DEFINITION of 'Medicare Advantage'
Hospital and medical insurance (for senior citizens and others who qualify for Medicare) provided by private companies rather than the federal government. Medicare Advantage plans, also called “Part C” plans, provide the same Part A (hospital) and Part B (medical) coverage that Medicare does, with the exception of hospice care. They usually provide Part D (drug) coverage as well. As of 2014, about one-third of Medicare participants used a Medicare Advantage plan. Medicare pays the premiums for participants in Medicare Advantage plans.
BREAKING DOWN 'Medicare Advantage'
The most common types of Medicare Advantage plans are health maintenance organization (HMO) plans, which accounted for about two-thirds of plans in 2014, preferred provider organization (PPO) plans, private fee-for-service (PFFS) plans and special needs plans (SNPS). The basic qualifications to join one of these plans are living in the plan’s service area, having Medicare Parts A and B, and not having end-stage renal disease. HMO point-of-service (HMOPOS) plans and medical savings account (MSA) plans are less common.
You can find a Medicare Advantage plan through Medicare’s online plan-finder tool. You may also be able to enroll in a plan online. You’ll need the information on your Medicare card, including your Medicare number and the dates when your Part A and Part B coverage began, to sign up. You can change Medicare Advantage plans during a specified enrollment period in the fall.
Like other types of health insurance, each Medicare Advantage plan has different rules about coverage for treatment, patient responsibility for costs and more. Also, joining a Medicare Advantage plan may make you ineligible to continue receiving health care coverage through your employer or union.