What is a Medicare Advantage Plan

What is a Medicare Advantage Plan

What is a Medicare Advantage Plan?  A Medicare Advantage plan is an insurance plan that insurance companies offer that have benefits similar to a group health insurance plan. (There are some differences however). Because these plans are referred to by different names, there is often confusion about what Medicare Advantage plans are.

A “Medicare Advantage plan” is a general term used to describe  MA plans, MAPD plans (that is a Medicare Advantage plan with prescription drug coverage), Private Fee For Service Plans (PFFS Plans) and even Medicare Savings Accounts (MSA plans).  In general however, “Medicare Advantage” is usually referring to an MA or MAPD plan.

Medicare Advantage plans

People can use these plans to obtain Medical and drug coverage.  Medicare A and B provides only basic medical coverage and does not cover drugs.  Many people will enroll in a Medicare Advantage plan as an alternative to A and B.   When someone enrolls in an Advantage plan, the doctors and hospitals bill the advantage plan instead of billing Original Medicare. If you enrol in a Medicare Advantage plan, Original Medicare is no longer primary (or secondary either).

Most Advantage plans have networks that you must use in order to receive benefits (unless the plan has out of network benefits).  Many seniors incorrectly think that if they see an out of network doctor with a Medicare Advantage plan, they will still receive the basic Medicare A and B benefits which is incorrect. Medicare A and B benefits are not secondary to an MAPD plan.

Why would someone buy an MAPD plan?

They usually do it for two main reasons.  The plans are $0 monthly premium in many cases and they also include drug benefits.  Some of the plans also offer extra benefits that are not provided by Original Medicare such as vision and dental benefits. The plans also have copays which can make out of pocket costs for services received a bit more predictable than Original Medicare. An example of an MAPD plan benefits is provided here.    Aetna Value HMO Summary of Benefits

There are a number of nuances with MA and MAPD plans that are not being listed in this blog.  Take a good look at the benefit summary provided for more details.