What Is the Medicare Advantage Program?

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Medicare participants can get government-supported health insurance from private companies. This coverage is offered through the Advantage Plans, which are often called Medicare Part C. Participants might find value in Advantage Plans because the plans cover all Medicare services, including prescription coverage.

Medicare Overview

Medicare is a federal health insurance program. It provides benefits for people who are at least 65 years and those with certain illnesses and disabilities. It’s divided into parts A and B or “Original Medicare,” and parts C, and D. Part A covers nursing facility, hospice, home health and inpatient hospital stays. Part B pays for some medical services, outpatient care, supplies and preventative care. Part D is for prescription drugs, and Part C covers everything under original Medicare except hospice care.

Advantage Plan History

Medicare participants have been able to get insurance from private companies since the 1970s. These plans often offer coverage through health maintenance organizations (HMOs). So, in effect, the Medicare Advantage Plans already existed since the 1970s, but under a different name. The Balanced Budget Act of 1997 named the plan “Medicare + Choice.” Later, the name was changed to Medicare Advantage as part of the Medicare Modernization Act of 2003.

Types of Advantage Plans

Advantage Plans include HMOs, preferred provider organizations, private fee-for-service plans, and special needs plans. HMOs allow beneficiaries to choose healthcare providers from within its network. PPOs operate like HMOs but participants can choose providers outside of the network. A PFFS plan determines how much it will pay providers for each service as well as the participant’s co-payment or coinsurance. Participants can go to any doctor that accepts the plan. SNPs provide coverage for specific diseases or conditions, such as chronic illnesses and nursing home dwellers.

How Advantage Plans Work

Medicare pays premiums to private companies with money received through monthly participant contributions. The cost for each participant depends on a variety of factors, including the plan's monthly premium, deductibles, and the cost of visits and services. The type and frequency of health care services, the inclusion of certain doctors in the provider network, and extra benefits also factor into the cost. Some Advantage Plans also include coverage for dental care, fitness programs and pharmacy access, and some include Part D.

Getting a Plan

To qualify for an advantage plan, seniors must have Medicare Part A and B and live within the service providers area. Seniors can search for plans on online through the Medicare Plan Finder. It will lead them to the provider’s website, or they can print an enrollment form and mail it to the provider. Seniors also can call 1-800-MEDICARE (1-800-633-4227) to sign up.