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What Is Medicare Advantage? The Ultimate 2022 Guide

By Rikin Shah | Licensed Life & Health Insurance Agent

What Is Medicare Advantage and Is It Worth It?

How would you like your healthcare coverage?  If you’re more of a buffet, instead of an a la carte person Medicare Advantage may be for you.

There are two main ways to get Medicare:

  • Original Medicare includes Medicare Part A (Hospital Insurance) and Part B (Medical Insurance).  For prescription drug coverage, you have to join a separate drug plan (Medicare Part D)
  • Medicare Advantage (sometimes called “Part C”) is an “all in one” alternative to Original Medicare.  These “bundled” plans include Parts A, B, and usually, D.  In addition, these plans typically offer benefits that Original Medicare doesn’t cover (e.g., vision, hearing, and dental, among others)

It’s an important decision that impacts the services you get, the doctors you can use, and how much you’ll pay for your healthcare.

Let’s dive into the details.

What Is Medicare Advantage?

Original Medicare refers to Medicare Part A and Part B (hospital and medical coverage, respectively).  Medicare Advantage, sometimes referred to as “Medicare Part C,” but is NOT something you get in addition to Parts A and B.

Medicare Advantage is an alternate way to get your Medicare Part A coverage (hospital insurance) and Part B coverage (doctor visits).

In addition, most Medicare Advantage plans include some combination of:

  • Extra benefits, such as vision, hearing aids, and/or dental
  • Prescription drug coverage (Medicare Part D)
  • Reduced deductibles or coinsurance

Medicare recipients have the option to receive their benefits through their Original Medicare or Medicare Advantage.

If you choose Medicare Advantage, you will receive your coverage from a private health insurance company (instead of the federal government).  (These Medicare-approved private companies must follow strict guidelines set by Medicare).

This is perhaps the biggest misconception about Medicare Advantage, so it bears repeating:

Medicare Advantage plans are offered by private insurance companies, and are required to provide at least the same services as Part A and Part B coverage, except hospice care.

Medicare Advantage Plans vs. Original Medicare

So does this mean Medicare Advantage and Original Medicare offer essentially the same health coverage?

Definitely not.  Let’s take a look at the three key differences between Original Medicare and Medicare Advantage.

Original Medicare vs. Medicare Advantage: Three Key Differences

The least attractive part of Medicare Advantage is certainly this third difference.  MA Plans can put significant restrictions on your choice of health care provider.  While you may not be forced to see an other health care provider, you will pay a significantly higher share of the costs if you do.

Medicare Advantage Plans Vs. Medigap

Medicare Supplement Insurance (“Medigap“) is a health insurance policy sold by a private health insurer that reduces the financial burden that Original Medicare leaves you with.

Medicare Supplement Insurance does not provide additional benefits.  Its purpose is to reduce your deductibles and coinsurance.

Medicare Advantage provides this same function, so you do not need both Medicare Supplement Insurance and Medicare Advantage.

The Purpose of Medical Supplement Insurance

While Original Medicare provides excellent coverage overall, for certain costly services, it may not cover a large enough share of the service’s cost.  In other words, you would have a “gap” in coverage with just Original Medicare.

For example, let’s say you need coverage for inpatient hospital stays.  The actual cost is $3,000 per day and your insurance plan covers $2,000 of this cost, leaving you with $1,000 to pay out-of-pocket.  For most people, this coverage isn’t much help.  $1,000 per day is likely not within their budget so they still cannot afford the service.

In other words, while they do have coverage, there’s a big “gap” between the financial responsibility their plan leaves them with and the amount they can afford.  They would want to get a second policy that covers an additional share of the service’s cost so that they are left with a smaller, more affordable financial responsibility.

This is why Medicare Supplement Insurance can be worthwhile to many people (and why it’s often called “Medigap” Insurance).

Enrolling In A Medicare Advantage Plan

When Medicare began on July 1, 1966, 19.0 million people enrolled. In 2020, 62.6 million people are enrolled in one or both of Parts A and B of the Medicare program, and 25.0 million of them have chosen to participate in a Medicare Advantage plan.

Medicare Advantage Eligibility

To join a Medicare Advantage Plan you must:

  • Have Part A and Part B
  • Live in the plan’s service area

The only individuals who will likely not qualify for a Medicare Advantage plan are those with permanent kidney failure (end-stage renal disease) due to its high costs.

Medicare Advantage Enrollment

You can only join, switch, or drop a Medicare Advantage Plan during the enrollment periods below.

