantage plan
You can join a Medicare Advantage plan when you first become may be able to access for Medicare (usually at age 65). If you are already on Original Medicare, you can switch to an Advantage plan during the Annual Enrollment Period, which runs from October 15 to December 7 each year. Changes take effect on January 1.
There is also a Medicare Advantage Open Enrollment Period from January 1 to March 31 each year. During this time, if you are already in an Advantage plan, you can switch to a different Advantage plan or go back to Original Medicare. You cannot use this period to join an Advantage plan for the first time if you missed the main enrollment period.
If you move to a new state or your plan leaves the market, you may have a special enrollment period that lets you change plans outside the normal windows. Contact Medicare at 1-800-MEDICARE to learn about you may have access to.
How Advantage plans compare to Original Medicare
The main difference is choice versus cost. Original Medicare lets you see any doctor or hospital that accepts Medicare, anywhere in the country. You have complete freedom, but you pay 20 percent coinsurance for most services after you meet your deductible, and you have to buy a separate Medigap or Part D plan if you want more coverage.
An Advantage plan limits you to a network, but the out-of-pocket costs are usually lower because copays are fixed and predictable. If you do not travel much and you are comfortable with a network, an Advantage plan often costs less. If you travel frequently, see specialists outside your area, or have a doctor you want to keep who is not in the network, Original Medicare might be better for you.
| Feature | Medicare Advantage | Original Medicare |
|---|---|---|
| Doctor choice | Network only (except emergencies) | Any doctor that accepts Medicare |
| Typical monthly premium | $0 (plus Part B premium) | Part B premium only |
| Prescription drug coverage | Usually included | Must buy separately (Part D) |
| Dental, vision, hearing | Often included | Not covered |
| Out-of-pocket limit | Yes (usually $7,000–$10,000) | No limit |
What happens if you need care outside the network
If you see a doctor or go to a hospital that is not in your Advantage plan's network, you will usually pay the full cost yourself. The plan will not cover it, unless it is an emergency or urgent care situation. This is why it is important to check whether your current doctors are in the network before you join a plan.
If you travel frequently or live part of the year in another state, ask the plan whether it covers out-of-network emergency care and what the copay is. Most plans do cover emergency room visits and urgent care outside the network, but the copay may be higher than it would be in-network.
If your doctor is not in the network and you want to keep seeing them, you have two choices: ask the plan for an out-of-network exception (which is sometimes granted), or stay with Original Medicare instead.
Frequently Asked Questions
Can I have both an Advantage plan and a Medigap plan at the same time?
No. Medicare does not allow you to have both. If you join an Advantage plan, you should cancel any Medigap policy you have. If you later switch back to Original Medicare, you can buy a Medigap plan again, but you may not get the same price or coverage you had before, depending on your age and health.
What is the out-of-pocket maximum in an Advantage plan?
Every Advantage plan has an annual out-of-pocket limit, usually between $7,000 and $10,000. Once you reach that limit, the plan pays 100 percent of your covered services for the rest of the year. Original Medicare has no out-of-pocket limit, which is why some people prefer it if they expect to need a lot of care.
Do I still pay the Part B premium if I have an Advantage plan?
Yes. You pay Medicare's Part B premium directly to Medicare every month, even if your Advantage plan premium is zero dollars. The Advantage plan premium and the Medicare Part B premium are separate.
What happens to my Advantage plan if I move to a different state?
Your plan may not be available in your new state. If it is not, you will have a special enrollment period to switch to a different Advantage plan or go back to Original Medicare. Contact your current plan or Medicare to find out what plans are available where you are moving.
Can I switch Advantage plans in the middle of the year?
You can switch during the Annual Enrollment Period (October 15 to December 7) or the Medicare Advantage Open Enrollment Period (January 1 to March 31). Outside those windows, you can only switch if you have a may have access to life event, such as moving, losing other insurance, or your plan leaving the market.