What is Medicare Advantage

Shawn Plummer

CEO, The Annuity Expert

Medicare Advantage has taken center stage in discussions about healthcare in recent times, and for good reason. As an alternative to traditional Medicare, Medicare Advantage offers many additional benefits but with its intricacies. Today, we’re diving deep into understanding Medicare Advantage, how it functions, and its relevance to you.

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Understanding the Basics: Medicare Parts A and B Services

Medicare Advantage, often referred to as Part C, essentially combines the services of Medicare Parts A and B.

  • Medicare Part A: Also known as hospital insurance, Medicare Part A covers inpatient hospital stays, care in a skilled nursing facility, and some home health care. Some beneficiaries might opt for additional home health care insurance to supplement the coverage provided by Medicare.
  • Medicare Part B: Medicare Part B pertains to medical insurance. It covers sure doctors’ services, outpatient care, preventive services, and some home health care.

Example: Imagine you’re hospitalized after a fall. Traditional Medicare covers your hospital stay under Part A, while the doctor’s consultation and some post-hospital services fall under Part B. Under a Medicare Advantage plan, both would typically be covered under the same plan.

What Is Medicare Advantage

The Additional Benefits: Beyond Original Medicare

One of the most enticing features of many Medicare Advantage plans is the provision of additional benefits not covered by traditional Medicare.

  • Dental and Vision Care: Many individuals require routine dental check-ups, glasses, or contact lenses. Medicare Advantage often covers these, whereas traditional Medicare doesn’t.
  • Hearing Aids: A blessing for the elderly who have hearing impairments.
  • Telehealth Benefits: Especially vital in today’s digital age, some MA plans offer telehealth services, allowing patients to consult doctors virtually.

Example: Mrs. Robinson has weak eyesight and needs regular check-ups. Under Medicare Advantage, her vision care might be covered, saving her significant out-of-pocket costs.

Cost Sharing and Monthly Premiums

Medicare Advantage plans often come with a different structure for cost-sharing and may have a monthly premium in addition to the Medicare Part B premium. However, they can also cap out-of-pocket expenses, which original Medicare doesn’t offer. This out-of-pocket maximum can protect enrollees from exorbitant medical bills in case of significant health issues.

Example: Mr. Smith had an unexpected surgery. With his MA plan, he had an out-of-pocket maximum, which ensured he didn’t pay beyond a certain amount.

What Is The Medicare Advantage Plan

Prescription Drug Coverage and MA Plans

A significant number of Medicare Advantage plans include prescription drug coverage. In contrast, with original Medicare, enrollees would need separate prescription drug plans.

Example: Consider Jane, a diabetes patient. An MA plan with integrated drug coverage would mean she doesn’t need a separate plan for her insulin medication.

Enrollment Periods and Eligibility

To join a Medicare Advantage Plan, individuals must be part of Medicare Part A and B. The standard periods for enrollment include the following:

  • Initial Enrollment Period: When you first become eligible for Medicare.
  • Open Enrollment Period: An annual window to change or enroll in plans.

According to the Kaiser Family Foundation, many Medicare beneficiaries now opt for Medicare Advantage during these periods, indicative of its rising popularity.

Medicare Advantage Plan Definition

Provider Networks: In-Network vs. Out-of-Network

MA plans usually have a list of in-network providers. While some plans might allow you to use out-of-network providers, it could be cheaper. There are different types of Medicare Advantage Plans like Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs), each with its approach to in-network and out-of-network services.

Example: If Dr. Adams isn’t in your HMO’s network, seeing him might result in higher costs than an in-network doctor.

Explain Medicare Advantage

The Role of Private Insurance

Medicare Advantage plans are offered by private health insurance companies approved by the federal government. Companies like these have contracts with the government to provide all of your Medicare-covered services. This means the federal government pays these private insurers to provide benefits to Medicare Advantage enrollees.


With its diverse offerings and structures, Medicare Advantage provides an alternative route for beneficiaries seeking comprehensive health coverage. It wraps up services from Medicare parts A and B and often tosses in additional perks like dental, vision, and drug coverage. As with any health plan, it’s pivotal to understand its nuances, out-of-pocket costs, and provider networks. In an ever-evolving healthcare landscape, staying informed ensures you make choices that best cater to your health status and needs.

Medicare Advantage Definition

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Frequently Asked Questions

Are Medicare Advantage plans as good as Medicare?

Whether Medicare Advantage plans are as good as traditional Medicare depends on individual circumstances and preferences; some appreciate the additional benefits and lower premiums that Medicare Advantage can offer. In contrast, others prefer the broader access to healthcare providers that traditional Medicare affords. It is recommended to meticulously compare the specifics of each plan, including provider networks, out-of-pocket costs, and benefits, to determine which is better for an individual’s needs.

What’s the most significant disadvantage of Medicare Advantage?

The most significant disadvantage of Medicare Advantage plans is that they often have narrower networks of doctors and healthcare providers compared to traditional Medicare, limiting your choices and necessitating more out-of-network care. This restriction can lead to higher out-of-pocket costs and reduced flexibility in choosing healthcare providers. It is essential to carefully review any plan’s network before enrolling to ensure it meets your healthcare needs.

Can I drop my Medicare Advantage plan and go back to my original Medicare?

You can drop your Medicare Advantage plan and return to Original Medicare. This can be done during the annual Medicare Open Enrollment Period from October 15 to December 7 or during the Medicare Advantage Open Enrollment Period from January 1 to March 31. During these periods, you can switch plans to find the one that best suits your needs. It is advisable to consult with a healthcare advisor to understand the implications fully and make an informed decision.

Which is more expensive, Medicare or Medicare Advantage?

The cost between Medicare and Medicare Advantage can vary significantly based on the specific plans and individual healthcare needs. Generally, Medicare Advantage plans offer lower premiums than original Medicare, and sometimes they may offer $0 premiums. However, they might have higher out-of-pocket costs when you access services. When combined with a Medigap policy, Original Medicare might have higher upfront costs but can offer more predictable costs and broader access to providers. When choosing a plan, it is essential to compare all potential costs, including premiums, deductibles, and co-payments.

Do most people use Medicare Advantage?

As of 2023, over 51% of all Medicare beneficiaries were enrolled in Medicare Advantage plans, according to Centers for Medicare & Medicaid Services data. The popularity of Medicare Advantage plans has been growing over the years, so it’s recommended to check the most recent statistics to get the current data. Choosing a plan based on individual health needs and financial circumstances is always wise rather than just going with the majority preference.

Is Medicare Advantage an entire risk?

Medicare Advantage plans are not inherently risky; the federal government regulates them to ensure a baseline level of coverage and consumer protections. However, they may pose more risks than Original Medicare regarding potentially higher out-of-pocket costs, restricted networks of healthcare providers, and limitations on covered services. The “risk” can vary significantly depending on the specific plan’s details and an individual’s healthcare needs and preferences. To mitigate risk, it is advisable to thoroughly research and possibly consult with a healthcare advisor before choosing a Medicare Advantage plan.

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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