Medicare Advantage
Another Way to Receive Your Medicare Benefits
Once you understand Original Medicare and your potential financial exposure, the next step is understanding the different ways you can receive and manage your Medicare coverage.
One option is Medicare Advantage, also known as Medicare Part C.
The simplest way we explain Medicare Advantage is:
A Medicare Advantage plan is a private insurance plan that replaces Original Medicare as the way you receive your Medicare-covered benefits.
You are still enrolled in Medicare, but instead of Original Medicare directly administering your Part A and Part B benefits, a private insurance company provides those benefits through a Medicare-approved plan.
That changes how you access your healthcare and how you pay for it.
How Does Medicare Advantage Work?
With Original Medicare, you can generally see any doctor or hospital in the country that accepts Medicare.
Medicare Advantage works differently.
- Medicare Advantage works differently.
- Most Medicare Advantage plans use a network of doctors, hospitals and other healthcare providers.
- Depending on the type of plan, you may need to receive your care within that network to receive the plan's full benefits.
Two of the most common types are:
HMO
With an HMO, you generally need to use healthcare providers within the plan’s network, except in certain situations such as emergency or urgent care.
You may also need referrals or prior authorization for certain services.
PPO
A PPO generally gives you more flexibility.
You typically have a network of preferred providers where your costs are lower, while the plan may also provide coverage for certain services outside the network at a higher cost.
The specific rules depend on the plan.
Instead of Filling the Gaps, Medicare Advantage Changes the Structure
This is an important difference between Medicare Supplement and Medicare Advantage.
A Medicare Supplement works with Original Medicare and helps pay certain costs that Medicare leaves behind.
Medicare Advantage takes a different approach.
Medicare Supplement
Original Medicare + Private Supplement
Medicare remains your primary coverage, and your Medigap policy helps reduce or eliminate many of the financial gaps Medicare leaves behind.
Medicare Advantage
Private Medicare Plan
The private insurance company administers your Medicare Part A and Part B benefits according to the plan’s rules, network and cost-sharing structure.
That’s a fundamentally different way of receiving your Medicare benefits.
What Do You Pay With Medicare Advantage?
Instead of Original Medicare’s cost-sharing structure, your Medicare Advantage plan establishes its own costs for covered services.
Depending on the plan, you may have:
- Monthly premiums
- Deductibles
- Doctor copays
- Specialist copays
- Hospital copays
- Coinsurance
- Prescription drug costs
Many Medicare Advantage plans have a low or even $0 additional monthly plan premium.
But it’s important to understand what “$0 premium” means.
$0 Premium Doesn't Mean $0 Healthcare Cost
You generally still have to pay your Medicare Part B premium.
And as you use healthcare services, you may have copays, coinsurance and other out-of-pocket expenses.
That’s why we don’t believe you should choose a Medicare Advantage plan based only on the monthly premium.
You need to understand what you could pay when you actually use the plan.
Medicare Advantage Has a Maximum Out-of-Pocket Limit
Remember one of the major financial exposures we discussed with Original Medicare?
Original Medicare doesn’t have an annual maximum out-of-pocket limit for Part A and Part B services.
Medicare Advantage plans are required to have an annual maximum out-of-pocket limit for covered Part A and Part B services.
Once you reach your plan’s applicable maximum for the year, the plan generally pays 100% of covered Part A and Part B services for the remainder of that calendar year.
The actual limit and which expenses count toward it depend on the plan.
This is an important number to understand when comparing Medicare Advantage plans.
What About Prescription Drugs?
Many Medicare Advantage plans include Part D prescription drug coverage as part of the plan.
That means you may have:
- Medical coverage + hospital coverage + prescription drug coverage
- combined into one Medicare Advantage plan.
- Some plans also offer additional benefits that Original Medicare doesn't cover, which can vary significantly by plan and location.
Your Network Matters
One of the first things we look at when evaluating a Medicare Advantage plan isn’t the extra benefits.
We look at your doctors.
- Are your primary care physician and specialists in the network?
- What hospitals do you want access to?
- Do you travel or spend significant time in another state?
- Are you comfortable receiving your care through a provider network?
These questions can be more important than whether a plan has a $0 premium or offers additional benefits.
Medicare Advantage Plans Can Change
Medicare Advantage plans operate on a calendar-year basis, and benefits can change from one year to the next.
Changes may include:
- Premiums
- Copays
- Deductibles
- Provider networks
- Prescription drug coverage
- Formularies
- Additional benefits
That’s why Medicare Advantage coverage should be reviewed regularly, particularly during the Medicare Annual Enrollment Period.
Is Medicare Advantage Right for You?
There isn’t one Medicare option that’s right for everyone.
Some people like Medicare Advantage because of its potentially lower monthly premiums, bundled benefits and annual out-of-pocket protection.
Others prefer Original Medicare with a Medicare Supplement because they value broader provider access and more predictable medical expenses.
Our job isn’t to tell you which one is “better.”
Our job is to make sure you understand what you’re choosing.
We look at:
- Your doctors.
- Your hospitals.
- Your prescriptions.
- Your budget.
- Your travel habits.
And your comfort with potential out-of-pocket costs.
Then we help you understand which approach best fits your needs.
Understand the Trade-Off
We like to simplify the decision this way:
Original Medicare + Medigap
Pay more upfront in monthly premiums to reduce or eliminate much of your financial exposure and maintain broad access to Medicare providers.
Medicare Advantage
Potentially pay less in monthly plan premiums, but accept a provider network, plan rules and more pay-as-you-use cost sharing.
Understanding the trade-off is what allows you to make an informed decision.
Have Questions About Medicare Advantage?
We’ll help you compare your options and understand the benefits, costs and limitations before you make a decision.