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How Medicare Advantage Plans Work

You might be familiar with Original Medicare, but you should also learn what you can about Medicare Advantage plans and Medigap plans. Both offer alternatives to Original Medicare that help you save money, enjoy more coverage, and gain peace of mind.

Medicare Advantage, also called MA or Medicare Part C, come from private insurance companies that Medicare has approved. When you have an MA plan, Medicare pays the private insurance company, and the insurer pays the providers you use.

Read on to learn how Medicare Advantage plans work so you’re more informed about your options.

Types of Coverage From Medicare Advantage Plans

Medicare Advantage typically covers everything from Medicare Parts A and B. In other words, your doctors’ visits and hospital stays will be covered up to the plan’s limits, minus any deductibles, copayments, or coinsurance costs.

Many Advantage plans also cover Medicare Part D. This plan pays for all or part of your prescription drug costs so you don’t have to pay for them out-of-pocket.

Medicare Part C Eligibility

You’ll need Medicare Parts A and B before you can apply for Part C. You can’t have been diagnosed with end-stage renal disease (ESRD), and you have to live in a service area covered by the insurer.

Since you’re applying for Medicare Advantage plans through individual insurers, start your search with your zip code. That way, you won’t waste time investigating plans for which you’re not qualified.

Types of Part C Insurance Plans

There are several different types of health insurance plans available through Medicare Advantage. Health maintenance organizations (HMOs) and preferred provider organizations (PPOs) are the two most common. There are also medical savings accounts (MSAs) and private fee-for-service plans.

Each type of plan covers different types of services. Some, for example, include dental and vision coverage. You might want to investigate these types of plans if you don’t want to pay for glasses, contacts, teeth cleanings, and other services out-of-pocket.

Costs Associated With Medicare Advantage Plans

What you’ll pay for Medicare Advantage plans depends on the specific plan for which you apply. Most involve monthly premiums, though some will cover your Medicare Part B premium.

Lunch with friends, check. Medigap plan, check.

When investigating your options, look for several different types of costs you might have to pay:

  • Premium: Your monthly payment to the insurance company to keep the plan active.
  • Deductible: The amount of money you must pay to providers before the insurance company begins to pick up the costs.
  • Copayments: What you owe to individual providers at the time of services rendered.
  • Coinsurance: The portion of payment to a provider that you owe.

Medicare Advantage Plans Versus Medigap Plans

Medigap, which is also called Medicare Supplemental insurance, is different from Medicare Part C. You’ll have Original Medicare Parts A and B as well as a separate insurance policy that covers different types of costs that Original Medicare doesn’t cover.

Many patients prefer Medigap because it offers more flexibility. It can also increase your savings and help you budget your healthcare costs more efficiently.

Investigate both Medicare Advantage Plans and Medigap plans to decide which is more suitable for your specific needs. You can comparison shop before you turn age 65 so you’re prepared to take advantage of the coverage provided to you.

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