What is a Medicare Advantage Plan?

Medicare Advantage Plans consist of a variety of private health plans — most often HMOs and PPOs — that private companies offer as an “alternative to the Traditional Medicare program.” However, every plan must cover all the same benefits that Traditional Medicare covers. Each plan can charge different copayments, co-insurance and deductibles. Plans may vary with coverage benefits; therefore, you must carefully read your outline of benefit coverage information. Most Medicare Advantage Plans charge a monthly premium in addition to the Part B premium, but some plans may charge $0 premium. Most include prescription drug coverage at no additional cost. Some cover routine hearing and vision services; sometimes as a separate package for an additional premium. All plans, by law, have annual limits on out-of-pocket costs (maximum out-of-pocket cost for some plans are up to $7,550 in 2022.)

Another difference from the Traditional Medicare program is that most Medicare Advantage plans require you to go to doctors and other providers within their service network or pay higher copays for going out of network. For most HMO plan types, you are usually covered for only emergencies when you travel outside of your network area. Otherwise, you may have to pay the full medical bill (out of pocket) if you travel often and go to medical facilities for non-emergencies.

Note: If you enroll in a Medicare Advantage health plan you cannot use a MediGap policy to cover your out-of-pocket expenses; and it’s illegal for an insurance company to sell you a MediGap policy if you’re enrolled in a Medicare Advantage plan.