May 19, 2011
Medicare Advantage Health Plans
Medicare Advantage Health & Drug Plan = Medical Benefits + Prescription Drug Coverage
Private insurance companies offer Medicare health plans, known as Medicare Advantage, that provide the standardized hospitalization and medical benefits on Medicare Part A and Part B. Medicare Advantage is sometimes referred to as Medicare Part C. Medicare Advantage plans are regulated by Medicare. Some Medicare Advantage plans include additional benefits that are not part of Part A and Part B such as prescription drug coverage. Medicare Advantage plans are required to deliver benefits at least as good as original Medicare Part A and Part B but the Medicare Advantage plan does not have to deliver these benefits in the same way. Some plans have used the higher compensation rates they received from the Medicare program to offer additional benefits beyond Part A and Part B (e.g. dental benefits or vision benefits).
Medicare Advantage plans deliver their benefits to plan members through one or more of the following options:
- HMO - A health maintenance organization (HMO) is a network of health care providers and facilities where you choose a primary care physician to coordinate your care
- PPO - A preferred provider organization (PPO) is also a network of health care providers and facilities but typically you do not need to select a primary care physician and you have more flexible options regarding out-of-network care
- PFFS - A private fee-for-service (PFFS) is a mode of benefit delivery where you are not limited to a network but there are no guarantees that your doctor or hospital will accept the plan
Medicare Advantage plans became known as Medicare Advantage in 2003 due to the Medicare Prescription Drug, Improvement, and Modernization Act. Prior to this act, Medicare Advantage was known as "Medicare+Choice." Medicare Advantage is sometimes referred to as Medicare Part C. Medicare Advantage plans are available in every U.S. state though the number of Medicare Advantage plans varies by state. Premiums for the same Medicare Advantage plan can vary among counties within the same state.
Medicare Advantage plans often cost less than Medicare Supplement plans but cover different benefits. Recent changes to healthcare in the U.S. may eventually increase Medicare Advantage monthly premiums so it is important to compare Medicare Advantage plans before enrolling. Some Medicare Advantage plans offer premiums as low as $0. However, with recent legislation changing the compensation rate the plan is paid for Medicare Advantage services, these $0 premiums may become less widely available.
Medicare Advantage plans are very different than Medicare Supplement plans. While Medicare Advantage plans deliver Part A and Part B benefits, Medicare Supplement plans are designed to provide coverage around gaps and cost sharing of Part A and Part B. See our Medicare Advantage vs. Medigap article for more information.
Before enrolling in a Medicare Advantage plan, it is important to confirm whether the Medicare Advantage plan has drug coverage. Most, but not all, Medicare Advantage plans offer drug coverage. However, if you have existing creditable drug coverage, you may be interested in a Medicare Advantage plan without drug coverage.
Each Medicare Advantage plan has its own list of covered drugs. You should use our comparison tool to verify that a Medicare Advantage plan covers your drugs before enrolling.
What is Medicare Advantage?
Click here for the full video transcript.
Eligibility
People enrolled in both Medicare Part A and Part B are eligible to enroll in Medicare Advantage. Medicare Advantage eligible individuals must wait to enroll during an approved enrollment period. Individuals with End Stage Renal Disease (ESRD) cannot enroll in a Medicare Advantage plan.
After enrolling in Medicare Advantage, you are responsible for continuing payment of your Medicare Part B premium alongside the Medicare Advantage premium. Medicare Advantage enrollees may enroll in the Low Income Subsidy (a.k.a. Extra Help program) if they satisfy the eligibility criteria set by the government.
After enrolling in a Medicare Advantage plan, you should still keep your red, white, and blue Medicare card for your records.