Medicare Advantage (Part C): Your Comprehensive Guide 2023

Understand Medicare Advantage eligibility, enrollment, coverage, costs, and more.

Medicare Part C, also referred to as Medicare Advantage, is a health insurance plan offered by Medicare-approved private insurance companies.

Medicare Advantage plans provide the full coverage of Medicare Parts A and B, and often times Part D (prescription drug coverage), as well.

In addition to this coverage, Medicare Advantage plans typically offer extra benefits like dental, vision, hearing, and wellness programs.

Medicare Advantage Guide Topics:

• How Do Medicare Advantage Plans Work?

• Should I Purchase a Medicare Advantage Plan?

• Plan Costs for Medicare Advantage

• Am I Eligible for Medicare Advantage?

• Enrolling in a Medicare Advantage Plan

• What Does Medicare Advantage Cover?

• What If My Medicare Advantage Plan is Ending?

How Do Medicare Advantage Plans Work?

While Medicare Advantage plans bundle the same coverage provided by Original Medicare (along with additional coverage), technically these two options are not the same.

Medicare Advantage is an alternative choice to Original Medicare.

The main difference between the two is that with Original Medicare you receive your benefits directly from the federal government, whereas with Medicare Advantage you receive your benefits through a private insurance plan.

Your Medicare Advantage plan receives a fixed amount from Medicare each month to cover the medical costs of the plan’s beneficiaries.

As part of this agreement, Medicare sets rules for the private insurance companies to follow.

Even though all Medicare Advantage plan must follow the rules set by Medicare, each plan can vary when it comes to out-of-pocket costs and setting their own rules of service.

For example, Medicare Advantage plans might differ in their rules for where you can visit for non-emergency care, or whether a referral is required to see a specialist.

Your plan’s rules can change from year to year.

Should I Purchase a Medicare Advantage Plan?

If you’re interested in purchasing additional coverage beyond what’s offered by Original Medicare, there are two options you can choose between.

Option 1:

Keep your Original Medicare coverage and add additional coverage by purchasing Medicare Part D (prescription drug coverage) and/or a Medigap plan (supplement plan for costs not covered by Medicare).

Option 2:

Purchase a Medicare Advantage Plan, which bundles the coverage of Original Medicare, often times Part D, and additional benefits that vary from plan to plan.

If you’re interested in adding additional coverage, you must choose between these two options. You cannot blend or mix coverage from option 1 and option 2.

For example, you cannot have a Medicare Advantage plan and also purchase a Medigap plan.

In fact, it’s illegal for anyone to sell you a Medigap plan in this case (unless if you’re switching back to Original Medicare coverage).

If you do want to switch back to Original Medicare, contact your Medicare Advantage plan provider to learn how to disenroll from your plan.

If you currently have a Medigap plan and decide to join a Medicare Advantage plan, you’ll want to drop your Medigap policy.

Your Medigap policy coverage will become redundant and cannot be used to cover any of your Medicare Advantage plan costs, such as monthly premium, copayments, or deductibles.

Plan Costs for Medicare Advantage

Medicare Advantage plan costs often differ from one plan to another.

This is due to the variety of benefits that a plan can offer and the variety of private companies that offer those plans.

There are common traits among these plans, however. The majority of plans charge a monthly premium, which is in addition to your Medicare Part B premium.

So, you’ll have two monthly premium payments.

Additionally, most Medicare Advantage plans cap out-of-pocket costs at no more than $7,550. This does not include prescription out-of-pocket costs.

Costs To Weigh When Deciding on a Plan

An important cost to look at is the Maximum Out-Of-Pocket limit, which also goes by the abbreviation “MOOP.”

While most plans follow the general limit on out-of-pocket costs of $8,300 for 2023, many plans cap their out-of-pocket costs below this amount.

So, it’s worthwhile to compare the max out-of-pocket costs between different Medicare Advantage plans.

Other costs that vary between plans are the costs for health care services and how often enrollees receive them, as well as the copayment for doctor visits.

Medicare Advantage Out-Of-Pocket Costs

There are a number of elements that will determine your out-of-pocket costs in a Medicare Advantage plan.

