Medicare Advantage is an alternative way to get your Medicare benefits through a private insurance company

A Medicare Advantage plan (also called Part C) is health insurance sold by a private company — not by Medicare itself — that covers everything Original Medicare covers, plus usually dental, vision, and hearing. Instead of going to Medicare for your coverage, you sign up with the insurance company, pay them your premiums, and they handle your claims. You still pay the same Medicare Part B premium to Medicare, but the insurance company becomes your main contact for medical care.

The trade-off is that Medicare Advantage plans almost always have a network — you must use doctors and hospitals in that network, or pay more out of pocket. Original Medicare has no network; you can see any doctor who accepts Medicare anywhere in the country. Medicare Advantage plans also have annual out-of-pocket limits, which Original Medicare does not.

Key Takeaways

  • Medicare Advantage plans are sold by private insurance companies and cover all the same services as Original Medicare, plus extras like dental and vision.
  • You must use doctors and hospitals in the plan's network, except in emergencies or urgent care situations.
  • Plans have an annual out-of-pocket spending limit — once you reach it, the plan pays 100% of covered services for the rest of the year.
  • You can switch to a different Medicare Advantage plan or back to Original Medicare during the Annual Enrollment Period (October 15 to December 7 each year).
  • Not all plans are available in all areas, and coverage and costs change every year.

How Medicare Advantage plans cover medical services

Medicare Advantage plans must cover all the services that Original Medicare covers: hospital stays (Part A), doctor visits and outpatient care (Part B), and prescription drugs (Part D). Many plans also include dental, vision, hearing aids, and fitness benefits at no extra cost, though the coverage varies by plan and location.

You pay a monthly premium to the insurance company (in addition to your Part B premium to Medicare), and you have copays or coinsurance when you use services. Unlike Original Medicare, where you can see any doctor, you must use doctors and hospitals in your plan's network. If you see an out-of-network provider without a referral, you pay more — sometimes the full cost. Emergency care and urgent care are usually covered even outside the network.

Each plan sets its own copays, deductibles, and out-of-pocket limits. One plan might charge $15 for a doctor visit and have a $3,000 annual out-of-pocket limit, while another charges $30 and has a $5,000 limit. You need to compare the actual costs for the doctors and services you use, not just the premium.

Types of Medicare Advantage plans and how they differ

The most common type is a Health Maintenance Organization (HMO) plan. HMOs require you to pick a primary care doctor who coordinates your care and gives referrals to specialists. You must use in-network providers except in emergencies. HMOs usually have lower premiums and copays.

A Preferred Provider Organization (PPO) plan lets you see any doctor without a referral, but you pay less if you use in-network providers. Out-of-network care costs more but is still covered. PPOs have higher premiums and copays than HMOs but more flexibility.

Private Fee-for-Service (PFFS) plans are less common. They work more like Original Medicare — you can see any doctor who accepts the plan — but the plan (not Medicare) decides what it will pay and what you owe. Special Needs Plans (SNPs) are designed for people with specific conditions like diabetes or heart disease, or for people in nursing homes or on Medicaid.

What you pay with a Medicare Advantage plan

You pay four types of costs. First, your monthly premium to the insurance company (some plans have zero premium, but you still pay Medicare Part B premium). Second, your annual deductible — the amount you pay out of pocket before the plan starts paying. Third, copays or coinsurance each time you use a service (a copay is a flat amount like $15; coinsurance is a percentage like 20%). Fourth, anything above your annual out-of-pocket limit is paid by the plan for the rest of that year.

The annual out-of-pocket limit is important: once you reach it, the plan pays 100% of covered services for the rest of the calendar year. In 2024, the limit cannot be higher than $8,050 for in-network services, though plans can set it lower. This is different from Original Medicare, which has no annual limit on what you pay.

Prescription drug coverage is included in Medicare Advantage plans (unlike Original Medicare, where you buy Part D separately). However, the drugs covered and their costs vary by plan. You should check whether your current medications are on the plan's formulary and what tier they are on — higher tiers cost more.

