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Switching to a Medicare Advantage Plan

The Medicare Advantage program, also known as Medicare Part C, provides a way you can get your Original Medicare (Part A and Part B) benefits through a private, Medicare-approved insurance company instead of directly from the government. If you’re thinking of switching to a Medicare Advantage plan, you may find this article useful.

How Medicare Advantage Plans Work

Medicare Advantage plans are required to deliver the same coverage as Original Medicare, Part A and Part B, except hospice care, which is still covered under Part A. Medicare Advantage plans often include extra benefits, such as prescription drug coverage and routine dental services.

Medicare Advantage plans have contracts with Medicare; the government program pays each plan a fixed amount each month. The insurance company pays a portion of your costs according to Medicare rules and coordinates your care.

There are costs associated with Medicare Advantage plans. Many Medicare services require copayments or coinsurance, and plans might have deductibles and premiums. Some plans have premiums as low as $0 per month, but you may want to look at other plan costs when you’re looking for a plan. No matter what Medicare Advantage plan you may enroll in, you still need to pay your monthly Medicare Part B Premium.

Depending on the type of plan, there may be different rules. For example, some plans may restrict you to network doctors in the plan’s network and/or require you to get a referral to see a specialist.

Every Medicare Advantage plan has a maximum out-of-pocket amount; this amount is the most that you will spend on health costs each year. After you spend up to that amount, your Medicare Advantage plan will pay all costs for Medicare covered services. Each Medicare Advantage plan could have a different limit, and that amount may change each year.

Types of Medicare Advantage Plans

There are many kinds of Medicare Advantage plans, although not every type of plan may be available in the area where you live. Some types of plans include:

  • Health Maintenance Organization (HMO)

  • Preferred Provider Organization (PPO)

  • Private Fee-for-Service (PFFS)

  • Special Needs Plans (SNPs)

  • HMO Point-Of-Service (HMO-POS)

  • Medical Savings Account (MSA)

Pros of Medicare Advantage Plans

Out of pocket maximum

You may not know that Original Medicare (Part A and Part B) has no out-of-pocket maximum. That means that if you face a catastrophic health concern, you may be responsible to pay tens of thousands of dollars out of pocket.

All Medicare Advantage plans have out-of-pocket maximums, which prevent you from very high spending when a serious illness happens. Once you meet this limit, your plan covers the costs for all Medicare-covered services for the rest of the year. In 2021 the out of pocket limit is $7,550, according to the Kaiser Family Foundation.  Plans can set lower limits, but not higher.

Medicare Advantage plans may offer extra benefits beyond what Original Medicare covers. Medicare Advantage plans must cover, at a minimum, everything that Part A and Part B covers. They also may offer extra benefits such as…

Prescription Drugs

Most Medicare Advantage plans have prescription drug coverage. This could be good news if you take one or more prescription drugs.

But you may want to look carefully at plans you’re considering, making sure they cover prescription drugs and that they cover your medications specifically. Each Medicare Advantage Prescription Drug plan has a formulary (a list of covered medications). You can compare the formulary with your own list of prescriptions. A plan’s formulary may change at any time. You will receive notice from your plan when necessary.

Vision, dental & hearing

Many Medicare Advantage plans offer routine vision, dental, and hearing coverage. This could include coverage for routine eye exams, routine eyewear, routine hearing exams, and hearing aids.

Other extra perks

Other extra benefits may include:

  • Meal delivery for beneficiaries with chronic illnesses

  • Transportation for non-medical needs like grocery shopping

  • Carpet shampooing to reduce asthma attacks

  • Transport to a doctor appointment or to see a nutritionist

  • Alternative medicine such as acupuncture

Keep in mind not all Medicare Advantage plans offer the same extra benefits. Since benefits vary by plan, check with the specific Medicare Advantage plan you’re considering for more details.

Lower out of pocket costs

Under Medicare Advantage, each plan negotiates its own rates with providers. You may pay lower deductibles and copayments/coinsurance than you would pay with Original Medicare. Some Medicare Advantage plans have deductibles as low as $0.

ESRD coverage

Medicare Advantage plans can now accept you if you’re a Medicare beneficiary under age 65 who has ESRD (end-stage renal disease, a type of kidney failure).

Cons of Medicare Advantage plans


Many Medicare Advantage plans have networks, such as HMOs (health maintenance organizations) or PPOs* (preferred provider organization). Many Medicare Advantage plans may have provider networks that limit the doctors and other providers you can use. Under Original Medicare, you can use any provider that accepts Medicare assignment.

If you want to stay with your current doctor, you can ask the doctor if s/he is in the plan’s network, or check the plan’s website to view its list of providers. Not every type of Medicare Advantage plan has a provider network, and some plans may give you more flexibility to use out-of-network providers.

Keep in mind that some plan types, such as HMOs, may require you to get a referral to see a specialist. Others, such as PPOs, typically don’t require a referral to see a specialist.

Doesn’t work with Medicare Supplement

Medicare Advantage and Medicare Supplement insurance plans are mutually exclusive. Medicare Supplement insurance plans help cover Medicare’s out-of-pocket costs, such as copayments, coinsurance and deductibles. You can’t get this help if you have a Medicare Advantage plan.

If you tend to visit health-care providers frequently, you might want to weigh the costs of Medicare Advantage plans against Medicare Supplement (Medigap) plans. Medicare Advantage plans generally charge a copayment or coinsurance for most doctor visits, and you might have to pay a deductible before the plan starts covering these visits. Medigap plans help pay for Original Medicare’s out-of-pocket costs. Read more about Medigap plans.

The out of pocket maximum resets every calendar year

… and it also varies among plans (although no plan may exceed the Medicare-set maximum amount). For example, suppose your plan out-of-pocket maximum is $6,700 per year. Say you start getting cancer treatment in October. You could reach your $6,700 maximum in 3 months. Then as you keep getting treatment in January, you could reach your $6,700 maximum again in three more months. That’s $13,400 out of pocket in six months.

When you can switch to a Medicare Advantage plan

If you’re thinking about switching to a Medicare Advantage plan, be aware that you can generally make this change only during certain time periods.

You can enroll during your Initial Coverage Election Period (ICEP), which is generally the same seven-month time period as your Medicare Initial Enrollment Period – when you’re first eligible for Medicare. However, your Initial Coverage Election Period will be different if you chose to delay enrollment in Medicare Part B. In this case, your Initial Coverage Election Period (ICEP) would start three months before you enroll in Part B, and end the last day of the month before your Part B coverage starts.

Another opportunity to enroll in Medicare Advantage plans is during Fall Open Enrollment (also known as the Annual Election Period), which runs from October 15 to December 7 every year. If you already have a Medicare Advantage plan, you can also use this period to change plans or disenroll from your plan and go back to Original Medicare.

In some situations you may qualify for a Special Election Period – for example, if you had health coverage through an employer and the coverage ended. Learn more about Special Election Periods here.

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