What Is Medicare Advantage? A 2024 Guide

Pros and Cons of Medicare Advantage

What Is Medicare Part C?

Medicare Part C is another way to refer to Medicare Advantage. To help you learn how this works, check out our one-minute short.

How Medicare Advantage Works

Although Medicare Advantage plans are offered by private companies, they are federally regulated and required to cover everything that Original Medicare covers. Often, Medicare Advantage plans also include Part D (prescription drug) coverage, as well as additional benefits for hearing, vision, or dental.

Often, Medicare Advantage plans have provider networks that restrict where you can obtain health care from. Obtaining care from outside this network may cost you significantly more, or you might not have coverage at all.

Medicare Advantage vs. Medigap

While both Medicare Advantage and Medigap (Medicare Supplement Insurance) are offered by private companies, each serves a slightly different function.

Medicare Advantage plans replace your Original Medicare coverage and potentially offer additional benefits for drug, vision, dental, and hearing coverage.

Medigap plans augment your Original Medicare coverage by covering deductibles, copayments, and coinsurance, among others.

How Much Does Medicare Advantage Cost?

In 2023, the national average monthly premium for a Medicare Advantage plan is about $20. Some premiums are $0, whereas others can be over $100. Additionally, out-of-pocket costs max out at $7,550 for plans that don’t include prescription drug coverage.  ​​

It’s important to note, however, that even when you’re enrolled in Medicare Advantage, you’ll still have to pay a premium for Medicare Part B.

Six Types of Medicare Advantage Plans

Health Maintenance Organization (HMO)

HMO plans cover services by providers that are in-network and usually have more plan types than others. If you want to receive out-of-network care, expect to pay the entire bill. It’s important to note that this type of plan limits which doctors/specialists you can see. Out-of-pocket costs are usually lower than they are with PPO plans.

Preferred Provider Organization (PPO)

If you choose a PPO plan, you won’t pay as much when seeing an in-network provider compared to one that is out of network. On average, out-of-pocket costs will be $5,873 for local PPOs and $6,707 for regional PPOs. Take into consideration that PPO plans can now charge an annual deductible for medical and drug coverage, even though most don’t.

Private Fee-for-Service (PFFS)

While not extremely common, PFFS plans may sometimes be network based and require non-network providers to accept Medicare reimbursement along with the plan’s terms and conditions. Additionally, many PFFS plans don’t include prescription drug coverage.

Special Needs Plan (SNP)

SNPs are a type of Medicare Advantage plan. If you have a chronic condition, qualify for both Medicare and Medicaid, or live in an institution like a nursing home, these plans are a great option because benefits, provider choices, and drug formularies are tailored to you. The type of SNP you choose will determine if out-of-network services are covered.

HMO Point-of-Service (HMO POS)

HMO POS plans are a hybrid plan where you can go outside your network for treatment; however, you’ll pay more. Moreover, there are separate deductibles for in- and out-of-network charges.

How to Choose a Medicare Advantage Plan

Before choosing a Medicare Advantage plan, the first thing you should consider are your health needs. Another major determinant is whether you prefer to see doctors/specialists in- or out-of-network. With that comes out-of-pocket costs. Typically, in-network will be cheaper, especially if your plan doesn’t cover out-of-network office visits.

When choosing a plan, ask yourself these questions: Can I continue to see my current doctor? What is the monthly cost? Does it cover prescription drugs? Does it suit my lifestyle/healthcare needs?

Our Favorite Medicare Advantage Providers

Our favorite Medicare Advantage providers offer comprehensive coverage with benefits not found with Original Medicare. Some of these Medicare Advantage plans have $0 premiums:

• AARP Medicare Advantage
• Aetna Medicare Advantage
• Anthem Medicare Advantage
• Blue Cross Blue Shield Medicare Advantage
• Cigna Medicare Advantage
• Humana Medicare Advantage
• Kaiser Permanente Medicare Advantage
• UnitedHealthcare Medicare Advantage

How to Enroll in Medicare Advantage

If you’re having trouble determining which Medicare Advantages plans are offered near you, use Medicare.gov’s search tool. Once you’ve chosen a plan, you can enroll online or via phone. Keep in mind that enrollment periods (Initial, Open, and Medicare Advantage Open) are crucial, especially if you’re switching.

Switching Medicare Advantage Plans

Switching Medicare Advantage plans is easy, but note that once you do, you can switch to Original Medicare only. If you want to switch to Medigap, there are a few elements to consider:

• Policies don’t cover everything (i.e., long-term care, vision/dental, hearing aids, eyeglasses).
• You need to have both Medicare Part A and B.
• Medigap enhances your Original Medicare benefits only.
• Monthly premiums are required in addition to Part B monthly premiums.
• Medigap covers only one individual.
• Medigap can be purchased only from an insurance company that’s licensed in your place of residence.
• All standardized Medigap policies are guaranteed renewable.