When you can enroll in or switch Medicare Advantage plans

If you are new to Medicare, you can enroll in a Medicare Advantage plan during your Initial Enrollment Period, which is the seven-month window that starts three months before the month you turn 65. If you miss that window, you may pay a late enrollment penalty for as long as you have Medicare.

If you already have Medicare, you can switch plans during the Annual Enrollment Period, which runs from October 15 to December 7 each year. Changes take effect January 1. You can also switch during the Medicare Advantage Open Enrollment Period, which runs January 1 to March 31 each year — during this time, you can switch to a different Medicare Advantage plan or back to Original Medicare once.

If you move out of your plan's service area, lose your current coverage, or have certain life changes (like losing employer coverage), you may be able to enroll outside these windows. Contact Medicare at 1-800-MEDICARE to ask whether you may have access to.

Medicare Advantage versus Original Medicare: what to consider

Choose Medicare Advantage if you want dental, vision, and hearing coverage included; you are willing to use a network of doctors; and you want a predictable annual out-of-pocket limit. It works well if you have a regular doctor in the network and do not travel much.

Choose Original Medicare if you want to see any doctor anywhere without worrying about networks; you have doctors outside your area; or you are planning to travel. Original Medicare also has no annual out-of-pocket limit, so if you have very high medical costs, you may want to buy a Medigap policy instead to cover what Medicare does not pay.

The choice depends on your health, your doctors, your budget, and your travel plans. There is no single right answer. Many people switch back and forth as their situation changes.

How to compare Medicare Advantage plans in your area

Start by going to Medicare.gov and using the Plan Finder tool. Enter your zip code, and it will show you every Medicare Advantage plan available in your area. For each plan, you can see the monthly premium, deductible, copays for common services, the list of doctors and hospitals in the network, and the formulary (list of covered drugs).

Make a list of the doctors you see regularly and the medications you take. Then check whether each doctor is in-network for the plans you are considering, and whether each medication is covered and at what cost. A plan with a low premium might have high copays for your doctor or put your medications on an expensive tier.

Read the plan's Summary of Benefits and Coverage document — it is dense, but it shows exactly what you pay for the services you use most. You can also call the plan's customer service number to ask specific questions about coverage before you enroll.

Frequently Asked Questions

Can I use my current doctor with a Medicare Advantage plan?

Only if your doctor is in the plan's network. Before you enroll, check the plan's website or call and ask whether your doctor accepts that plan. If your doctor is not in the network, you can either choose a different plan or switch back to Original Medicare during the enrollment period.

What happens if I need care outside my plan's service area?

Emergency care is covered anywhere in the United States. Urgent care (like a minor injury or infection while traveling) is usually covered. Routine care outside the service area is not covered unless you have a referral from your primary care doctor. Check your plan's rules before you travel.

Do I still have to pay Medicare premiums if I have a Medicare Advantage plan?

Yes. You pay your Part B premium to Medicare every month, even if your plan premium is zero. Some people also pay an Income-Related Monthly Adjustment Amount (IRMAA) if their income is above a certain level. You do not pay a separate Part D premium because prescription drug coverage is included in the plan.

Can I switch back to Original Medicare if I change my mind?

Yes, during the Annual Enrollment Period (October 15 to December 7) or the Medicare Advantage Open Enrollment Period (January 1 to March 31). If you switch back to Original Medicare, you can also enroll in a Medigap or Part D plan at the same time. Outside these windows, you cannot switch unless you have a may have access to life event.

What is the difference between a Medicare Advantage plan and a Medigap policy?

Medicare Advantage is an alternative to Original Medicare — it replaces it. Medigap is a supplement you buy to go with Original Medicare — it covers costs that Original Medicare does not pay. You cannot have both Medicare Advantage and Medigap at the same time. If you have Original Medicare and want extra coverage, you buy Medigap. If you want an all-in-one plan with a network, you choose Medicare Advantage.