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 a way to receive your Medicare hospital and medical coverage through a private insurance company instead of directly from the federal government. The insurance company contracts with Medicare to provide the same benefits you would get through Original Medicare (Part A and Part B), but often with added coverage like dental, vision, or hearing. You still pay your Part B premium to Medicare, but you enroll in the private plan instead of using Original Medicare.

The trade-off is that Medicare Advantage plans usually have networks — you must use doctors and hospitals in that network, or pay more. They also typically require referrals to see specialists and may have limits on how much you can spend out of pocket in a year. Some people choose Medicare Advantage because the extra benefits and lower monthly costs work for their situation; others prefer Original Medicare because they want more freedom to see any doctor.

Key Takeaways

  • Medicare Advantage plans are run by private insurance companies and must cover at least the same hospital and medical services as Original Medicare.
  • Most plans include extra benefits like dental, vision, or hearing coverage that Original Medicare does not cover.
  • You must use doctors and hospitals in the plan's network, except in emergencies, and you usually need a referral to see a specialist.
  • Each plan has a yearly out-of-pocket spending limit, which protects you from very high costs but means you may pay more per visit than in Original Medicare.
  • You can change plans or switch back to Original Medicare during the Annual Enrollment Period (October 15 to December 7 each year).

How Medicare Advantage plans cover your medical costs

Medicare Advantage plans cover hospital stays (Part A) and doctor visits and outpatient care (Part B) just as Original Medicare does. However, the way you pay is different. Instead of paying a deductible and then 20 percent coinsurance for most services, you typically pay a copay (a fixed amount like $20 for a doctor visit) or coinsurance (a percentage of the cost). The exact copays and coinsurance depend on which plan you choose.

Every Medicare Advantage plan has an out-of-pocket maximum — a yearly limit on how much you will pay for covered services. Once you reach that limit, the plan pays 100 percent of your covered costs for the rest of the year. This maximum varies by plan but provides a safety net that Original Medicare does not have. However, this also means that if you use many services, you may pay more per visit than you would in Original Medicare, where you pay 20 percent coinsurance with no yearly cap.

What extra benefits Medicare Advantage plans often include

Many Medicare Advantage plans cover services that Original Medicare does not, such as dental cleanings and fillings, eyeglasses or contact lenses, hearing aids, and routine hearing exams. Some plans also cover fitness programs, transportation to medical appointments, or over-the-counter drug allowances. These extras are a major reason people choose Medicare Advantage, especially if they need dental or vision care.

The specific benefits vary widely from plan to plan and from year to year. A plan that covers dental this year may change its coverage next year, or a new plan in your area may offer better vision benefits. You will need to review the plan details each year during the Annual Enrollment Period to see what is included.

Network restrictions and how they affect your choices

Medicare Advantage plans operate on a network model, meaning you must use doctors, hospitals, and other providers that have a contract with the plan. If you see an out-of-network provider, you will pay more — sometimes much more — or the plan may not cover the visit at all. The exception is emergency care: if you have a medical emergency, any hospital or emergency room must treat you, and the plan will cover it.

Before you enroll in a plan, you can check whether your current doctors are in the network. Most plans provide a provider directory online or by phone. If your main doctor is not in the network, you will need to decide whether to switch doctors or choose a different plan. This is one of the biggest differences between Medicare Advantage and Original Medicare, where you can see any doctor who accepts Medicare.

Referrals, prior authorization, and how they work

Most Medicare Advantage plans require you to have a primary care doctor who coordinates your care. If you need to see a specialist, you usually must get a referral from your primary care doctor first. This is different from Original Medicare, where you can see any specialist without a referral.

Plans may also require prior authorization for certain services, tests, or medications. This means the plan must approve the service before you receive it, to make sure it is medically necessary. Your doctor's office usually handles this request, but it can add time to scheduling. If the plan denies authorization, you have the right to appeal.

Prescription drug coverage in Medicare Advantage

Most Medicare Advantage plans include prescription drug coverage (Part D), so you do not need to enroll in a separate drug plan. However, not all plans include drug coverage, so you should check before you enroll. The drugs covered and the copays vary by plan.

If your plan includes drug coverage, you will have a formulary — a list of covered medications. If your doctor prescribes a drug that is not on the formulary, you can ask your doctor to prescribe a different drug that is covered, or you can request an exception from the plan. Some plans also have a coverage gap (called the "donut hole") where you pay more for drugs after you reach a certain spending level, though this gap is smaller than it used to be.

When you can enroll or change Medicare Advantage 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. If you miss the Annual Enrollment Period, you cannot change plans until the next year, unless you have a may have access to life event such as moving out of your plan's service area, losing other health coverage, or becoming may be able to access for Medicaid.

If you are already in a Medicare Advantage plan and want to switch to Original Medicare, you can do so during the Annual Enrollment Period. You have until December 7 to make the change, and it will be effective January 1. Some people switch back and forth depending on their health needs and which plans are available in their area that year.

Costs: premiums, deductibles, and out-of-pocket limits

Medicare Advantage plans vary widely in cost. Some plans have no monthly premium beyond your Part B premium, while others charge an additional premium. Deductibles also vary — some plans have no deductible, while others may have a deductible of several hundred dollars. Copays for doctor visits, specialist visits, and hospital stays differ by plan.

The out-of-pocket maximum is the total you will pay in a year before the plan covers everything. This maximum varies by plan and by year. In 2024, the maximum out-of-pocket limit set by Medicare is a certain amount, but individual plans may set lower limits. You should compare the total estimated costs (premium plus deductible plus copays) across plans to see which fits your budget and health needs.

Frequently Asked Questions

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

Most Medicare Advantage plans are regional — they cover care only in a specific geographic area. If you travel outside that area, you can use emergency services, but routine care may not be covered. If you move permanently out of your plan's service area, you have a may have access to life event and can change plans outside the Annual Enrollment Period.

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

If your plan is discontinued, Medicare will notify you and you will have the right to enroll in a different plan without waiting for the Annual Enrollment Period. Medicare will provide information about other plans available in your area.

Do I still need to pay my Part B premium if I have Medicare Advantage?

Yes. You must continue to pay your Part B premium to Medicare. Some Medicare Advantage plans also charge an additional monthly premium on top of Part B, but many do not.

Can I have both Medicare Advantage and Original Medicare at the same time?

No. You must choose one or the other. If you enroll in a Medicare Advantage plan, you are automatically disenrolled from Original Medicare. If you later switch back to Original Medicare, you will be disenrolled from the Advantage plan.

What if my doctor leaves the Medicare Advantage plan's network?

If your doctor leaves the network, the plan should notify you. You can then choose to find a new in-network doctor or switch to a different plan during the Annual Enrollment Period. Some plans may cover a transition period with your out-of-network doctor, but this varies.