Medicare Advantage Plans
Medicare Advantage is an alternative to Original Medicare. Also known as Part C, these plans are provided by private insurance companies that contract with the government. Plans must provide the same base level of care as Medicare Part A and Part B but may also bundle other benefits into a single plan.
- Written by Rachel Christian
Rachel Christian
Financial Writer and Certified Educator in Personal Finance
Rachel Christian is a writer and researcher for RetireGuide. She covers annuities, Medicare, life insurance and other important retirement topics. Rachel is a member of the Association for Financial Counseling & Planning Education.
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Matt Mauney
Financial Editor
Matt Mauney is an award-winning journalist, editor, writer and content strategist with more than 15 years of professional experience working for nationally recognized newspapers and digital brands. He has contributed content for ChicagoTribune.com, LATimes.com, The Hill and the American Cancer Society, and he was part of the Orlando Sentinel digital staff that was named a Pulitzer Prize finalist in 2017.
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- Published: April 28, 2020
- Updated: October 20, 2023
- 6 min read time
- This page features 15 Cited Research Articles
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How Medicare Advantage Plans Work
Medicare Advantage, or Part C, is an “all-in-one” alternative to Original Medicare (Part A and Part B). These plans are offered by government-approved private insurance companies Medicare later reimburses.
Instead of juggling coverage from multiple plans, Medicare Advantage offers all benefits within a single plan.
Medicare Advantage plans may also include Part D drug coverage, vision, dental and hearing benefits.
By law, Medicare Advantage plans must provide the same level of coverage as Original Medicare.
No matter what Medicare Advantage plan you select, you’re guaranteed emergency and urgently needed care.
- Health Maintenance Organization Plans
- Enrollees must use doctors, pharmacies, hospitals and other medical facilities within the plan’s network. This rule does not apply to emergency or urgent care services. Most HMOs also require a referral from your primary care doctor to see a specialist. Prescription drugs are covered in most cases.
- Preferred Provider Organization Plans
- Enrollees pay less for doctors, pharmacies, hospitals and other medical facilities within the plan’s preferred network. Services outside the network usually cost more. You don’t need a referral to see a specialist. Prescription drugs are covered in most cases.
- Private Fee-for-Service Plans
- There may or may not be a provider network. Doctors and medical providers outside of the network can choose to accept or deny PFFS plan coverage on a service-by-service, patient-by- patient basis. You don’t need a referral to see a specialist. Prescription drugs may or may not be covered.
- Special Needs Plans
- Enrollees with specific diseases, certain health care needs or limited incomes receive special, tailored coverage. To qualify, you must meet certain criteria. You will likely be required to have a primary care doctor within the plan’s network. All plans must provide prescription drug coverage.
Who Is Eligible for Medicare Part C?
Anyone who is already enrolled in Original Medicare is eligible for Medicare Part C.
To qualify, you must live in the plan’s service area and be a U.S. citizen, U.S. national or lawfully present in the U.S. In 2022, the average Medicare beneficiary has access to 39 Medicare Advantage plans, according to the Kaiser Family Foundation.
When Can You Enroll?
You can only join, switch, or drop a Medicare Advantage plan during specific enrollment periods.
- Initial Enrollment
- You can enroll in a Medicare Advantage plan when you first become eligible for Medicare around your 65th birthday. Initial enrollment is a seven-month window that begins three months before your birthday and extends three months after your birth month.
- Medicare Open Enrollment
- Each year, from Oct. 15 to Dec. 7, anyone enrolled in any Original Medicare plan can join, switch or drop coverage. If you have a Medicare Advantage plan, you can make changes or buy a new policy. New coverage will begin Jan. 1.
- Medicare Advantage Open Enrollment
- Different from Medicare Open Enrollment, this period applies specifically to people who already have a Medicare Advantage plan. Medicare Advantage Open Enrollment runs from Jan. 1 through March 31. During this period, you can switch to a different Medicare Advantage plan or switch back to Original Medicare and add a Medicare Part D drug plan.
- General Enrollment
- If you miss the initial enrollment period for Medicare, you can sign up for Original Medicare from Jan. 1 to March 31 each year. Your new coverage will take effect July 1. After signing up for Medicare Parts A and B during this time, you may then enroll in a Medicare Advantage plan from April 1 through June 30. Your Medicare Advantage plan coverage will then start on July 1.
What Is Covered Under Medicare Advantage Plans?
Medicare Advantage benefits vary widely from plan to plan.
- At least the same level of care as Medicare Part A and B
- Emergency care
- Urgent care
- Hospice services
More Medicare Advantage plans now offer additional services, with over 90% of plans offering vision, dental, hearing and fitness, according to a November 2022 Kaiser Family Foundation report.
In 2022, most Medicare Advantage enrollees have access to additional nonmedical supplemental benefits. Some options include coverage for a meal benefit, acupuncture and transportation.
- Dental
- Vision
- Transportation to doctor visits
- Hearing aids
- Home modifications
- Prescription drugs
- Over-the-counter drugs
- Adult day care services
- Wellness programs
Costs of Medicare Part C
Most Medicare Advantage plans include a monthly fee, or premium. Some premium-free plans also exist.
