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How Do Medicare Advantage Plans Work?

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Maybe you have a friend or family member who has a Medicare Advantage plan, or maybe you’ve seen an infomercial for Medicare Advantage on TV. You might be curious about Medicare Advantage coverage and want to know how Medicare Advantage works.

Medicare Advantage is a way to get your Medicare insurance from a private insurance company approved by Medicare. Medicare Advantage plans must cover everything that Original Medicare covers, with the exception of hospice care, which is still covered by Medicare Part A.

Some Medicare Advantage plans also have additional benefits. Medicare Advantage plans may have different costs and some different benefits from Original Medicare, but people with Medicare Advantage plans have the same rights and protections as everyone with Original Medicare (Part A and Part B).

How do Medicare Advantage plans work for hospital insurance?

Medicare Advantage generally covers all the hospital insurance benefits that Medicare Part A covers including:

  • Inpatient hospital care
  • Skilled nursing facility care
  • Home health care in certain circumstances

Your inpatient hospital care may have a coverage limit like 270 days for example. Some Medicare Advantage plans may cover unlimited days for an inpatient hospital stay. You may pay a copayment for a certain number of days and then not have a copayment for another period of days. As you compare Medicare Advantage plans remember that coverage costs and limits may differ from plan to plan.

How do Medicare Advantage plans work for medical insurance?

Medicare Advantage plans generally cover all the services that Medicare Part B covers including:

  • Doctor visits
  • Ambulance services
  • Limited outpatient prescription drugs, including chemotherapy
  • Durable medical equipment such as walkers and wheelchairs
  • Getting a second opinion before surgery

The copayments/coinsurance you pay may differ from Medicare Advantage plan to Medicare Advantage plan. For example, one plan may charge a $10 copayment for a primary care doctor visit and a $20 copayment for a specialist visit. Another Medicare Advantage plan may charge you a $0 copayment for a primary care doctor visit and a $35 copayment for a specialist visit depending on the service, for example.

How do Medicare Advantage plans work for prescription drug coverage?

Many Medicare Advantage plans include prescription drug coverage (Medicare Part D). Some Medicare Advantage plans may charge you a prescription drug deductible and some Medicare Advantage plans may have a $0 prescription drug deductible.

You will generally have a copayment when you fill a prescription with a Medicare Advantage plan. The amount of the copayment may depend on the “tier” the prescription drug is on. For example, a tier 1 preferred generic medication may have a lower copayment than a tier 3 preferred brand medication.

How do Medicare Advantage extra benefits work?

In addition to prescription drug coverage, many Medicare Advantage plans may cover benefits not usually covered by Original Medicare including:

  • Routine dental services
  • Routine vision services including contact lenses, eyeglass lenses, and eyeglass frames
  • Routine hearing services including hearing aids and routine hearing exams

How do Medicare Advantage plans work with Medicare Supplement?

Medicare Supplement (Medigap) plans help cover some Medicare out-of-pocket costs including copayments, coinsurance, and deductibles. You can buy a Medicare Supplement plan to go alongside Original Medicare (Part A and Part B) but you cannot use a Medicare Supplement plan to cover out-of-pocket costs with Medicare Advantage.

How do Medicare Advantage plan costs work?

Premiums: The first cost you may consider for a Medicare Advantage plan is the monthly premium. Medicare Advantage plan premiums can range from $0 to over $95 a month depending on the plan characteristics and the location it is offered. You generally also continue to pay your Medicare Part B premium.

Deductibles: Your Medicare Advantage plan may also have an annual deductible for hospital and medical coverage and a separate deductible for prescription drugs. A deductible is an amount you pay out of pocket before your plan begins to pay. Some Medicare Advantage plans may have no deductible.

Copayments and Coinsurance: Medicare Advantage plans differ on how much they may charge you for services. This is called a copayment or coinsurance. These amounts can be different from Original Medicare and different from other Medicare Advantage plans.

Out-of-Pocket Maximum: Another factor to consider when comparing Medicare Advantage costs is the plan’s out of pocket maximum. An out of pocket maximum is an annual limit on your out of pocket costs. Some costs do not count towards the out of pocket maximum, including premiums, Part D costs, services not covered by the plan, and some charges from out of network providers.

To begin comparing Medicare Advantage plans in your area, enter your zip code on this page.

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