Medicare Advantage

Medicare Advantage plans were created under the Balanced Budget Act of 1997 and signed into law by President Bill Clinton. These plans are commonly called Part C of Medicare. Some doctor’s offices call them replacement plans, more on that below.

Congress designed this program to give Medicare beneficiaries a lower-premium option than Medigap. They also have very little Medicare underwriting. This means they are a coverage option for people who missed their open enrollment window for Medigap and now cannot qualify for Medigap due to health conditions.

Medicare Advantage plans (Part C) are not the same as Medigap plans. Important facts to know:

• Medicare Advantage replaces Original Medicare for coverage – you get all benefits through a private insurer
• Despite sometimes being called “Medicare replacement,” you never lose your Medicare status
• You can switch back to Original Medicare during:

  • Annual Enrollment (Oct 15-Dec 7)

  • Medicare Advantage Open Enrollment (Jan 1-Mar 31)

  • Special Enrollment Periods

Key differences from Medigap:
✓ Uses provider networks (HMO/PPO)
✓ Often includes drug coverage
✓ Has out-of-pocket maximums
✓ Lower premiums but more cost-sharing

Medicare prefers the term “Medicare Advantage” over “replacement” since you maintain Medicare rights and can return to Original Medicare.

A Medicare Advantage plan is a private insurance alternative for receiving your Medicare Part A and B benefits. When you enroll, Medicare pays the insurance company a fixed monthly amount to manage your healthcare coverage.

You must maintain both Part A and Part B enrollment, as these form the foundation of your Advantage plan coverage. At medical appointments, you’ll use your plan’s ID card instead of your Medicare card, as providers will bill your private insurer directly.

While some call these “Medicare replacement” plans, this terminology can be misleading since you retain the right to return to Original Medicare during annual enrollment periods (October 15-December 7) or other qualifying election periods. The private insurer assumes your medical risk in exchange for the fixed payments from Medicare, which funds the plan’s operations and benefits structure.

Every Medicare Advantage plan provides a detailed summary of benefits outlining your specific copays for services like doctor visits, surgeries, and lab work—all of which are covered under Original Medicare. Typical cost-sharing might include $10 for primary care visits and around $50 for specialists, while higher copays often apply for hospital stays, imaging, and procedures, potentially totaling several hundred dollars annually. These amounts vary significantly by plan and location, so reviewing local options is essential.

Many 2025 Medicare Advantage plans also include extra benefits like routine dental, vision, and hearing coverage, along with gym memberships (such as SilverSneakers). Comparing these ancillary benefits between plans can be complex—our experts at Our Medicare Coach simplify this process by analyzing coverage details and costs.

In exchange for lower premiums that Advantage plans offer, you agree to play by certain rules. Most Medicare Advantage plans have HMO or PPO networks.

Medicare HMO networks generally require to treat only with network providers, except in emergencies. You will usually need to select a primary care physician. That physician can coordinate a referral if you need to see a specialist. There some HMO plans that offer a point-of-service feature where you can see out-of-network providers in certain circumstances.

Medicare HMO plans are the most prevalent type of network. According a study by Mark Farrah associates, they will represent 71% of all Medicare Advantage plans on the market.

Medicare PPO networks allow you to see doctors outside the network but you’ll have substantially higher out-of-pocket spending to do so.

In limited counties, there are Medicare Private-Fee-for-Service plans. These plans may or may not include Part D. How you access care is also different. While this plan type was very common in the past, it has been slowly phased out in most areas.

If you are deciding between Medicare Advantage and Medigap, you’ll want to consider some of the rules before you enroll.

Enrollment Requirements

✓ Must have both Part A and Part B
✓ Must live in the plan’s service area
⚠️ Dropping Part B will automatically cancel your Advantage plan

Medical Underwriting

• No health questions asked (since 2021)
• End-Stage Renal Disease (ESRD) restrictions were removed

Network Rules

• HMO plans: Only cover in-network care (except emergencies)
• PPO plans: Cover out-of-network care but at higher costs
• Many plans require referrals for specialists (especially HMOs)
• Some procedures need prior authorization

Key Differences from Medigap

• Advantage plans have networks and referrals

• Medigap lets you see any Medicare provider

• Advantage often includes extra benefits (like dental)

• Medigap offers predictable costs

These rules make Medicare Advantage very different from Medigap—choose carefully based on your healthcare needs.

Put your red, white and blue Medicare card in a safe place. Do not give it to any of your healthcare providers. If they bill Medicare, those bills will be rejected because they should have been sent to your Medicare Advantage insurance company for processing.

You must direct your providers to bill your Medicare Advantage plan. People who enroll in Advantage plans for Medicare are agreeing, for the rest of the calendar year, to be covered by the plan instead of Original Medicare.