Initial Enrollment Period

When you first become eligible for Medicare, you can sign up during your Initial Enrollment Period. For many, this is the 7-month period that begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.

Medicare Enrollment Period
Eligibility spans the month of your 65th birthday + the 3 months before and after

If you’re under 65 and have a disability, you’ll automatically get Part A and Part B after you get disability benefits from Social Security or certain disability benefits from the Railroad Retirement Board for 24 months.

General Enrollment Period

If you have Part A coverage and you get Part B for the first time during this period (between January 1—March 31 each year), you can also join a Medicare Advantage Plan. Your coverage may not start until July 1.

Open Enrollment Period

Between October 15—December 7, anyone with Medicare can join, switch, or drop a Medicare Advantage Plan. Your coverage will begin on January 1 (as long as the plan gets your request by December 7).

Types of Medicare Advantage Plans

There are several types of Medicare Advantage Plans. Each of these plan types has special rules that govern how you get your Medicare benefits (Part A and B).

See this guide from the CMS (Centers for Medicare and Medicaid Services) for more details.

Local Coordinated Care Plans (LCCPs)

This type of plan includes health maintenance organizations (HMOs) and preferred provider organizations (PPOs).

Generally, each plan has a network of participating providers.  Enrollees may be required to use these providers; if they are allowed to go out-of-network, they must pay a higher cost-share for doing so.

Regional PPO (RPPO) Plans

Each RPPO offers coverage to 1 of 26 defined regions. Like local PPOs, RPPOs have networks of participating providers, and enrollees must use these providers or pay higher cost-sharing fees.

However, RPPOs are required to provide beneficiary financial protection in the form of limits on out-of-pocket cost-sharing, and there are specific provisions to encourage RPPO plans to participate in Medicare.

Private Fee-For-Service (PFFS) Plans

These plans were not required to have networks of participating providers prior to 2011.  This is still the case for PFFS plans in areas (spanning ~12 counties) in which there are fewer than two network-based LCCPs and/or RPPOs.  In these cases, members can go to any Medicare provider that accepts the plan’s payment.

However, for PFFS plans in network areas with two or more network-based LCCPs and/or RPPOs, provider networks are now mandatory, and members may be required to use these participating providers.

Special Needs Plans (SNPs)

These plans are restricted to beneficiaries who are either:

  • Dually eligible for Medicare and Medicaid
  • Live in long-term care institutions
  • Have certain severe and disabling conditions

Is Medicare Advantage Right For You?

There are many reasons why someone might choose a Medicare Advantage plan, but there are important drawbacks to note as well. But no amount of benefits can make up for a price that is not right. So let’s go through all of these, beginning with how much you will pay for a Medicare Advantage plan.

How Much Does Medicare Advantage Cost?

In Medicare Advantage plans, the beneficiary’s payment share is based on the cost-sharing structure of the specific plan selected by the beneficiary, since each plan has its own requirements.

Most plans have lower deductibles and coinsurance than are required of fee-for-service beneficiaries. Such beneficiaries, in general, pay the monthly Part B premium. However, some Medicare Advantage plans may pay part or all of the Part B premium for their enrollees as an added benefit.

Depending on the plan, enrollees may also pay an additional plan premium for certain extra benefits provided.

Medicare Advantage Pros

Medicare Advantage Cons

Frequently Asked Questions

Medicare Advantage is an “all in one” alternative to Original Medicare. These “bundled” plans include Part A, Part B, and usually Part D. Plans may have lower out-of- pocket costs than Original Medicare. … Most plans offer extra benefits that Original Medicare doesn’t cover — like vision, hearing, dental, and more.

Consider if you want coverage for dental, vision and other extra benefits. Medicare Advantage plans cover everything Original Medicare covers plus more, so if you want things like dental, vision or fitness benefits, a Medicare Advantage plan may be the right choice. Think about what your total costs could be.

Advantage plans are heavily advertised because of how they are funded. These plans’ premiums are low or nonexistent because Medicare pays the carrier whenever someone enrolls. It benefits insurance companies to encourage enrollment in Advantage plans because of the money they receive from Medicare.

Conclusion

If you were scratching your head and asking, “What is Medicare Advantage?” we hope that this piece helped that itch!

If you have any questions or suggestions, don’t hesitate to leave a comment here.  We will be sure to get back to you within 24 hours.

Warm Regards,
The GetSure Team

  1. Medicare.gov. 

    (n.d.). 

    Medicare & You Handbook 2022. 

  2. Medicare.gov. 

    (n.d.). 

    Understanding Medicare Advantage Plans. 

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