Medicare Advantage Plans

Medicare Advantage Plans (also called Medicare Part C) are health plan options that offer an alternative to Original Medicare (Parts A and B).

What is Medicare Advantage/Part C?

Medicare Advantage (also called Medicare Part C) is a private health insurance alternative to the Original Medicare (Parts A and B), which leaves behind lots of gaps in coverage. If you join one of these plans, you generally get all your Medicare-covered health care through the Medicare Advantage Plan. This coverage can include prescription drug coverage. Medicare Advantage Plans include:

  • Medicare Health Maintenance Organization (HMOs)

  • Preferred Provider Organizations (PPO)

  • Private Fee-for-Service Plans

  • Medicare Special Needs Plans

When you enroll in a Medicare Advantage Plan, you’re removed from the Original Medicare system. You use the health insurance card that you get from the plan for your health care, which means needing to carry around only one card rather than several. In most of these plans, there generally are extra benefits and lower co-payments than in the Original Medicare Plan. Most Medicare Advantage Plans are managed care plans—usually a health maintenance organization (HMO) or a preferred provider organization (PPO). Because you are no longer part of the Original Medicare system—but rather part of the private network created by your insurance carrier—you may be restricted to seeing doctors that belong to the plan or have to go to certain hospitals to get services.

To join a Medicare Advantage Plan, you must have Medicare Part A and Part B. You’ll still have to pay your monthly Medicare Part B premium to Medicare. In addition, you may have to pay a monthly premium to your Medicare Advantage Plan for the extra benefits that they offer. In 2024, the standard Part B premium amount is $174.70 (or higher depending on your income). However, some people who get Social Security benefits pay less than this amount.

Why Choose Medicare Part C?

Medicare Parts A and B cover a few preventive services, medically necessary services, inpatient care at a hospital, and skilled nursing facility stays, but don’t cover elective health services or most preventive health services.

This means that outside of an annual exam, you’ll have to pay out-of-pocket for any additional visits to the doctor. If you need any kind of elective surgery, that most likely won’t be covered.

Because Medicare Part C plans cover the same services as Medicare Parts A and B, while also offering coverage for things not covered by Original Medicare (such as vision, dental, hearing, and even prescription medications), Medicare Part C plans are often seen as a one-stop-shop. They tend to cover many services while maintaining a low monthly premium with many managing a premium as low as $0. In exchange, however, Part C plans use a pay-as-you-go system. How often you need to use your plan is how often you can expect to pay for treatment.

The Disadvantages of Medicare Advantage

  • You still have to be enrolled in Medicare Parts A and B to enroll in an Advantage plan, and you’re still responsible for the monthly Part B premium.

  • Because you’re part of the private network created by your insurance carrier, you’re restricted to visiting doctors and hospitals that are in-network, unless you want to pay a large out-of-network expense.

  • Medicare Advantage plans often require pre-authorization for specific treatments. This means that the insurance provider has the authority to approve or deny a treatment, procedure, or test based on their assessment of its necessity.

  • Their switching policy is convoluted, and it can be difficult to switch plans because the company must approve the switch. If they don’t qualify you for it, you can’t switch.