Medicare Advantage Plans

Read to learn about the 5 different Advantage plan types

Agnus Smith
Published on
January 22, 2024
Updated on
January 22, 2024

If you are getting ready to sign up for Medicare, which may be one of the most important things you do as you enter your senior years, it’s worth exploring Medicare Advantage. There are a few different options when it comes to Medicare Advantage, so make sure to read about the 5 different Advantage plan types before starting your search.

What Are Medicare Advantage Plans?

A Medicare Advantage (MA) plan is an alternative to your regular Medicare benefit, which is called Original Medicare. Instead of being run by the government directly, a Medicare Advantage plan is operated by a local insurance company. The government pays this insurance company on your behalf to cover the cost of your care.

You get the option of selecting the plan and the benefits you want based on what is offered in your local insurance market. Insurance companies are not required to offer MA plans, but when they do, the law mandates that they must ensure that the plans cover all Part A and Part B services.

How These Plans Work

Medicare Advantage allows you to choose a plan that has different benefits and features from Original Medicare. For example, most Medicare Advantage plans include coverage for prescription drugs. They can have very different premiums, copays, coverage levels, provider networks, and deductibles. They act more like a regular health insurance plan, although Medicare Advantage plans are required to cover the same set of services that Medicare Part A and Part B contain and a traditional insurance plan is not.

Is Medicare Advantage Private Insurance?

Medicare Advantage plans are offered by private insurance companies, and the federal government pays these companies to provide you with coverage. The goal of MA is to allow you to look at the private market and see if one of those Medicare Advantage plans fits your needs and budget better than Original Medicare does.

You can have a wide selection of options that can help you save money, stick with a certain doctor, get access to coverage for services you need, or help you reduce costs on your prescriptions. It is like buying a private insurance plan that is sponsored by the government.

List Of Medicare Advantage Plans

There are many different kinds of Medicare Advantage plan. Each one has special characteristics that we will review further down. They include the following categories:

Many of these plans exist outside the realm of Medicare as well, although with Medicare Advantage they work differently as a result of their regulations.

Comparing Medicare Advantage Plans

Just like other kinds of insurance that you may have had during your working life, Medicare Advantage plans can have many different characteristics. They are required to cover the same things as Original Medicare Part A and B, but the coverage level and the provider network for those services can vary.

In addition, the copay that you have to pay for a service and your monthly premium can all be different. Some have higher premiums, but better networks and coverage. Others have low premiums, but high copays. The Medicare Advantage plans available to you depend on where you live.

Medicare Advantage PPO

A PPO, or Preferred Provider Organization, is a basic type of insurance with a network of providers. Anytime you get a service within the network, you get a discount. You are free to use a doctor outside the network, but it will likely cost more.

The cost difference depends on the Medicare Advantage plan, your state of residence, and the service. Two different MA PPOs might offer different networks as well as different sets of coverage.

Medicare Advantage HMO

HMO stands for Health Maintenance Organization. In an HMO plan, you cannot go to providers who are outside the network at all unless it is an emergency or urgent need. Often, if you want to go to a specialist under an HMO, you will need a referral from your primary care physician.

On the other hand, the discount for staying in the network tends to be better than with a PPO. This plan is a good fit if you are comfortable with the providers in the network because it tends to deliver good savings.

Medicare Advantage HMO Point-Of-Service

MA considers an HMO Point-of-Service plan to be a balance between the PPO and the HMO styles. You can go to service providers outside the network, but it will cost more and the difference will be bigger than under a PPO. This kind of plan is good if you mostly like doctors in the network, but one or two outside the network is also beneficial for you.

Medical Savings Account

A Medical Savings Account is a combination of a plan with a high deductible and a special bank account. The Medical Savings Account then deposits money into the account for you to use towards your care in each year. Usually, the plans have deductibles that are higher than the amount of money they provide. That makes this plan good for someone who typically does not hit their deductible each year.

Note that these Medicare Advantage plans usually do not include coverage for prescription drugs, so you would need to get that separately if you need it. That is another kind of plan and is generally not a part of Medicare Advantage.

Medicare Special Needs Plan

A Medicare Special Needs Plan is a Medicare Advantage plan that is customized to fit the profile of someone in special circumstances. Usually, these are high-need categories, like people who live in a nursing home, people who qualify for both Medicare and Medicaid, and those who have certain long-term diagnoses. The Medicare Special Needs plan is specialized and not suited for the average consumer.

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