What is Medicare Advantage?

• With HMOs, you typically choose a primary care doctor who directs your care, and you may need a referral from that doctor to see a specialist. You usually don’t have coverage for out-of-network providers except in emergencies.

• PPOs also have a network of doctors and facilities, but you usually don’t need a referral to see a specialist. You may have coverage if you go outside the plan’s network, but you’ll usually have higher copayments and other out-of-pocket costs.

What are the costs for Medicare Advantage plans?

You must enroll in Medicare parts A and B before you can get Medicare Advantage, and you need to pay the Part B premium, which is $164.90 a month for most people in 2023. You must also pay the Part A premium if required although most Medicare beneficiaries don’t have to pay a premium for Part A.

You may have to pay a monthly premium to the Medicare Advantage insurer. The average monthly premium for Medicare Advantage enrollees is $18 in 2023, but more than half the plans charge no premium.

Even though Medicare Advantage plans must provide at least as much coverage as original Medicare, you may have different out-of-pocket costs. For example, you may have a daily copayment for the first few days in a hospital, such as $325 for each of the first five days as a hospital inpatient, rather than the Part A hospital deductible of $1,600 per benefit period in 2023.

These copayments can vary by plan. You’ll also have copayments or coinsurance for your prescription drugs.

Unlike original Medicare, Medicare Advantage plans have an annual maximum out-of-pocket spending limit for services covered under parts A and B, which must be $8,300 or less for in-network health services in 2023 and $12,450 or less for in-network and out-of-network services combined. Some plans have lower spending limits.

Who is eligible for Medicare Advantage?

To join a Medicare Advantage plan, you must be enrolled in parts A and B of Medicare. The plan cannot refuse your application, regardless of your health needs.

In the past, you couldn’t sign up for Medicare Advantage if you had permanent kidney failure, known as end-stage renal disease. But the 21st Century Cures Act of 2016 changed the rules, and as of Jan. 1, 2021, people with kidney failure can choose either original Medicare or Medicare Advantage.

Medicare Advantage plans cannot charge you higher premiums, deductibles or copays based on your current state of health or preexisting conditions. Some Medicare Advantage plans, called Special Needs Plans (SNPs), provide coverage for certain groups of people, including plans that focus on coverage for those with chronic conditions, such as diabetes, heart failure or kidney failure.

You can sign up for Medicare Advantage or switch plans only at certain times, including when you first enroll in parts A and B and during open enrollment each year from Oct. 15 to Dec. 7 for new coverage starting Jan. 1. If you already have a Medicare Advantage plan, you can also switch to a different plan or change from Medicare Advantage to original Medicare, from Jan. 1 to March 31 each year.

Keep in mind

• Premiums, copayments, covered services, drug coverage, lists of doctors and other benefits can change for Medicare Advantage plans every year. Make it a point to review costs and coverage for Medicare Advantage plans available in your area every year during open enrollment.

The Plan Finder makes it easy to compare costs and coverage for the Medicare Advantage plans available in your zip code, showing premiums, benefits, copayments and out-of-pocket costs for your medications. You usually need to contact the plan directly to make sure your doctors and other providers are covered.

• Medigap, the Medicare supplement insurance that people often buy to help cover original Medicare’s deductibles and copayments, doesn’t work with Medicare Advantage plans. You can’t buy a Medigap policy while you’re in a Medicare Advantage plan. You must pay the Medicare Advantage copayments and deductibles yourself.

Updated January 30, 2023

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