Medicare Advantage – or Medicare Part C – allows Medicare beneficiaries to receive Medicare-covered benefits through private health plans instead of through Original Medicare. Advantage plans often include additional benefits – beyond those included in Medicare Part A and Part B – such as prescription drug coverage, dental and vision coverage, and even gym memberships.
Medicare Advantage enrollees pay Part B premiums (deducted from Social Security checks for beneficiaries receiving Social Security) plus the premium for their Medicare Advantage plan. Some Medicare Advantage plans have no premium at all, leaving the beneficiary to only pay the Part B premium.
Medicare Advantage plans have built-in caps on out-of-pocket costs ($6,700 is the maximum out-of-pocket in 2018), which is not the case for Original medicare.
But Medicare Advantage coverage is typically limited to network of providers, usually in a local area — as opposed to Original Medicare’s nationwide coverage area. An Advantage plan may be an HMO, PPO or private fee-for-service plan, but it must be approved by Medicare and follow its guidelines.
During the annual Medicare open enrollment period (October 15 through December 7), Medicare beneficiaries can change Advantage plans, switch from Medicare Advantage back to Original Medicare or vice versa. Changes made during open enrollment are effective on January 1.
As of 2017, a third of all Medicare beneficiaries were enrolled in Medicare Advantage plans, up from 13 percent in 2004.
You can read more about the choice between Original Medicare and Medicare Advantage here.