Get the Scoop on Medicare Advantage

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More than 23 million Americans currently receive their health benefits through a Medicare Advantage plan. There’s much to like about these plans, which provide extra services and make coverage more affordable than traditional Medicare by capping out-of-pocket costs.

It’s no surprise that a 2018 poll found a whopping 90% of people with Medicare Advantage plans are satisfied with their coverage.

But do you understand the ins and outs of Medicare Advantage? 

What is a Medicare Advantage Plan?

Medicare Advantage plans (also known as Medicare Part C) are offered by private health insurance providers that have been approved by Medicare. These companies receive government funding to cover your Medicare benefits and keep you healthy.

With traditional Medicare, the federal government pays your providers directly.

What do Medicare Advantage Plans Cover?

If you join a Medicare Advantage plan, that plan will provide all of your Medicare Part A (hospital insurance) and Medicare Part B (medical insurance) coverage. But that’s not all.

Medicare Advantage plans cover many things that traditional Medicare doesn’t cover. These extras can include vision, hearing and dental benefits, as well as wellness programs. Many Medicare Advantage plans give seniors access to affordable prescription drug plans, often at no additional cost.

And all Medicare Advantage plans limit the amount you must spend out of pocket for deductibles, copayments, and coinsurance each year for covered Medicare services.

Who is eligible to purchase a Medicare Advantage plan?

You must already be covered by Medicare Parts A and B to join a Medicare Advantage plan. You also must live in the Medicare Advantage plan’s service area.

The Medicare Annual Election Period (AEP) which lasts from mid-October until early December, is when you can initially sign up, switch, or leave your Medicare Advantage plan.  You can also switch Medicare Advantage plans or from Medicare Advantage to traditional Medicare from January 1 until March 31 if you change your mind.

Are all Medicare Advantage plans the same?

There are different options to meet different health and financial needs. Just as with individual or employer-sponsored insurance, several types of Medicare Advantage policies are available. The most common types of Medicare Advantage plans are:

  • Health Maintenance Organizations (HMOs)
  • Preferred Provider Organizations (PPOs)

You also may see Medicare Advantage plans called Private Fee-for-Service (PFFS) and Medical Savings Account (MSA) plans.

If you are eligible for Medicaid, have a chronic condition, or live in a nursing home, you may also be able to sign up for another type of Medicare Advantage tailored to your specific needs called a Special Needs Plan (SNP).

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While many Medicare Advantage plans are available at no additional cost, some charge premiums or have costs for optional services. Which providers are in the plan’s network also varies. That means it’s important to comparison-shop carefully, just as you do for other important expenditures. 

You’ll want to understand specific costs and benefits before you join. The online tool Medicare Plan Finder at Medicare.gov can help you can find and compare policies in your area.

Is a Medicare Advantage plan the same thing as a Medicare Supplement Insurance (Medigap) policy?

No. A Medigap policy is private insurance that helps supplement traditional Medicare. This means it helps pay some of the health care costs that traditional Medicare doesn’t cover (like copayments, coinsurance, and deductibles).  

While a Medigap policy does help to supplement the Medicare Hospital (Part A) and Medical (Part B) coverage, it does not include Prescription Drugs (Part D) and this would need to be purchased separately, if choosing Medigap.

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