Medicare Part C: Medicare Advantage Plans Explained
With multiple parts and plans, Medicare can feel incredibly confusing. Medicare’s parts also have two or more common names. Medicare Part C is no exception. Medicare Part C is most commonly referred to as Medicare Advantage. Medicare Advantage plans are offered by private insurance companies as an alternative to Original Medicare, which is run by the federal government.
In this guide, we’ll share everything you need to know about Medicare Advantage, including:
What it is and what it covers
How it’s different from Original Medicare
The pros and cons
How much it costs
Who it’s for
How to enroll
How to compare plans
Rather talk to someone to learn about Medicare? Our licensed Medicare Advisors are always happy to help you understand everything you need to know about Medicare. Give us a call at 855-900-2427 or schedule a time to talk, get your Medicare questions answered, and compare all your options.
What is Medicare Advantage?
Medicare Advantage is a type of Medicare coverage offered by private insurance companies. Insurance companies carry different Medicare Advantage plans that people on Medicare can choose from. Plan availability varies by county, and networks and benefits vary by plan—so it’s important to thoroughly compare your options when choosing a Medicare Advantage plan.
As an alternative to Original Medicare, these plans must cover the same services and equipment as Original Medicare (Part A & Part B). That said, they are certainly different from Original Medicare, and we’ll explain those differences below.
What are the different types of Medicare Advantage plans?
In 2024, Medicare enrollees have an average of 43 plans to choose from (depending on where they live). In this section, we’ll explain the different types of Medicare Advantage plans that are available.
Medicare Advantage vs. Medicare Advantage + Part D plans
There are two broad categories for Medicare Advantage plans. First, there are standard Medicare Advantage (MA) plans that replace Part A and Part B. There are also Medicare Advantage + Part D (MAPD) plans that include Part D coverage. The vast majority of Medicare Advantage plans include Medicare Part D coverage.
The types of Medicare Advantage plans listed below may come as MA or MAPD plans.
Medicare Advantage HMO plans
HMO stands for Health Maintenance Organization. With an HMO Medicare Advantage plan, you generally need to get care and equipment from in-network doctors, hospitals, and other healthcare providers. If you receive care outside of your plan’s network, you won’t receive coverage, unless it’s emergency care, out-of-area urgent care, or temporary out-of-area dialysis.
Medicare Advantage HMO-POS plans
HMO-POS (HMO Point-of-Service) Medicare Advantage plans are similar to HMO plans, but they may cover some services from out-of-network providers. If you go out of your plan’s network, you’ll pay a higher copayment or coinsurance. It’s also likely you won’t receive coverage if you don’t get prior authorization to receive out-of-network care.
Medicare Advantage PPO plans
PPO stands for Preferred Provider Organization. Like HMOs, PPOs have networks of doctors and other healthcare providers. The key difference is that PPO plans do provide coverage if you see a doctor outside of your plan’s network. You’ll just pay more for services received from out-of-network providers.
Medicare Advantage PPFS plans
PFFS stands for Private Fee-for-Service. With PFFS plans, your plan will determine how much it will pay and how much you will pay for care. Each time you receive care, you’ll need to show your plan ID card to your provider. At each visit, your provider can choose whether or not to accept your plan’s payment terms.
Special Needs Plans (SNPs)
Medicare Advantage Special Needs Plans (SNPs) provide more specific benefits to people with certain conditions or health care needs and to people who also qualify for Medicaid. SNPs provide care coordination services. They also provide benefits, provider networks, and prescription coverage to meet the unique needs of those they serve.
There are three types of SNPs:
Dual Eligible Special Needs Plans (DSNPs) serve people who are eligible for both Medicare and Medicaid.
Chronic Condition Special Needs Plans (CSNPs) serve people who have certain severe or disabling chronic conditions.
Institutional Special Needs Plans (ISNPs) provide special benefits and services for people who need care in a long-term care setting.
If you’re unsure if you’re eligible for a Special Needs Plan, a Chapter Medicare Advisor can help you figure it out and enroll in the plan that provides the best value for your unique needs.
