Medicare Advantage (Medicare Part C)

Page Reviewed / Updated - October 10, 2020

Written By: Laura Larimer

Expert Reviewed By: Joshua Iversen, President, Syzygy Financial LLC

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 2020

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 2019 and 2020 the standard rate increased almost $10 per month, for a total yearly cost increase of approximately $120. The standard rate is now about $144 per month for Part B. 

Market Variety Improvements
In 2020, thirteen insurance companies entered the Medicare Advantage market while just one left it. Additionally, 414 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 2020, the average senior now has four more Medicare Advantage plans to choose from than he or she had in 2019.

Telehealth Expansion
Medicare used to be resistant to covering telehealth (doctor visits that occur over the phone or via video calls). In recognition of the needs of rural, medically fragile, and immobile seniors, Medicare expanded telehealth access in 2019 and will likely continue to expand it in 2020 and beyond. Improved access in Original Medicare means improved access within Medicare Advantage plans as well. You can learn more about Medicare and Medicare Advantage’s evolving approach to telehealth on the official Medicare website.

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.

*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.

*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.

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?”.

The Cost of Medicare Advantage Plans

When we talk about the costs of Medicare Advantage, “costs” mean different things in different contexts. In this section, “costs” is the upfront, recurring costs of premiums rather than the costs of receiving healthcare under the plan. Other aspects of Medicare Advantage costs will be detailed under the section of this article that addresses coverage.

Understanding the Three Premiums of Medicare Advantage

In order to get and keep a Medicare Advantage plan, you will need to pay anywhere from 0-3 different premiums, depending on the plan. This table breaks down the reasons seniors can owe different premiums.

*Note: In some cases, qualifying for Medicaid can make you eligible to get help with premiums.

As the chart above indicates, there are three possible premiums for Medicare Advantage participants. But many seniors will only owe one or two of them, and some seniors will owe no premiums. Medicare Savings Programs, which vary by state, can pay Part B premiums for some low-income seniors. To learn about these and other forms of assistance with Medicare Advantage costs, you can read “Paying for Medicare Advantage: Costs and Financial Assistance.”

Ways to Pay Your Premium Bills

With three different possible premiums and two different organizations collecting payment (Medicare itself plus the private insurance company that you choose), you may be wondering where you send your premium payments under Medicare Advantage. There are many ways to pay. If you get SS benefits, then your Part A and Part B premiums can be deducted from your benefit automatically each month. It’s possible to also have your Medicare Advantage premium deducted from your retirement benefits. But you’ll have to reach out to SS and/or your insurer to set this up. Alternatively, you can arrange to pay for all premiums in a variety of other ways, including online with credit and debit cards, with automatic bank transfers, with Medicare Easy Pay (also automatic), or by mail. Explore all of your Parts A and B options on the official Medicare website, and ask the private insurance company of your choice about your Part C payment options.

Coverage Available Through Medicare Advantage

Coverage isn’t the same for all Medicare Advantage plans. To really understand coverage, and the costs associated with high and low levels of coverage, you’ll need to get a clear idea of what coverage is considered mandatory and what’s considered extra.

Mandatory Coverage

All Medicare Advantage insurers (sometimes called Medicare Advantage Organizations/MAOs) must offer coverage that’s equivalent to what Medicare Parts A and B offer under Original Medicare (OM). Below you can learn more about Parts A and B.

What Is Part A Coverage?
Part A is usually referred to as “hospital coverage.” Under Original Medicare, seniors can get full to partial coverage for the cost of spending time in a hospital or similar inpatient settings. In 2020, on days 0-60 the patient pays $0 per day, but on days 61-90 they pay $352 per day. Costs increase the longer you stay, and more details can be found here. The level of coverage that a private Medicare Advantage plan provides for these services should be as high as or better than what Part A covers. 

What Is Part B Coverage?
Part B Coverage encompasses “medical” and “preventative” services and items. This includes:

• Office visits with specialists and general practitioners
• Some prescription medications that are administered in-office
• Numerous tests and procedures
• A variety of medically necessary Durable Medical Equipment (DME) such as canes, blood sugar monitors, oxygen equipment and accessories, and much more

What If I Have More Specific Questions About Parts A and B?
For more in-depth information on specific items covered by Parts A and B, you can visit Medicare’s website. Keep in mind that this website shows what Original Medicare covers. Many health plans on the Medicare Advantage market will choose to offer more coverage.

Extra Coverage

As mentioned above, most Medicare Advantage plans offer more comprehensive coverage than Original Medicare. Extra coverage can be provided in one of two basic ways. It could be “extra” because it covers a larger portion of the cost of an item than Original Medicare does. For example, there may be a test that Original Medicare pays for 80% of, but a Medicare Advantage plan that you find might cover 95%-100% of it. The other way that coverage can be “extra” is if a plan chooses to cover something that Original Medicare never covers. An example of this is if a Part C plan covers a portion of the cost of hearing aids. Original Medicare never covers hearing aids, so if a health plan covers even a portion of their cost it's a huge benefit for the patient.