Here are some of the factors that will impact your out-of-pocket costs:

• The annual limit your plan places on out-of-pocket costs for medical services.

• The monthly premium your plan charges. Some plans do not have monthly premiums.

• The amount your plan helps to pay for your Medicare Part B monthly premium. Some plans pay a percentage of your Part B premium, while others do not.

• If your plan has any deductibles, annual or otherwise.

• Copayment or coinsurance amounts that you pay for visits or services.

Additional factors that will vary with each individual:

• Which healthcare services you require and how often you need them.

• If you require extra benefits and if your plan charges for them.

• If you use network providers or go out-of-network.

• If you have Medicaid or receive help from the state.

Check Your Plan Costs Each Year

Each year, your Medicare Advantage plan determines what its costs will be for that year’s premium, deductibles, and plan services.

While these cost amounts can change from year to year, they cannot change more than once a year. The change in price can only occur once on January 1st.

The best way to keep up-to-date on these costs is by reviewing the notices that your plan sends you.

Each fall you should receive notifications for “Evidence of Coverage” (EOC) and “Annual Notice of Change” (ANOC).

Your Evidence of Coverage will detail what your plan covers and how much you will pay.

While your Annual Notice of Change will detail if any changes in coverage, cost, or service area took place.

If any changes did occur, they will be effective in January of the upcoming year.

If you don’t receive these documents from your Medicare Advantage plan provider, be sure to contact your provider.

Am I Eligible for Medicare Advantage?

In order to be eligible for a Medicare Advantage plan, you must meet the following criteria:

• Currently have Medicare Part A and Part B.

• Live in the service area of the plan you wish to join.

If the above criteria apply, you should generally be eligible to join one of the following Medicare Advantage plans: Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Private Fee-for-Service (PFFS), or Medical Savings Account (MSA) Plan.

For those that currently have a union or employer-sponsored insurance plan, you might have the option of adding a Medicare Advantage plan.

However, in some cases, you may lose your union or employer-sponsored coverage by enrolling in the Medicare Advantage plan.

If this is a concern for you, consult with your current plan provider before acting.

Note: A new change to Medicare Advantage eligibility applies to Medicare beneficiaries with End-Stage Renal Disease (ESRD).

Starting in January of 2021, these beneficiaries are now allowed to join Medicare Advantage plans.

Enrolling in a Medicare Advantage Plan

It’s important to understand that not all Medicare Advantage plans are the same.

So, before you join a plan, be sure to research and compare the plans that are available to you in your area.

Look to the plan’s costs and rules, as these will be unique from plan to plan.

The best tool for finding and comparing plans in your area is Medicare’s Plan Finder.

The plan finder allows you to shop for both Medicare Advantage plans and Part D drug plans. If you require additional assistance with signing up, you can call Medicare at: 1-800-633-4227 (TTY: 877-486-2048)

When you sign up for your Medicare Advantage plan you’ll need to have your Medicare number available, as well as the start date for your Part A coverage (and Part B if applicable).

Both of these items can be found on your Medicare card.

How to Switch Medicare Advantage Plans

If you’re currently in a Medicare Advantage plan but want to switch to a different one, simply join your desired plan during an enrollment period.

You’ll be automatically disenrolled in your current plan once the coverage of your new plan begins.

How to Switch From Medicare Advantage to Original Medicare:

If you’re currently in a Medicare Advantage plan but want to switch back to Original Medicare coverage, contact your plan provider or contact Medicare at: 1-800-633-4227 (TTY: 877-486-2048).

If you make this decision, remember that you’ll want to consider Medicare Part D prescription drug coverage, as well as a Medicare Supplement plan (Medigap) to help cover your healthcare costs and needs.

Note that you’ll only be able to make this switch during certain periods: Open Enrollment Period (October 15 – December 7) and Medicare Advantage Open Enrollment Period (January 1 – March 31).

If you return to Original Medicare from your Medicare Advantage plan within 12 months of joining, you’ll have special rights to purchase a Medigap policy.

