Medicare Advantage, also known as Medicare Part C, is a popular alternative way to get your Original Medicare (Part A and Part B) health-care benefits. Medicare Advantage plans must cover everything Original Medicare covers, except hospice care, which is still covered by Part A.

If you’re currently enrolled in a Medicare Advantage plan, it’s a good idea to review your plan options from time to time in order to make sure your plan is the best one for your particular needs. Here are a few things to consider before making a switch.

Are there different types of Medicare Advantage plans?

The most common types of Medicare Advantage plans are health maintenance organizations (HMOs), preferred provider organizations (PPOs*), private fee-for-service (PFFS*), and special needs plans (SNPs). Here are the key features of each type of Medicare Advantage plan:

  • HMOs require you to get all your non-emergency care from providers in the plan network. You need to select a primary care doctor to supervise your care and usually need a referral to see a specialist. Most HMO plans include Part D coverage for prescription drugs. HMO plans typically have lower overall plan costs which may offset the more restrictive rules these plans impose.
  • PPOs offer lower out-of-pocket costs if you get your health care within the plan’s network. You typically do not have to select a primary care doctor or get a referral to see a specialist. If you have a HMO plan you may want to switch to a PPO for this freedom. Most PPOs also include Part D prescription drug coverage. PPO premiums tend to be higher than those for HMO plans.
  • PFFS plans generally do not require a primary care doctor or a referral; you are free to use any doctor or hospital that accepts your plan. Keep in mind, however, that not all providers will, even if they participate with Medicare. Some PFFS plans have an associated network of providers who will accept your plan and treat you even if you’ve never been a patient before. They may or may not include Part D prescription drug coverage.
  • SNPs are only open to individuals with a specific serious or chronic health condition, or who are living in a nursing home or other institution, or are eligible for both Medicare and Medicaid. These plans always include Part D coverage for prescription drugs and tend to function more like an HMO in that you are usually required to choose a primary care provider and get referrals for specialist care.

Which Medicare Advantage plans have the lowest out-of-pocket costs?

All Medicare Advantage plans have a yearly cap on out-of-pocket costs, although this figure can vary from plan to plan and from year to year. That said, there are many things to consider when it comes to the actual overall costs of a Medicare Advantage plan:

  • Monthly premiums: You are required to pay your Part B premium, plus any additional premium required by your plan. A zero-premium Medicare Advantage plan means only that the private company offering the plan doesn’t charge a premium beyond your standard Part B premium.
  • Copayments: Copayments vary significantly from plan to plan. Some Medicare Advantage plans may have a copayment system where you have a lower copay for a primary care visit than one for a specialist, for example.
  • Deductibles: Some Medicare Advantage plans have an annual deductible before your benefits kick in. These can also vary widely by plan.
  • Prescription drug costs: If your plan includes Part D prescription drug coverage, the formulary, or list of covered medications, will include your cost-sharing for all the covered medications. Be sure to check that your plan covers any medications you take on a regular basis.
  • Extra benefits: Because Medicare Advantage is offered through private companies approved by Medicare, they may include additional benefits above and beyond Original Medicare, such as coverage for routine vision, dental, or hearing care that may reduce your overall out-of-pocket costs.

When does it make sense to switch Medicare Advantage plans?

There is no one-size-fits-all reason to switch from plan to plan, but there are a few scenarios where a different plan may be right for you. For example:

  • If your health status requires a lot of doctor visits, and your preferred provider is in your plan’s network, switching to an HMO with low copayments and low monthly premiums may save you money.
  • If you travel a lot, switching to a PPO with a national network may cost you less out of pocket, even if the monthly premium is a bit higher.
  • If you generally require a lot of health care services, a plan with a lower out-of-pocket maximum may be more cost-effective for you over the long term.
  • If you take several prescription medications on a daily basis, a plan with lower copayments for those medications may cost less overall, even if monthly premiums are higher.
  • If you need dental work or wear prescription eyewear, a Medicare Advantage plan with those extra benefits could save you more out-of-pocket.

Remember, Medicare Advantage plans are offered by private insurance companies, so not all plan types may be available in all areas, and plan benefits and premiums may vary depending on where you live.

Need more information on Medicare Advantage plans?

I am happy to answer your questions; to get started, simply click the Get Quotes button to schedule a phone call or to request a personalized email.

*Out-of-network/non-contracted providers are under no obligation to treat Preferred Provider Organization (PPO) plan members, except in emergency situations. For a decision about whether we will cover an out-of-network service, we encourage you or your provider to ask us for a pre-service organization determination before you receive the service. Please call our customer service number or see your Evidence of Coverage for more information, including the cost-sharing that applies to out-of-network services.

** A Private Fee-for-Service plan is not Medicare supplement insurance. Providers who do not contract with our plan are not required to see you except in an emergency.