The Most Common Forms of Extra Coverage:

• Prescription Drugs (Part D)
• Hearing 
• Dental
• Vision
• Fitness
• Transportation

Many other forms of extra coverage are available, but what you can find largely depends on the area that you live in. You can find more information on extras and many other facets of coverage in “What Does Medicare Advantage Cover?”.

Medicare Advantage Plans Explained

Under Medicare Advantage rules, insurance companies can create several different styles of health plans. While everything explained in the coverage section of this article still applies, plan styles impact how and where the patient gets covered items and services.

Plan Coverage Limits and Patient Protections

Medicare Advantage insurers are allowed to place conditions on how they cover patients. But they must also protect patients and listen to their concerns. Explore the basic definitions of both plan coverage limits and patient protections below so when you look at the different plan types you’ll understand how they work. 

The Basics of Coverage Limits:

• Networks: A network is a group of medical providers and/or locations with which your health plan has already formed a contract. These providers usually have arranged with the health plan to charge lower fees than they charge to general customers. Original Medicare does not have networks.
• Referrals: A referral is an authorization from a primary doctor for a patient to see a specialist. Some Medicare Advantage plans require a referral for seeing specialists, while others do not. Original Medicare does not require referrals.
• Prior Authorizations: If a plan requires “prior authorization,” that means that before you get a test, service, or item, your doctor has to contact the insurance company and request approval. If your plan requires prior authorization but you opt to get the healthcare before authorization comes through, you could be stuck paying the entire bill without assistance from Medicare.
• Organization Determinations: An “organization determination” is simply a decision that a health plan makes whether or not a covered service is “medically necessary” for you  (prior authorization is a form of this). 
• Deductibles: A deductible is a set amount of money that a patient pays out-of-pocket before their healthcare coverage begins each year (benefit period). If your plan’s deductible is $1,000, then you will be responsible for 100% of the first $1,000 of doctor visits and other services you receive in a year. Original Medicare always has deductibles, but some Medicare Advantage plans do not.
• Cost-Sharing: Just as in Original Medicare, in Medicare Advantage, most healthcare costs are partially covered rather than fully covered. This practice is known as “cost-sharing.” Costs are shared when the patient pays copays (flat fees), coinsurance (fees expressed as a percentage of a cost), or deductibles to cover some care costs.

The Basics of Patient Protections:

• Out-of-Pocket Spending Maximums: To hedge against a patient spending too much of their income on healthcare in a year, Medicare Advantage plans all have an out-of-pocket spending maximum. The deductible and the copays/coinsurance that the patient pays are continuously added together, and once the maximum is reached in a year, all covered services for the rest of the year will be 100% covered by the health plan. 
• Appeals: Insurance companies sometimes make organizational determinations that are bad for a patient’s health. Coverage denials for an item or medication that the patient needs can happen for a variety of reasons, but patients have the right to make an appeal. Appeals are an important, under-utilized consumer protection, and they have a high rate of success when they are actually filed.

Plan Types

There are six major plan types that are offered in Medicare Part C. All of these plans incorporate some or all of the limits detailed above. If you have multiple plan options in your area, it's worth reading as much as possible about each type so that you’ll have no surprises when your coverage begins. Each plan in the table links to more relevant information published by a U.S. government website.

*Note: In this context, institutional care needs simply means that the senior needs to stay in a nursing home or similar setting for 90+ days. Dual Enrollment means that the patient is enrolled in both Medicare and Medicaid. Qualifying chronic conditions can be found in the link provided for SNPs.

How to Compare Medicare Advantage Plans

With so many plan choices, it can be hard to know which type to focus on. Below you can learn how to use the plan finder tool that Medicare provides, and you can also find resources for making your final plan decision with confidence.

Steps for Using the Plan Finder Tool

To check which plans are in your area, you can use the Medicare Health Plan Finder. If you wish, you can create an account, log in, and return to saved plan searches later if you’re not able to make your selection in one day. 

Step 1: Select Search Preferences
To begin your search for a plan, either create an account or click “log in as a guest.” Next, select “Medicare Advantage” from the menu provided, enter your zip code in the box that pops up, and click “continue.” Now you’ll be asked if you get help with your costs from one of several programs — select “not sure” if necessary. You’ll then be given the option to see the costs of specific drugs on different plans. This will be useful to you if you have regular prescriptions. The drug costs question is the final prompt you’ll receive before you’ll be shown a list of local Medicare Advantage plans.

