A Medicare Advantage Plan (like an HMO or PPO) is another Medicare health plan choice you may have as part of Medicare. Medicare Advantage Plans, sometimes called “Part C” or “MA Plans,” are offered by private companies approved by Medicare. If you join a Medicare Advantage Plan, you still have Medicare. You will get your Part A (Hospital Insurance) and Part B (Medical Insurance) coverage from the Medicare Advantage Plan and not Original Medicare. In all types of Medicare Advantage Plans, you’re always covered for emergency and urgent care. Medicare Advantage Plans must cover all of the services that Original Medicare covers except hospice care. Original Medicare covers hospice care even if you’re in a Medicare Advantage Plan. Medicare Advantage Plans aren’t supplemental coverage.
Medicare Advantage Plans may offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs. Most include Medicare prescription drug coverage (Part D). In addition to your Part B premium, you usually pay a monthly premium for the Medicare Advantage Plan.
Medicare pays a fixed amount for your care every month to the companies offering Medicare Advantage Plans. These companies must follow rules set by Medicare. However, each Medicare Advantage Plan can charge different out-of-pocket costs and have different rules for how you get services (like whether you need a referral to see a specialist or if you have to go to only doctors, facilities, or suppliers that belong to the plan for non-emergency or non-urgent care). These rules can change each year.
There are four common types of Medicare Advantage Plans:
- Health Maintenance Organization (HMO) Plans—In most HMOs, you can only go to doctors, other health care providers, or hospitals on the plan’s list except in an emergency. You may also need to get a referral from your primary care doctor.
- Preferred Provider Organization (PPO) Plans—In a PPO, you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. You pay more if you use doctors, hospitals, and providers outside of the network.
- Private Fee-for-Service (PFFS) Plans—PFFS plans are similar to Original Medicare in that you can generally go to any doctor, other health care provider, or hospital as long as they agree to treat you. The plan determines how much it will pay doctors, other health care providers, and hospitals, and how much you must pay when you get care.
- Special Needs Plans (SNP)—SNPs provide focused and specialized health care for specific groups of people, such as those who have both Medicare and Medicaid, who live in a nursing home, or have certain chronic medical conditions.
There are also several other, less-common types of Medicare Advantage Plans including:
- HMO Point-of-Service (HMOPOS) Plans—This is an HMO plan that may allow you to get some services out-of-network for a higher copayment or coinsurance.
- Medical Savings Account (MSA) Plans—This is a plan that combines a high deductible health plan with a bank account. Medicare deposits money into the account (usually less than the deductible). You can use the money to pay for your health care services during the year.
You don’t need to buy (and can’t be sold) a Medicare Supplement Insurance (Medigap) policy while you’re in a Medicare Advantage Plan. If you already have a Medigap policy and join a Medicare Advantage Plan, you will probably want to drop your Medigap policy. You can’t use it to pay for any expenses (copayments, deductibles, and premiums) you have under a Medicare Advantage Plan.