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What is Medicare Advantage?

A Medicare Advantage plan are provided by private health insurance companies that are approved by the Centers for Medicare & Medicaid Services (CMS). Medicare Advantage Plans include your Part A & Part B coverages and most will also include your Medicare Part D benefits.  

Medicare Advantage plans are provided from private insurance companies.  Most Medicare Advantage plans are usually HMO style plans, with very few PPO network options.

It is important to mention that by joining a Medicare Advantage Plan you are opting out of Original Medicare and turning over your medical decision to a private medical group plan and Insurance Company.

Medicare Advantage Plans

Medicare Advantage Explained

Many Medicare Beneficiaries find Medicare Advantage plans as a great alternative to Original Medicare.  This seperate plans were created as an alternative to Original Medicare and Medigap plans as a way for our Government to cap their healthcare cost. 

When Medicare Beneficiaries joins a Medicare Advantage plan, Original Medicare pay the Advantage plan company a set monthly amount to manage your care. The amount each Medicare Advantage plan receives, is based on their overall star rating.  The higher their rating the higher their monthly compensation. 

With these funds, the Medicare Advantage company will manage your medical care.  They are required to provide the minimum required coverage included as part of your Part A & Part B services, but they are allowed to offer additional coverages.

When you sign up for a Medicare Advantage plan, the private insurance company assumes all of the medical cost. 

Depending on where you live and which plan you select, many Medicare Advantage plan may include coverage at no additional monthly premium.  In order to join a Medicare Advantage plan, you are required to enroll into both Medicare Parts A and Medicare Part B.  It is important that you continue to pay your Part B premiums each month or you will be disenrolled from your Medicare Advantage plan. 

You need to select a Medicare Advantage plan this is within your plan’s service area before you can enroll.

Medicare Advantage policies are NOT the same as a Medigap plans. In fact you are not able to be enrolled into a Medigap plan and an Advantage plan at the same time.  

It is important to fully understand the differences between a Medigap plan and a Medicare Advantage plan prior to initially signing up.  

Medicare Advantage Coverage

Many of our clients have lots of questions related to Medicare when they are about to first enroll into Medicare.  After we go over a few basics of Original Medicare, Medigap Plans, Part D, and Medicare Advantage plans they will ask us for the pros and cons of Medicare Advantage plans vs Original Medicare with a Medigap plan. The answer is not always a simple one but one of the major differences is in the way you access your benefits.

With Original Medicare (with no Medigap Plan), you will have a Part A & Part B deductible (Part A $1,484 & Part B $203 for plan year 2021) and a 20% coinsurance on Part B, and the possibility of excess charges equal to 15% of the total bill. You have the freedom to visit any doctor or hospital (without a need for a referral or prior authorization so long as it is deemed medically necessary by the treating Doctor and is a covered expense by Medicare) that participates in Medicare, and most do.

A Medigap policy fills in the gaps left behind in Original Medicare.  We recommend you visit our site related to Medigap plans to learn more about these types of plans.  

Most Medicare Advantage plan are considered HMO’s.  You will be required to use the plan’s network of providers and approved medical facilities. 

When you select your medical group this will have an impact on which Doctors, Specialist, Medical Facilities, and Hospitals that are covered under your plan. 

These plans are designed as a pay as you go type of plan.  You will typically pay deductibles, co-payments, coinsurance, and have an established max out of pocket when you receive healthcare services.

Each Medicare Advantage Company may have 10 different plans.  Each of these plans will have different coverages and cost they pass on to the Medicare Beneficiary.  For example, you might pay a small copay for a primary care and specialist doctor visit, and a larger copay for outpatient surgery. Many Medicare Advantage plans will charge you a 20% coinsurance for cancer treatment up to your max out of pocket cost. 

The below image shows another comparison between and Advantage Plan and Original Medicare with a Medigap plan.

For more on what Medicare Advantage policies cover, see our Part C page.

Medicare Advantage vs Original Medicare

Why were Medicare Advantage plans Created

Medicare Advantage plans were created for several reasons.  One of those reasons was due to the fact that some Medicare beneficiaries were not able to afford their Medigap plan.  They were left with only having Original Medicare which left these individuals with high medical bills if and when they ended up in the hospital due to the gaps in coverage.  

For those who could afford the Medigap policy they had fantastic coverage to take care of their hospital bills. 

Medicare Beneficiaries that have rolled the dice by not obtaining a Medigap plan, once they experienced a health issue, it was only then that they would try to apply for a Medigap plan.  However, now that they had a major health concern, they were not able to qualify for the Medigap plan as they fell outside of the guaranteed issue period. 

Medicare Advantage plans provided a solution for these individuals who were unable to afford the monthly insurance premiums above and beyond the Part B monthly premium.

Medicare Part C often provide lower upfront cost in the form of no additional premium or low monthly premium as compared to a Medigap policy.  In additional Medicare Advantage plan don’t have pre-existing condition clauses attached to them.  You are able to join these plans either during your Initial Enrollment Period or at other specific times of the year known as an enrollment periods. 

Medicare Advantage plans are required to include an out-of-pocket maximum cap which is regulated by Medicare. Medicare Insurance Carriers are not able to increase this max out of pocket cap beyond the approved amount $7,550 for 2021 plan year.  While this is a very large number, we can be thankful that under these plans at least the financial pain will end at this point.  

Even though your Part D coverage is included under your Medicare Advantage plan, Part D expenses are calculated separately from your medical bills which are part of your Part A and Part B benefits.

Part D coverage this is another popular feature of Advantage plans as they are bundle together for you as part of the Medicare Advantage plan.  Bundling everything together, can provide good overall coverage that includes some value added benefits.

Joining a Medicare Advantage plan

When it comes to Medicare you have a lot of different options to decide on.  There is no perfect one size fits all plan that meets everyone’s needs.  What is right for you may not be right for your friend or family member.  To put this in perspective in Los Angeles County there are 63 different Medicare Advantage plans, 32 Part D prescription Drug plans, and 33 Medigap plan options for plan year 2021. 

If you are trying to decide which type of coverage is appropriate for you, many time it comes down to cost and need.  If you are not able to find a Medicare Advantage plan that covers your “Must Have Doctors” then Original Medicare with the Medigap policy may be your only option.  Or if you look at your personal finances and you can’t afford the monthly premiums on the Medigap policy then you will need to pick a Medicare Advantage plan that provides the greatest benefit for you.  

Working with an independent Medicare Insurance Agency that specializes in all of these plans is a great way to ensure that you consider all the variables before choosing your insurance company. Our team is very familiar with how all of these Medicare plans work and we can research based on your medical and Doctor needs.

Want Medicare Advantage explained in a one-on-one setting? Get help from our Medicare insurance experts today at (562) 735-3553 x1