The average 2023 Medicare Advantage premium is about $18 a month, according to the U.S. Centers for Medicare and Medicaid Services.
You must still pay your monthly Part B premium each month in addition to any Medicare Advantage costs.
The Part B premium is $174.70 for 2024.
Higher income households pay more for the Part B premium. Low-income households may qualify for discounts.
Pros and Cons of Medicare Advantage Plans
Medicare Advantage plans give people an alternative to Original Medicare — but Part C comes with some drawbacks.
- All-in-one inclusive benefit plan
- May offer no-cost premiums or deductibles
- May offer dental, vision and hearing benefits
- Annual limit on out-of-pocket costs
- Coverage is limited to in-network providers
- Plans may cost more than Original Medicare
- Coverage limited to specific geographical area
- Can’t be combined with a Medicare supplemental insurance plan
Frequently Asked Questions About Medicare Advantage Plans
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15 Cited Research Articles
- Centers for U.S. Medicare & Medicaid Services. (2023, October 12). 2024 Medicare Parts A & B Premiums and Deductibles. Retrieved from https://www.cms.gov/newsroom/fact-sheets/2024-medicare-parts-b-premiums-and-deductibles
- U.S. Centers for Medicare & Medicaid Services. (2022, September 29). Biden-Harris Administration Announces Lower Premiums for Medicare Advantage and Prescription Drug Plans in 2023. Retrieved from https://www.cms.gov/newsroom/press-releases/biden-harris-administration-announces-lower-premiums-medicare-advantage-and-prescription-drug-plans
- U.S. Centers for Medicare & Medicaid Services. (2022, September 27). 2023 Medicare Parts A and B Premiums and Deductibles 2023 Medicare Part D Income-Related Monthly Adjustment Amounts. Retrieved from https://www.cms.gov/newsroom/fact-sheets/2023-medicare-parts-b-premiums-and-deductibles-2023-medicare-part-d-income-related-monthly
- Freed, M. (2022, August 25). Medicare Advantage in 2022: Premiums, Out-of-Pocket Limits, Cost Sharing, Supplemental Benefits, Prior Authorization, and Star Ratings. Retrieved from https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2022-premiums-out-of-pocket-limits-cost-sharing-supplemental-benefits-prior-authorization-and-star-ratings/
- Freed, M. (2022, August 25). Medicare Advantage in 2022: Enrollment Update and Key Trends. Retrieved from https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2022-enrollment-update-and-key-trends/
- Kaiser Family Foundation. (2021, November 2). Medicare Advantage 2022 Spotlight: First Look. Retrieved from https://www.kff.org/medicare/issue-brief/medicare-advantage-2022-spotlight-first-look/
- U.S. Centers for Medicare & Medicaid Services. (2021, September 30). CMS Releases 2022 Premiums and Cost-Sharing Information for Medicare Advantage and Prescription Drug Plans. Retrieved from https://www.cms.gov/newsroom/press-releases/cms-releases-2022-premiums-and-cost-sharing-information-medicare-advantage-and-prescription-drug
- U.S. Centers for Medicare & Medicaid Services. (2020, November 6). 2021 Medicare Parts A and B Premiums and Deductibles. Retrieved from https://www.cms.gov/newsroom/fact-sheets/2021-medicare-parts-b-premiums-and-deductibles
- U.S. Centers for Medicare & Medicaid Services. (2020, September 24). Trump Administration Announces Historically Low Medicare Advantage Premiums and New Payment Model to Make Insulin Affordable Again for Seniors. Retrieved from https://www.cms.gov/newsroom/press-releases/trump-administration-announces-historically-low-medicare-advantage-premiums-and-new-payment-model
- O’Brien, S. (2019, December 30). Here’s what you need to know about your 2020 Medicare costs. Retrieved from https://www.cnbc.com/2019/12/30/heres-what-you-need-to-know-about-your-2020-medicare-costs.html
- Gleckman, H. (2019, October 7). Medicare Advantage Plans Are Expanding Personal Supports and Services For 2020. Retrieved from https://www.forbes.com/sites/howardgleckman/2019/10/07/medicare-advantage-plans-are-expanding-personal-supports-and-services-for-2020/#82aff9a5f1b1
- Centers for Medicare and Medicaid Services. (2019, September 24). Trump Administration Drives Down Medicare Advantage and Part D Premiums for Seniors. Retrieved from https://www.cms.gov/newsroom/press-releases/trump-administration-drives-down-medicare-advantage-and-part-d-premiums-seniors
- Centers for Medicare and Medicaid Services. (n.d.). Medicare Advantage Plans must cover all Medicare services. Retrieved from https://www.medicare.gov/what-medicare-covers/what-medicare-health-plans-cover/medicare-advantage-plans-cover-all-medicare-services
- Centers for Medicare and Medicaid Services. (n.d.). Understanding Medicare Advantage Plans. Retrieved from https://www.medicare.gov/Pubs/pdf/12026-Understanding-Medicare-Advantage-Plans.pdf
- Centers for Medicare and Medicaid Services. (n.d.). Doctors, providers and hospitals in Medicare Advantage Plans. Retrieved from https://www.medicare.gov/sign-up-change-plans/types-of-medicare-health-plans/doctors-providers-hospitals-in-medicare-advantage-plans
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