A Medicare Advantage Plan is a type of Medicare health plan offered by a private insurance company that contracts with Medicare to provide you with all your Part A and Part B benefits. The most popular Medicare Advantage Plans are Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). There are other less popular types – but “right” for some beneficiaries.
If you're enrolled in a Medicare Advantage Plan, Part A (inpatient) and Part B (outpatient) Medicare services are administered and managed by the insurance company and not Original Medicare.
Companies offering Medicare Advantage Plans must follow certain general rules set by Medicare, but Medicare Advantage Plans are NOT Standardized. Each Medicare Advantage Plan has the discretion to charge different out-of-pocket costs and to establish different requirements for how you may get services (like whether you need a referral to see a specialist or if you have to stay within a Network of doctors, facilities, and suppliers, defined by the plan, for non-emergency or non-urgent care). These requirements can change each year.
Medicare Advantage Plans, sometimes called "Part C" or "MA Plans," are offered by private companies approved by Medicare. If you join a Medicare Advantage Plan, you must still have Medicare Parts A and B. Then you'll get your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage through the Medicare Advantage Plan and not Original Medicare.
Medicare pays a fixed amount for your care each month to the companies offering Medicare Advantage Plans. These companies must follow rules set by Medicare.
However, each Medicare Advantage Plan can charge different out-of-pocket costs and have different rules for how you get services (like whether you need a referral to see a specialist or if you have to go to only doctors, facilities, or suppliers that belong to the plan for non-emergency or non-urgent care). These rules can change each year.
Most Medicare Advantage Plans offer prescription drug coverage. For those that do not you can join a Medicare Prescription Drug Plan. (Medicare Part D)
Watch out! - You can't have prescription drug coverage through both a Medicare Advantage Plan and a Medicare Prescription Drug Plan. If you're in a Medicare Advantage Plan that includes drug coverage and you join a Medicare Prescription Drug Plan, you'll be disenrolled from your Medicare Advantage Plan and returned to Original Medicare.