Medicare Advantage

What Are Medicare Advantage Plans and Should You Keep Yours?

For more information on Medicare, please call the number below to speak with a healthcare specialist


Medicare Advantage plans, also called Medicare Part C, are insurance plans offered by private companies approved by Medicare. These plans cover the same services and treatments as original Medicare along with different extras depending on plan type. This isn’t the same as a Medicare Supplement Insurance Policy, known as Medigap, which covers things like copayments, coinsurance and deductibles.

Medicare Advantage is popular among Medicare enrollees, as is the entire Medicare program. Since Trump took office, there’s been some concern about how the new administration will handle Medicare going forward. Congress has already begun taking steps to repeal the Affordable Care Act (ACA), and it’s not yet clear how the repeal process will impact the senior entitlement program.

Although Congress and President Donald Trump have repeatedly stated that their new healthcare plan won’t affect Medicare, Republican proposals do include phasing out overpayments to private insurance companies offering Medicare Advantage plans. This has led many Americans to wonder if they should cancel their Medicare Advantage plan or leave it intact. During certain times in the year, you can cancel MA coverage if you have it, but before you do, know the pros and cons of signing up for Advantage over traditional Medicare.

Types of Medicare Advantage Plans

Before deciding whether to keep your MA plan or drop it for original Medicare, it’s important to know what type of plan you have. There are four different types of Medicare Advantage coverage:

  • Health Maintenance Organization (HMO): HMOs require strict networks, and you can’t go outside the network if you want your insurer to pay for your care. The only exception is for emergencies.
  • Preferred Provider Organization (PPO): PPOs also have networks, but insurers will also typically cover out-of-network services at a higher cost. You’ll save money by using the plan’s network of providers.
  • Private Fee-For-Service (PFFS): With a PFFS, you can go to any healthcare provider as long as they accept the plan’s payment terms.
  • Special Needs Plans (SNP): This is a specialized healthcare plan for special groups of people, such as those with chronic health conditions.

Disadvantages of MA Plans

One possible downside to a Medicare Advantage policy is that each plan’s benefits depend on the insurance company that issues the policy. Some plans have higher out-of-pocket costs than original Medicare. In addition, plan premiums, benefits and copayments can change each year as well. This variation in policies is one of the aspects of Medicare that Congress is hoping to get better control over. Medicare Advantage policies cover about a third of Medicare participants. Some members of Congress feel that premiums and co-pays for the program are too high. Last year, federal health officials proposed an almost 2 percent rate reduction, but that never came to fruition due to heavy lobbying by the medical industry. This year, health officials have proposed a 1 percent rate cut in an effort to keep the program included in the new Republican healthcare reform when it’s released.

Strict Coverage Rules

Another disadvantage to Medicare Advantage plans is that many of the option have strict rules regarding what doctors you can see, what hospitals you can use and where you can go for testing. Some require referrals before you can see a doctor, which some patients say has led to delays in treatment. It’s possible that you would have to change your doctor or hospital if the ones you currently use no longer participate in the program, or pay a much higher cost for treatment if you stick with an out-of-network provider.

Plan Cancellations

Because Medicare Advantage plans enter annual contracts with Medicare, it’s also possible that the plan you currently have won’t be available when it’s time to renew for the following year. This could require you to choose a plan with less coverage or higher co-payments than your previous plan. The law requires any plan that doesn’t intend to renew its contract with Medicare to notify subscribers in writing at least 90 calendar days before the date the non-renewal is effective. They must also provide information about alternative plans in the area.

Upsides to Medicare Advantage

There are definite advantages to choosing MA plans over traditional Medicare. In some parts of the country, Medicare Advantage plans don’t charge a monthly premium. Medicare Part C zero premium plans offer the same coverage as original Medicare, but like all Medicare Advantage plans, coverage can vary depending on insurance company. The benefit to these plans over original Medicare is that some offer vision, dental, hearing or prescription drug coverage that isn’t included in traditional Medicare. Zero premium plans may require you to pay higher prescription or copayments, or much higher deductibles.

Additional Coverages

Medicare Advantage Plans, even those that aren’t Zero Premium Plans, may offer additional benefits, including vision, dental and prescription coverage. In fact, all SNPs must provide prescription drug coverage. Under HMO, PPO or PFFS plans, prescription coverage is optional, but many do offer the coverage. It may require you to pay a higher premium, however.

Maximum Out-of-Pocket Limit

One of the biggest benefits to Medicare Advantage plans is that there are out-of-pocket limits on how much you must spend on healthcare. Once you reach that limit, you will have no more out-of-pocket costs for the remainder of your policy year. Each plan has a different limit, so it’s important to review what your plan covers. Keep in mind that limits can change each year as well.

Choosing a Medicare Advantage Plan

When choosing an MA plan, keep the needs of you and your family in mind. Read the details and fine print carefully. Do a side-by-side comparison of the plans, checking benefits, costs and restrictions before you make a decision. Consider your prescription drugs as well, especially if you’re taking a higher-priced prescription or have several different prescriptions to take each month. In those situations, a plan that includes prescription drug coverage would be beneficial.

Medicare Advantage Enrollment Requirements

In order to enroll in a Medicare Advantage plan, you must be enrolled in both Medicare Part A and Part B. There are restrictions regarding who may enroll. For example, if you are in end-stage renal failure, you may not enroll in Medicare Advantage. The Medicare website offers an overview of eligibility, but you can read more about enrollment in our breakdown of Medicare Advantage.

Enrollment Periods

If you currently have a Medicare Advantage plan and are considering switching to original Medicare, you can only do so between January 31 and February 14 of each year. There are circumstances, however, where you can change your plan even after that date. If you move to a new address, lose your current coverage, qualify for other coverage or have extenuating circumstances that will require you to change plans, you need to reach out to Medicare to see if you qualify for a change.

Dropping Medicare Advantage

If you do choose to drop Medicare Advantage, you may need to purchase a Medigap Supplemental Plan that will cover costs that Medicare doesn’t pay. You may find it difficult to find a Medigap plan after your initial eligibility, though, as insurers aren’t required to offer Medigap coverage like they are for other policies. If you can’t afford the copayments under regular Medicare and a Medigap policy, you may be better off keeping your Medicare Advantage coverage.

With the current uncertainty surrounding the ACA and what will happen if the legislation is repealed, many people are concerned about the effect it will have on Medicare and Medicare Advantage. Because few details have been released regarding replacement bills, questions remain about the healthcare industry as a whole. Before you sign up for a plan or make major changes to your policy, know the facts about your coverage.