WHAT IS Medicare Advantage
Medicare Advantage plans, also referred to as Part C plans, are part of the Medicare program for senior citizens and disabled adults who qualify. Private companies provide Medicare Advantage plans instead of the federal government, and these plans typically include the same Part A hospital, Part B medical coverage and Part D drug coverage that Medicare does, with the exception of hospice care. As of 2017, about one third of the 57 million Medicare participants were enrolled in a Medicare Advantage plan.
BREAKING DOWN Medicare Advantage
Medicare Advantage is a type of Medicare health plan offered by a private company that contracts with Medicare. Medicare pays the premiums for participants in Medicare Advantage plans.
The most common types of Medicare Advantage plans are health maintenance organization (HMO) plans, which accounted for the majority of total Medicare Advantage enrollments in 2017, 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.
Regional PPOs were established to provide rural beneficiaries greater access to Medicare Advantage plans, and cover entire statewide or multi-state regions. Regional PPOs accounted for 7 percent of all Medicare Advantage enrollees in 2017.
How to Enroll in Medicare Advantage
Medicare’s online plan-finder tool includes information about Medicare Advantage plans. To enroll in a Medicare Advantage plan, a consumer must provide the information on their Medicare card, including their Medicare number and the dates when their Part A and Part B coverage began. A consumer can change Medicare Advantage plans during a specified open enrollment period in the fall that typically spans from mid-October to early December.
Like other types of health insurance, each Medicare Advantage plan has different rules about coverage for treatment, patient responsibility, costs and more. Joining a Medicare Advantage plan may make someone ineligible to continue receiving health care coverage through their employer or union, so if employer-based coverage fits a consumer's needs, they may want to hold off on enrolling in Medicare.
All Medicare Advantage plans have an annual limit on out-of-pocket costs, which may make them more cost-effective for certain beneficiaries. Medicare is generally available for people age 65 or older, younger people with disabilities and people with End Stage Renal Disease, which is permanent kidney failure requiring dialysis or transplant.