What is Medicare Advantage?
With the passage of the Balanced Budget Act of 1997, Medicare beneficiaries were given the option to receive their Medicare benefits through private health insurance plans, instead of through the original Medicare plan (Parts A and B). These programs were known as "Medicare+Choice" or "Part C" plans. Pursuant to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, "Medicare+Choice" plans were made more attractive to Medicare beneficiaries by the addition of prescription drug coverage and became known as "Medicare Advantage" (MA) plans.
Traditional or "fee-for-service" Medicare has a standard benefit package that covers medically necessary care members can receive from nearly any hospital or doctor in the country. For people who choose to enroll in a Medicare Advantage health plan, Medicare pays the private health plan a set amount, every month for each member. Members typically also pay a monthly premium in addition to the Medicare Part B premium to cover items not covered by traditional Medicare (Parts A & B), such as prescription drugs, dental and vision care and gym or health club memberships.1 In exchange for these extra benefits, enrollees may be limited in the providers they can receive services from without paying extra.
Typically, MA plans have a "network" of providers that patients can use.
Going outside that network may require permission or extra fees.
IMPORTANT NOTE: Medicare Advantage plans are required to offer coverage that meets or exceeds the standards set by the original Medicare program, but they do not have to cover every benefit in the same way. If a plan chooses to pay less than Medicare for some benefits, like skilled nursing facility care, the savings may be passed along to consumers by offering lower co-payments for doctor visits. Some plans limit their members' annual out-of-pocket spending on medical care, providing insurance against catastrophic costs over $5,000, for example.
Many plans offer dental coverage, vision coverage and other services not covered by Medicare Parts A or B, which makes them a good value for the health care dollar, if you want to use the provider included in the plan's network or "panel" of providers.
1 "Problems Encountered by Medicare Beneficiaries in Managed Care Plans," Booske B, Frees, etc., Academy Health Meet. 2005, 22; abstract no 3625
What types of Medicare Advantage Plans are available?
Other less familiar plans availble:
How much will I pay?
Part C plans may or may not charge premiums, at the programs' discretion. Part C plans may also choose to rebate a portion of the Part B premium to the member. As you can see, not all Part C Plans work the same way, so before you join find out the plan's rules, what your costs will be, and whether the plan will meet your needs.
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