Medicare Advantage plans operate on an annual cycle with specific enrollment periods. When you first become eligible for Medicare at 65, you can enroll during your Initial Enrollment Period. After this initial sign-up, you’re generally committed to your plan for the remainder of the calendar year unless you qualify for a Special Enrollment Period due to circumstances like moving or losing other coverage.

The primary opportunity to make changes comes during the Annual Election Period each fall from October 15 through December 7. Any modifications you make during this window will take effect January 1 of the following year. There’s also a Medicare Advantage Open Enrollment Period from January 1 to March 31 exclusively for those already enrolled in Medicare Advantage who want to make plan changes.

If you decide to return to Original Medicare, you must proactively notify your Medicare Advantage plan carrier to disenroll. Simply choosing a new plan or doing nothing will leave you enrolled in your current Advantage plan. When switching back to Original Medicare, remember you’ll likely want to add a standalone Part D prescription drug plan to maintain comprehensive coverage.

This special window lets you:

• Switch to a different Medicare Advantage plan
• OR return to Original Medicare (with Part D)

Please note:

• You can only use this period once per year

• Returning to Medigap may require medical underwriting (unless it’s your first time in a MA plan)

Many people discover their new Advantage plan doesn’t cover their doctors or medications. This period gives you a chance to fix those mistakes.

The intent of Congress in creating these plans was to give you options in accessing your Medicare benefits. Some reasons why people might choose an Advantage plan are:

• Often have $0 or low monthly premiums (you must continue to pay your Medicare Part B premium)
• Pay-as-you-go costs (copays/coinsurance) with annual out-of-pocket maximums
• Combine medical + drug coverage in one plan
•  May include extra benefits like vision or dental
• Limitations, copayments, and restrictions may apply

Important: These plans have networks and may require referrals.

Original Medicare offers nationwide access to providers but has no spending cap. The right choice depends on your health needs and budget.

Medigap Provides:

• Freedom to see any Medicare-accepted doctor nationwide (over 1 million providers)

• Predictable costs – most plans cover your 20% coinsurance after Medicare pays 80%

• No repetitive copays (e.g., Plan G covers all but your Part B deductible)

• Requires separate Part D prescription coverage

• No routine dental/vision/hearing benefits

Medicare Advantage provides:

• Lower monthly premiums (but often more cost-sharing)

• Built-in Part D drug coverage

• Annual out-of-pocket maximums

• Possible extra benefits like limited dental/vision

• Network restrictions may apply

Both options have merits – the best choice depends on your healthcare needs, budget, and preference for provider flexibility.

Before enrolling, keep in mind:

Provider Networks
Not all doctors/hospitals accept every Advantage plan. Always verify your providers are in-network before joining.

Annual Changes
Plans can alter benefits, costs, and networks each year. You’ll receive an Annual Notice of Change each September – review it carefully with your agent.

Lock-In Period
You’re generally committed for the full year. Changes are only allowed during:

• Annual Election Period (Oct 15-Dec 7)

• Medicare Advantage Open Enrollment (Jan 1-Mar 31)

• Special Enrollment Periods (qualifying circumstances)

Long-Term Implications
If you enroll at 65, your Medigap Open Enrollment window closes 6 months after Part B starts. Later Medigap applications require medical underwriting and may be denied based on health.

Yes. Medicare Advantage requires:

1. Active enrollment in both Part A and Part B

2. Continued payment of your monthly Part B premium ($174.70 for most in 2024) – even if your Advantage plan has a $0 premium

Think of it this way: Your Part B premium funds your core Medicare coverage, while the Advantage plan simply changes how you access those benefits.

Note: Some Advantage plans may help pay Part B premiums through rebate programs (like giveback benefits), but this is plan-specific.

While some Medicare Advantage plans advertise “$0 premiums,” they’re not completely free. Here’s what you’ll pay:

✓ Required: Your monthly Medicare Part B premium ($174.70 for most in 2024)
✓ When care is needed: Deductibles, copays and coinsurance per the plan’s cost-sharing structure

These plans can offer $0 premiums because:

• Medicare pays the insurer a set amount monthly to manage your care
• Costs are shifted to when you actually use services

Remember: “Premium-free” refers only to the plan’s additional charge – you’re always responsible for your Part B premium and care costs.

There’s no single “best” Medicare Advantage plan—the right choice depends on your:

• Healthcare needs (doctors, medications, expected care)

• Budget (premiums, copays, out-of-pocket max)

• Preferred benefits (dental, vision, extras)

Your neighbor’s plan might not fit you. Before enrolling, compare plans in your area, Verify your doctors/drugs are covered, and Consult a licensed agent—they’ll explain options clearly

Your health coverage is too important to guess. Get expert help to make a confident decision. Contact Our Medicare Coach for help today by filling out the form below, or calling us at 1-855-954-0664

We work with numerous plans in all 50 states, and we can guide you through your options.