What Is Medicare Advantage?

Medicare Advantage plans have become increasingly popular in recent years. Once you’re done reading this article, you’ll understand why. But, before you jump into enrollment, you should take time to make sure you understand how Medicare Advantage works and what kind of options you have to choose from.

How Does Medicare Advantage Work?

There are several names for Medicare Advantage plans. You’ll hear them referred to as Medicare Part C or see them abbreviated as MA or MAPD plans. MAPD plans include prescription drug coverage. You can think of the “PD” as either “prescription drugs” or “Part D,” which is the Medicare part that includes drug plans.

So, how do Medicare Advantage plans work?

The federal Medicare program allows private insurance companies to offer Part C plans to Medicare beneficiaries. Every Advantage plan must meet minimum requirements, which means they must include all the same benefits as Original Medicare (Part A and B), other than the hospice feature, which will continue to be provided by Medicare Part A.

If you enroll in Medicare Advantage, you’ll get your Part A and Part B benefits from the private insurance company rather than the federal government. In return, the Medicare program pays the insurance company to provide the coverage. This helps minimize government costs.

In addition to those benefits, most Advantage plans include extra coverage you won’t find in Original Medicare. For example, some include prescription drug coverage, gym memberships, vision exams and eyeglasses, dental care (like cleanings, dentures, and other restorative treatment), hearing aids, transportation, meal delivery, adult daycare, and more. You might even find an Advantage plan that offers a Part B premium giveback, which reduces your Part B premium.

You won’t find those benefits in Original Medical or a Medigap plan. You’d have to enroll in separate policies to get just some of those benefits, requiring additional premiums and multiple insurance cards to keep track of!

What Are the Types of Medicare Advantage Plans?

One of the most important things to know about Medicare Advantage plans is that there are four different kinds of plans. The one you choose will have a significant impact on which doctors you can see and the way your plan works.

The four kinds of Advantage plans are:

1. Health Maintenance Organizations (HMO)
2. Preferred Provider Organizations (PPO)
3. Private Fee-for-Service Plans (PFFS)
4. Special Needs Plans (SNP)

We won’t get into the details of each one here, but to give you a clue as to why it’s important to know which kind of plan you have, let’s talk briefly about the difference between an HMO and a PPO plan.

With an HMO (Health Maintenance Organization) plan, you must see a doctor that participates in the plan’s network. If you see a non-HMO provider, you will have no coverage for services, and you’ll be responsible for the entire cost. With a PPO (Preferred Provider Organization) plan, you’ll have fewer out-of-pocket costs if you visit a PPO provider, but you’ll still have some coverage if you see a non-contracted provider. That’s a big difference in just one of the features of these plans. 

Medicare Advantage Enrollment Periods

You must be enrolled in Medicare A and B to apply for Medicare Advantage. The first time to enroll in Medicare and Medicare Advantage is during your Initial Enrollment Period (IEP), the 7-month window around your 65th birthday.

You can also enroll in Part C if you qualify for a Special Enrollment Period. A number of life events could qualify you for a SEP. Some of these events include losing employer coverage, moving to a new location or into or out of an institution, and losing or gaining Medicaid assistance. The full list of qualifying events is quite lengthy, so if you’ve had a significant life change, it may be worth finding out if you’re eligible for a SEP.

Another important enrollment period is the Annual Enrollment Period or AEP. It occurs every fall from October 15 to December 7. You can change your Medicare Advantage plan during this time. Any changes you make will go into effect on January 1.

The last enrollment period that pertains to Part C is the Medicare Advantage Open Enrollment Period (MA OEP). It runs from January 1 through March 31. If you are already enrolled in a Part C plan, you can make a one-time change to your plan. The change will go into effect the following month.

If you’d like to learn more about Medicare Advantage, speak with one of our licensed insurance agents. We have local Medicare agents who understand your market and will make suggestions that fit your needs.