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Medicare Advantage (Part C), a privately offered alternative to Original Medicare (Parts A and B), has grown in popularity over the years. In 1999, 18% of Medicare enrollees chose a Medicare Advantage plan rather than Original Medicare. By 2018, 34% of Medicare enrollees were using Medicare Advantage. Medicare Advantage plans vary in popularity by location, with enrollment rates tending to be highest in or near coastal states and lowest in the center of the country. In some cases, low enrollment rates may reflect fewer plan options in a state. However, on average, seniors have more Medicare Advantage options than ever before.
Despite the growing popularity of Medicare Advantage, some seniors face obstacles that prevent them from truly understanding how it works and who it benefits. Common mistakes about Medicare Advantage include misunderstanding its differences from Original Medicare, getting it confused with other forms of private Medicare insurance (like Medigap or Part D), or not understanding how to look up or evaluate plans. As you navigate your Medicare choices, you’ll likely receive advertisements for Medicare Advantage plans in the mail. And you’ll also probably see numerous news articles about the insurance companies involved in the market. Sifting through all the available information can be daunting.
If you’re considering switching to Medicare Advantage but want to learn more before taking action, this article can provide some clarity about many facets of Medicare Advantage. Read on to learn about eligibility and enrollment, costs, coverage, plan types, and more.
Medicare Advantage Changes for 2022
Before getting into some of the most complex topics involved in Medicare Advantage, you may find it helpful to get a quick update on recent changes to both Medicare and Medicare Advantage.
Part B Premium Changes
Most seniors who use Medicare Advantage will owe Part B premiums. Part B costs vary from person to person, but a “standard” rate applies to the majority of seniors. Between 2020 and 2021 the standard rate increased about $5 per month. The standard rate is now about $148.50 per month for Part B.
Market Variety Improvements
In 2021, the number of available Medicare Advantage plans increased by 13 percent. 402 individual plans were added to the market. The addition of new companies and new plans to the market helped to increase the number of options each consumer has. In 2021, the average senior now has five more Medicare Advantage plans to choose from than he or she had in 2020, and that number is expected to continue to rise heading into 2022.
Higher Out-of-Pocket Costs
All Medicare Advantage plans have an out-of-pocket maximum, or a maximum amount a plan beneficiary will have to pay for their medical costs for the year. For the last several year, the maximum has been $6,700. In 2021, the Medicare Advantage out-of-pocket maximum is $7,550, an increase of $850 per year. However, plans are able to set an out-of-pocket limit below the federally-mandated maximum, so you may find a plan with lower out-of-pocket costs.
Did you know?
Medicare Advantage plans aren’t operated by U.S. government agencies, but they are regulated and studied by them. If you’re ever in doubt about your rights as a Medicare Advantage recipient, this factsheet provided by Medicare.gov is a great place to start. CMS.gov is another resource for understanding Medicare Advantage regulations. But the articles on this site tend to be worded in more technical, legal language.
Who Is Eligible to Enroll in Medicare Advantage?
If you qualify for and are signed up for Original Medicare (Parts A and B), then you are eligible to join Medicare Advantage in all but a few cases. The main exception to qualifying for Medicare Advantage is for those who have End-Stage Renal Disease (ESRD). Patients with ESRD are always eligible for Original Medicare but can rarely join Medicare Advantage plans. (Specialized Medicare Advantage rules for ESRD patients can be found on Medicare.gov.)
Below you can learn more about who qualifies for Medicare Parts A and B and therefore for Medicare Advantage. And you can also explore the time frames during which you can enroll in a Medicare Advantage Plan.
Eligibility for Medicare Parts A and B
Qualifying for Medicare Parts A and B — a prerequisite to getting Medicare Advantage (Part C) — is relatively simple. For many people, enrollment in both A and B occurs automatically. The chart below shows who qualifies for enrollment based on age, disability, or specific diseases.
Enrolling in Medicare Parts A and B |
|
Event Eligibility Is Based On
|
Automatic Enrollment Provided?
|
Enrollment Period for Those Not Automatically Enrolled
|
Based on Age
|
Turning 65
|
Only for those who get SS* retirement benefits at least 4 months before their 65th birthday
|
A 7 month period including:
-3 months before 65th birthday month
-The month of the birthday
-3 months after the 65th birthday month
|
Based on Disability
|
Entering 25th month of receiving disability benefits from SS*
|
Always
|
N/A
|
Based on Specific Disabling Diseases
|
Entering the first month of receiving disability benefits because of ALS or ESRD diagnosis
|
Always
|
N/A
|
*Note: SS stands for Social Security. In this table, enrollment details that apply to seniors receiving SS benefits also apply to seniors who receive Railroad Retirement Board (RRB) benefits.
If your qualification for Medicare is based on age but you missed your initial enrollment period, you will have other chances to enroll. However, you may be subject to “late enrollment penalties.” It’s usually best to complete enrollment as soon as possible.
Medicare Advantage Enrollment Periods
There are six different time periods for joining a Medicare Advantage (Part C) plan after you’ve enrolled in Parts A and B. There’s also a designated time during which you can’t join a Medicare Advantage plan for the first time but you can switch between plans if already in a Medicare Advantage plan.
Open Enrollment Periods
Anyone who has Original Medicare or Medicare Advantage can use the first open enrollment period. But the second open enrollment period only allows changes for people who are already using a Medicare Advantage plan. The designations of first and second are names that we have applied for the sake of clarity. These designations are not used in Medicare’s own literature.
Open Enrollment Periods for Medicare Advantage (MA) and Other Health Plans |
|
Switch From OM* to MA
|
Revert to OM (Drop MA)
|
Drop One MA Plan and Join Another
|
Timeframe for Making Changes
|
First Open Enrollment Period
|
Yes
|
Yes
|
Yes
|
October 15 – December 7
|
Second Open Enrollment Period
|
No
|
Yes
|
Yes
|
January 1–March 31
|
*OM = Original Medicare. Those who have Original Medicare get all A and B services from Medicare itself. See the coverage section of this article for more information.
Enrollment Periods Based on Individual Circumstances
If you’re unable to utilize one of the open enrollment periods, or if you’d like to enroll before or after those periods, chances are good that you’ll qualify for one of the five other Medicare Advantage enrollment periods below.
Enrollment Periods Based on Individual Circumstances |
The Individual Has…
|
Switch From OM to MA
|
Revert to OM (Drop MA)
|
Drop One MA Plan and Join Another
|
Timeframe for Making Changes
|
New Eligibility Based on Age
|
Yes
|
No
|
No
|
3 mo. before birthday month-3 mo. after birthday month (7 mo. total)
|
New Eligibility Based on Disability
|
Yes
|
No
|
No
|
3 mo. before 25th mo. of disability – 3 mo. after 25th mo. of disability (7 mo. total)
|
Been Previously Eligible Based on Disability AND IsTurning 65
|
Yes
|
Yes
|
Yes
|
3 mo. before birthday month-3 mo. after birthday month (7 mo. total)
|
Signed Up for Part B During the “Part B General Enrollment Period”
|
Yes
|
No
|
No
|
April 1-June 30 following the Part B General Enrollment period that the senior used (General Enrollment is January 1-March 31)
|
Enrolled in the “Extra Help” Program
|
Yes
|
Yes
|
Yes
|
During one of the following:
January–March
April–June
July–September
|
In addition to the enrollment periods in our tables, some situations — moving, insurance companies going out of business, and more — allow for special opportunities for making a plan change. To dive into greater detail on questions about eligibility and enrollment for both Medicare Parts A and B and for Medicare Advantage plans (Part C), read “Who is Eligible for Medicare Advantage?”.