If you're in the market for Medicare Supplement Insurance (aka Medigap), you've probably heard of Medicare Advantage (sometimes referred to as Medicare Part C). But what exactly is Medicare Advantage?
For starters, keep in mind that you can’t buy Medicare supplemental insurance to pay out-of-pocket medical expenses if you have Medicare Advantage.
Medicare Advantage serves as a substitute for "Original Medicare" Parts A and B. It is a United States health insurance program of PPOs and HMOs*, whereby private insurance companies provide the same benefits found in Medicare Parts A and B and are then compensated by the federal government for these expenses. A Medicare Advantage plan can also include the Part D prescription drug plan, in which case the federal government also makes a payment to the carrier for providing the prescription drug benefits.
If you choose to sign up for Medicare Advantage rather than Original Medicare, you must still pay the Medicare Part B premium (in addition to the premium for your Medicare Advantage plan).
With a Medicare Advantage plan, typically you'll have to use a doctor/hospital that's included in the plan's network. You'll likely have to choose a primary care physician and then seek a referral or prior authorization for any special services or to see a specialist. To contrast, if you stay with Original Medicare (in which case you'll likely also want to purchase Medigap), you can go to any doctor in the country that accepts Medicare and no prior authorizations or referrals are required.
With Medicare Advantage, your out-of-pocket expenses are capped at a specific amount set forth in the plan. Once you've hit the out-of-pocket maximum, you pay nothing for additional services for the remainder of the year. Also, some Medicare Advantage plans include routine hearing, dental and eyecare services, although they usually require an additional premium.
While Medicare Advantage certainly has some limitations, it's a solid option for those who cannot afford a Medigap plan. Often it's possible to find a Medicare Advantage plan with zero monthly premium.
If you think you might be interested in a Medicare Advantage plan or would like to compare Medicare Advantage plans with the Medigap plans available in your area, be sure to request a quote and we'll provide you with all the information you need at no cost.
*While PPOs and HMOs are the most common Medicare Advantage Plans, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans are also found.