How do Medicare Advantage and Original Medicare compare?
There are tradeoffs no matter which you choose. In a nutshell, Original Medicare provides more flexibility and access to care. Medicare Advantage plans provide additional benefits and coverage, but may limit your access to care.
Out-of-pocket limits
Original Medicare doesn’t have an out-of-pocket maximum. Because it only covers about 80% of costs, this could leave you on the hook for a lot of money if you need expensive or frequent health care services. Medicare Advantage plans do have out-of-pocket maximums. Keep in mind that out-of-pocket maximums vary, so if you spend a lot on healthcare in a year, you should look at plans that have lower maximum out-of-pocket amounts to limit your healthcare expenses.
Networks
Many of us are used to provider networks because they’re a common feature of employer-sponsored health insurance plans. One of the big pros of Original Medicare is that it doesn’t have network restrictions. This means that you can see any doctor nationwide who accepts Medicare—which is about 90% of all doctors. Medicare Advantage plans have local network restrictions, meaning if you’re on a Humana Medicare Advantage plan, you won’t be able to see doctors who accept Humana outside of your local area.
Prior authorization
Prior authorization requirements are another common feature of health insurance plans. That said, Medicare Advantage plans have received a lot of flack for frequent prior authorization requirements. Furthermore, prior authorization denials are all too common and prevent many people from receiving the care they need. Prior authorization requirements can cause some of the worst Medicare Advantage nightmares and are one of the primary complaints from doctors. Original Medicare, on the other hand, doesn’t require prior authorization for covered services. This means you wouldn’t experience delays to care—or denial of coverage.
Extra benefits
The extra benefits that Medicare Advantage plans provide are one of the big reasons people choose them. Who would say no to getting dental, vision, hearing, and prescriptions included in their plan? Plus, over-the-counter (OTC) cards, free fitness memberships, and transportation services for doctor appointments sound great! It’s important to note that these benefits vary from plan to plan. They also may not be worth it if they limit your access to the care you need or make it more expensive.
Below is a list of the most common benefits included in Medicare Advantage plans.
Coverage for vision services
Coverage for hearing services
Coverage for dental care
Plan variance
Original Medicare is the same for everyone. Premiums, out-of-pocket cost amounts, and coverage are always the same. Medicare Advantage plans are different, and these differences cause a lot of confusion. The features below are different from plan to plan, and it’s important to pay close attention to the details to understand what’s covered and how much you may owe for specific services.
Premiums
Copayment and coinsurance amounts
Deductibles
Maximum out-of-pocket amounts
Added benefits
Customer service reputations
Star ratings given by The Centers for Medicare and Medicaid Services
Prior authorization practices
Medicare Advantage pros and cons
We’ve explained how Medicare Advantage and Original Medicare differ. Below, we summarize the pros and cons.
Medicare Advantage pros:
Extra benefits like dental, vision, hearing, and prescription coverage, fitness benefits, transportation services, and more
Out-of-pocket maximums
Medicare Advantage cons:
Network restrictions
Prior authorization requirements and denials
Confusion caused by plan differences
How much does Medicare Advantage cost?
Medicare Advantage premiums vary, but many plans have zero-dollar premiums! Keep in mind that if you’re on a Medicare Advantage plan, you still have to pay Part B premium (and Part A, if applicable). In 2024, the average premium Medicare Advantage enrollees pay is $18.50 each month.
Who is Medicare Advantage for?
Medicare decisions, particularly the one between Original Medicare and Medicare Advantage, are personal. That said, there are certain people who may prefer Medicare Advantage over Original Medicare.
Who’s eligible for Medicare Advantage?
Anyone who’s eligible for Medicare is also eligible for Medicare Advantage. Just keep in mind that you cannot be enrolled in both a Medigap plan and a Medicare Advantage plan.
Who is Medicare Advantage good for?
We generally recommend that people who have Original Medicare add a Medigap plan and a prescription drug plan. With that, the decision becomes one between Medicare Advantage and Medigap.
