Medicare Advantage plans are Medicare plans offered by private insurance companies that have a contract with Medicare. The plans are also called Part C or MA Plans. These plans include Medicare Part A and Medicare Part B. Most plans also include Medicare Part D. In 2020, 90% of plans include Part D. Some people may not need Part D because they have other drug coverage. They may have prescription drug benefits through the VA or employer plan.
Note: Medicare Advantage Plans do not work with Medicare Supplement Plans. In other words, Medicare Supplement Plans only work with Original Medicare.
Medicare Advantage Plans cover all services covered by Original Medicare. Some Medicare Advantage Plans also offer extra benefits, like vision, hearing, fitness and dental coverage.
Out of Pocket Maximum
Medicare Advantage Plans have a yearly limit on what you pay out-of-pocket for Medicare Part A and B covered services. Once you reach your plan’s limit, you’ll pay nothing for Part A and Part B covered services for the rest of the year.
Types of Medicare Advantage Plans
- Health Maintenance Organization (HMO) Plans – Must use in-network providers. Some plans require referrals to see specialists.
- Point of Service – HMO plans that allow you to see out of network providers for some services. Generally, you pay more when you go outside the network.
- Preferred Provider Organization (PPO) Plans – Can see non-participating providers but you generally pay more.
- Private Fee for Service (PFFS) Plans – Can see any Medicare contracted provider . However, the provider must first accept the terms and conditions of the plan. Providers must bill the plan for the services they provide for you. However, the provider can decide at every visit whether to accept the plan and agree to treat you.
- Special Need Plans (SNPs) – Plans designed for people who have a specific special need. There are three different types of SNPs:
- Dual Eligibles – People who have both Medicare and Medicaid
- Chronic Condition – Plans for people who have a chronic and disabling condition. Conditions include chronic heart failure, cardiovascular disorders and also diabetes mellitus.
- Institutional – Plans for people who live in a nursing home.
Special Need Plans are HMO or PPO plans. All Special Need Plans include Part D.
Special Needs Plans are available to anyone who meets the specific eligibility requirements of the plan. They must also live in the plan’s service area, and have both Medicare Part A and Part B. Plan availability varies by state and also the service area.
Medicare Advantage Eligibility
To join a Medicare Advantage Plan you must have Part A and Part B. You also have to live in the plan’s service area. You’re a U.S. citizen, U.S. national, or lawfully present in the U.S.
Drug Coverage in Medicare Advantage Plans
If you have an HMO or PPO Medicare Advantage Plan and enroll in a Part D plan, you will be cancelled from the Medicare Advantage Plan and returned to Original Medicare.
You are able to purchase a Part D plan if you have a PFFS Medicare Advantage Plan without drug benefits. You are also able to add Part D to a Medicare Medical Savings account.
Costs for Medicare Advantage Plans
- Nearly two-thirds of Medicare Advantage enrollees pay no premium in 2020.
- You must continue to pay the Part B premium. Some plans pay all or part of your Part B premium. The standard Part B premium in 2020 is $144.60.
- Some plans have an annual deductible.
- Co-payments and co-insurance vary from plan to plan. These amounts can be different than those under Original Medicare.
Switching Medicare Advantage Plans
You can switch MA Plans during the Annual Enrollment Period(Oct. 15 – Dec.7). You can also switch plans during the Open Enrollment Period(Jan 1 – Mar. 31). People who qualify for a Special Election Period(SEP) may also be able to change their plan.
Why do People switch Medicare Advantage Plans?
Reasons for switching plans:
- Increase in monthly premiums. In other words, people change plans to save money.
- Changes in provider network. For example, a doctor or hospital is no longer participating.
- Copayment and co-insurance amounts increase.
- Health needs may change from one year to the next. For example some people may need a more comprehensive plan to meet their health needs.
Plan benefits can change from year to year. Make sure you understand how a plan works before you join.
Medicare Advantage Enrollment
In 2019, the majority of Medicare recipients (64 million) were covered under Original Medicare. About 1/3 (34%) were covered by Medicare Advantage Plans. It is projected that Medicare Advantage enrollment will to continue to grow over the next decade. For example, 47% of Medicare beneficiaries are expected to have a Medicare Advantage Plan by 2029
Medicare Advantage Enrollment by Firm
- UnitedHealthcare leads all insurance companies with 26%.
- Humana is second with 18%.
- BlueCross BlueShield – 15% chose BCBS Part C Plans.
- All other insurers – 18%
Total Medicare Advantage enrollment in 2020 is 24.1 million.
The share of people in MA Plans varies across the country. More than 40 percent of Medicare beneficiaries are enrolled in Medicare Advantage plans in nine states (HI, FL, MN, OR, WI, MI, AL, PA, CT) and Puerto Rico.
Where can I get more information?
- Visit Medicare.gov for more information on plan types and to find plans that are available in your area.
- Call 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048.