After 12 months, these special rights no longer apply and you may face difficulties joining a Medigap plan or higher rates.

If you had a Medigap plan before you joined Medicare Advantage, you might be allowed to return to that same plan if it’s still offered by the private company.

However, your Medigap plan can longer provide prescription drug coverage (even if it was part of your plan before), but you may be able to join a Part D plan.

If you joined your Medicare Advantage plan once you were first eligible for Medicare, you’ll be able to choose from any available Medigap policy.

Also, take a look to see if your particular state offers additional special rights, as some states provide more than the general special rights listed here.

What Does Medicare Advantage Cover?

For starters, your Medicare Advantage plan covers all of the services that are covered by Original Medicare (Parts A and B).

You’ll also find that most plans cover Medicare Part D prescription drug coverage and offer extra benefits not covered by Medicare like vision, dental, hearing, and health and wellness programs.

Additionally, all Medicare Advantage plans cover you for emergency care and urgent care.

However, when Medicare considers services to be not medically necessary, your plan can choose not to cover the costs of those services.

In this case, you may have to pay the entire costs of the service, though you do have the right to appeal the decision.

If you’re ever unsure whether or not your service is covered by your plan, contact your plan provider prior to the service.

In fact, sometimes you must request a determination from your plan in advance in order for the item or service to be covered.

This process is called an organization determination. If your plan ultimately denies you coverage for the item or service, they must notify you in writing.

Recently, as of 2019, Medicare Advantage plans are now allowed to offer a broader set of additional benefits to address a more comprehensive approach to your health.

For example, plans can now include caregiver support services, in-home support services, medical transportation, therapeutic message, and more.

Additionally, as of 2020, Medicare Advantage plans have more coverage options.

These options include transportation to a doctor’s appointment, access to educational programs and nutritionists, installation of home improvements (such as ramps or wider hallways and doors), and more.

These new additions are all aimed at addressing the many factors in a person’s life that contribute to their overall well being and health.

Medicare Advantage Plan Types

When it comes to choosing your Medicare Advantage plan, there are six different plan types to know about. However, it’s possible that not all six will be available in your area.

• Health Maintenance Organization (HMO)

• Preferred Provider Organization (PPO)

• Health Maintenance Organization Point of Service (HMO-POS)

• Private Fee For Service (PFFS)

• Medical Savings Account (MSA)

• Special Needs Plan (SNP)

If you go with an HMO, HMO-POS, or SNP, you’re responsible for choosing your own primary care doctor. This is not the case with a PPO, PFFS, or MSA.

Also, note that HMOs and SNPs require that you get a referral prior to seeing a specialist.

Additionally, HMOs require that you only receive care from doctors that are in the plan’s network.

Medicare Advantage Prescription Drug Coverage

It’s common for Medicare Advantage plans to include prescription drug coverage.

If you’re currently in a Medicare Advantage HMO or PPO and join a separate Medicare prescription drug plan, you’ll be disenrolled from your plan and returned to Original Medicare.

However, you may be able to join a separate Medicare prescription drug plan while currently in a Medicare Advantage plan if your plan can’t offer drug coverage (such as in the case of a Medicare MSA plan) or if your plan chooses not to offer drug coverage (such as in the case of some PFFS plans).

What If My Medicare Advantage Plan is Ending?

While not a very common occurrence, Medicare Advantage plans can decide to stop participating in Medicare.

If this happens with your plan, you’ll be notified that your plan is ending at the end of the year and receive a letter detailing your options moving forward.

At this point, were you to do nothing, you would be automatically enrolled in Original Medicare with coverage starting January 1st of the following year.

Some people choose to enroll in a new Medicare Advantage plan. You will qualify for a Special Enrollment Period to do so because your old plan is ending.

If you would rather return to Original Medicare, you’ll have the right to purchase a Medigap plan.

Remember: No matter what you decide, you won’t have to worry about losing Medicare coverage.

At the very least you will go back to your Original Medicare coverage, which will start the very first day after your Medicare Advantage plan ends.

But if you require prescription drug coverage, be sure to join a Medicare Part D plan.