Medicare Advantage plans may be a good fit for people who:
Are unable to afford Medigap premiums
Are healthy and therefore don’t need a lot of health care services
Can get a lot of value from the extra benefits offered by these plans
Are eligible for Special Needs Plans
It’s important to keep in mind that it’s not always easy to switch from a Medicare Advantage plan to a Medigap plan. So, if you fall ill and need more health care services, you may regret not enrolling in a Medigap plan that would significantly limit your out-of-pocket costs.
How to enroll in a Medicare Advantage plan
You must have a qualifying enrollment period to sign up for a Medicare Advantage plan. If you’re able to enroll, you can compare plans using Medicare.gov’s plan comparison tool or by speaking with one of our Medicare agents. Working with one of our Medicare agents makes things easy. They’ll first take note of your preferred doctors, prescriptions, and extra benefits. They’ll then use our powerful plan comparison tool to look at plans that would be a good fit for you. The tool allows them to confirm that all your needs are covered. Furthermore, they can simply calculate your estimated out-of-pocket costs to provide you with a detailed comparison of your options. This helps you choose the best Medicare Advantage plan for you.
Get help from a licensed advisor by calling us at 855-900-2427 or scheduling a time to talk.
Common questions about Medicare Advantage
Many people like their Medicare Advantage plans, but many others experience big issues. These issues include prior authorization denials, confusing bills, and lack of coverage for their preferred doctors and prescriptions. It’s important to understand the pros and cons of Medicare Advantage plans and the differences between plans available to you when choosing your coverage.
Doctors are fed up with the delays and denials for care that come with many Medicare Advantage plans. Almost all Medicare Advantage plans require prior authorization for at least some services. Doctors are frustrated by the effect this has on their patients’ access to timely, affordable care.
The best Medicare Advantage plan is different for everyone. Because plan availability varies by county and people have different healthcare needs, you should consider your health and financial situation when choosing the best Medicare Advantage plan for you. Make sure it covers your prescriptions and preferred doctors while minimizing your costs for the care you need.
The biggest disadvantage would depend on your specific health and financial needs, but many might say it’s the way Medicare Advantage insurance carriers handle prior authorization requirements. Requiring and denying prior authorization causes delays and limits to people receiving the care they need. Network restrictions and plan differences, on the other hand, can be worked around by comparing all plans available to you, understanding their details, and choosing one that covers all your preferred doctors and benefits.
Medicare Advantage plans are an alternative to Original Medicare, whereas Medicare Supplement plans stack on top of Original Medicare to reduce your out-of-pocket costs.
The Medicare Advantage Open Enrollment Period lasts for three months from January 1st to March 31st every year. During this time, you can change your Medicare Advantage plan or switch from Medicare Advantage to Original Medicare.
In many cases, Medicare agents are paid higher commissions for Medicare Advantage plans. This creates an incentive to push these plans, even if Medicare Advantage isn’t the best choice for a consumer.
At Chapter, we do things differently. Our founders started the company because they were frustrated with the lack of a consumer-first approach in the industry. Our Medicare agents get paid the same amount, regardless of which plan they recommend. This means they’ll fully explain the pros and cons of your coverage options, including Original Medicare and the various Medigap, Medicare Advantage, and prescription drug plans—because you deserve to be informed rather than influenced.
You can change your Medicare Advantage plan during the Medicare Open Enrollment Period, which lasts from October 15th through December 7th every year. You can also switch from Original Medicare to Medicare Advantage or from Medicare Advantage to Original Medicare during this time.
You can also change your Medicare Advantage plan once during the Medicare Advantage Open Enrollment Period, which occurs every year from January 1st through March 31st. This period is intended to ensure those who chose a poorly suited plan during the Medicare Open Enrollment Period can correct their decision.
Finally, there are Special Enrollment Periods that allow you to change your Medicare Advantage plan outside of the Open Enrollment Period. Learn more about all the times you can change your Medicare health plan here.