Step 2: Examine Coverage Details
When you first look at the plans, you may just want to scroll through them all to see the range of costs and types in your area. Once you have a sense of what’s available, begin looking at the coverage offered in individual plans by clicking “plan details.” Here you can evaluate the copays/coinsurance of specific tests, office visits, and hospital stays, including for extra services like drug coverage, dental coverage, and more. You’ll also find contact information for the plan in this section.

Step 3: Check Star Ratings
On the upper right-hand corner of each plan listing, you can see a star rating. In plan details, you’ll find another reference to star ratings that you can click on. Several sections of the rating will show up, and each one will also be clickable so that you can look at the details. This information can be invaluable because it will give you a sense of how other consumers rate the plan in individual categories of service.

Matching Plans to Lifestyles

Which plan works best for you depends largely on your financial situation and your typical healthcare usage — the services and items that you usually need or that you are likely to need. Both of these factors influence how restrictive a network you’re likely to be able to tolerate. Another major consideration is whether you prefer plans that have low upfront costs or low costs over time. Plans with low upfront costs tend to have low premiums and deductibles. Whereas plans with low costs over time tend to have low out-of-pocket spending limits.

More Resources for Information and Advice If you want further information on evaluating plans, you can benefit from reading “Who Should Consider Medicare Advantage?” This article will help you decide if Medicare Advantage is right for you, and it can also provide information on plans that might suit you. The article “How to Compare Medicare Advantage Plans ” additionally contains more details on each plan type. If reading more still isn’t helping you make your choice, it may be the right time to get the expert advice that a State Health Insurance Assistance Program (SHIP) counselor can provide free of charge.

Frequently Asked Questions

What are the pros and cons of switching to a Medicare Advantage plan?
One “pro” of switching to a Medicare Advantage plan is the potential to save money. The most beneficial cost-saving feature of Medicare Advantage plans is the mandatory out-of-pocket spending maximums for patients. Other pros of Medicare Advantage include the inclusion of care coordination and/or extra benefits (like drug, hearing, and dental coverage) that are included in many plans.

There are potential cons to switching to Medicare Advantage as well. For example, some Medicare Advantage plans require patients to get referrals to see specialists. This is a limiting feature that Original Medicare does not have. Another con is that in Medicare Advantage you are entrusting your healthcare coverage to a private company. These companies have some leeway in deciding what they will and won’t cover. The decisions they will make are often hard to predict. It’s somewhat common for insurers to dispute a doctor’s opinion about the patient’s needs for tests, procedures, and medications.

Can Medicaid pay my Medicare Advantage and Part B premiums?
In some cases, Medicaid can pay your Medicare Advantage premiums. This is particularly true of a special kind of Medicare Advantage program called a Dual Enrollment Special Needs Plan (D-SNP) because these plans are designed specifically to serve very low-income seniors. However, you may also be able to get help with premiums in other Part C plans thanks to the  Medicare Savings Programs (MSP). Note that you cannot have a Medicare Medical Savings Plan if you benefit from Medicaid assistance. 

How much money can I save each year by switching to Medicare ailed guide to all types of Medicare, including Medicare Advantage (Part C)Advantage?
How much you save (or don’t save) by switching to a Medicare Advantage plan will depend on how much you spent previously on healthcare, how much healthcare you need, which plan you choose, and more. However, if you're using the Medicare Advantage plan finder to look for a plan, you can see in “plan details” that plan's estimated yearly healthcare costs. You can compare the costs of different plans to your yearly costs to gain a rough estimate of what you could save. Though each situation is a little different.

How do I find a replacement copy of the Medicare and You Handbook?
Medicare and You is a detailed guide to all types of Medicare, including Medicare Advantage (Part C), that Medicare mails out each September. If you have lost your copy or if you want to find it in a different format, you can get a new copy online. You can download regular and large print PDFs as well as audio files for the visually impaired and for those who just prefer to listen. Medicare also provides a downloadable ebook version that you can keep on your Kindle or other devices. Finally, the linked page provides information on ordering both print copies and braille copies.

Is Medigap and Medicare Advantage the same thing?
No, they are not the same. Medicare Advantage and Medigap are two different forms of private insurance that fill very different roles in the senior health insurance market. Medicare Advantage is a replacement for Original Medicare that provides full Parts A and B coverage plus often extra coverage. Medigap, in contrast, is designed to be used with Original Medicare. Medigap simply supplements Original Medicare. And its goal is to cover certain copays and other cost-sharing that the senior would otherwise be responsible for. Because these plans fill such different roles, you cannot have them at the same time.

About Medicare Advantage

Choosing a Medicare Advantage Plan

Enrollment

Cost & Financial Assistance

Eligibility

Coverage & Benefits

Why Choose Medicare Advantage