Medicare pays a fixed amount for your care every month to the companies offering Medicare Advantage Plans. These companies must follow rules set by Medicare. However, each Medicare Advantage Plan can charge different out-of-pocket costs and have different rules for how you get services (like whether you need a referral to see a specialist or if you have to go to only doctors, facilities, or suppliers that belong to the plan for non‑emergency or non-urgent care). These rules can change each year.
Different Types of Medicare Advantage Plans
- Health Maintenance Organization (HMO) Plans
- Preferred Provider Organization (PPO) Plans
- Private Fee-for-Service (PFFS) Plans
- Special Needs Plans (SNP)
There are other less common types of Medicare Advantage Plans that may be available:
HMO Point of Service (HMOPOS) Plans— An HMO plan that may allow you to get some services out-of-network for a higher cost.
Medical Savings Account (MSA) Plans – A plan that combines a high deductible health plan with a bank account. Medicare deposits money into the account (usually less than the deductible). You can use the money to pay for your health care services during the year.
How Much Does a Medicare Advantage Plan Cost?
In addition to your Part B premium, you usually pay one monthly premium for the services included. Each Medicare Advantage Plan can charge different out of-pocket costs. Your out-of-pocket costs in a Medicare Advantage Plan depend on:
- Whether the plan charges a monthly premium.
- Whether the plan pays any of your monthly Part B premium.
- Whether the plan has a yearly deductible or any additional deductibles.
- How much you pay for each visit or service (copayments or coinsurance).
- The type of health care services you need and how often you get them.
- Whether you follow the plan’s rules, like using network providers.
- Whether you need extra benefits and if the plan charges for them.
- The plan’s yearly limit on your out-of-pocket costs for all medical services.
What Does a Medicare Advantage Plan Cover?
In all types of Medicare Advantage Plans, you’re always covered for emergency and urgent care. Medicare Advantage Plans must cover all of the services that Original Medicare covers except hospice care. Original Medicare covers hospice care even if you’re in a Medicare Advantage Plan. Medicare Advantage Plans aren’t supplemental coverage. Medicare Advantage Plans may offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs. Most include Medicare prescription drug coverage (Part D).
How to Join a Medicare Advantage Plan
Not all Medicare Advantage Plans work the same way, so before you join, take the time to find and compare Medicare Health Plans in your area. Once you understand the plan’s rules and costs, you may be able to join by completing a paper application, calling the plan, or enrolling on the plan’s Web site. Medicare also has information on quality to help you compare plans.
A Few Extra Things You Should Know about Medicare Advantage Plans
- You can only join a plan at certain times during the year. In most cases, you’re enrolled in a plan for a year.
- As with Original Medicare, you still have Medicare rights and protections, including the right to appeal.
- Check with the plan before you get a service to find out whether they will cover the service and what your costs may be.
- You must follow plan rules, like getting a referral to see a specialist or getting prior approval for certain procedures to avoid higher costs. Check with the plan.
- You can join a Medicare Advantage Plan even if you have a preexisting condition, except for End-Stage Renal Disease.
- If you go to a doctor, facility, or supplier that doesn’t belong to the plan, your services may not be covered, or your costs could be higher, depending on the type of Medicare Advantage Plan.
- If the plan decides to stop participating in Medicare, you‘ll have to join another Medicare health plan or return to Original Medicare.