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What are Medicare Advantage Plans?

Medicare Advantage replaced prior programs, alternatively called Medicare+Choice or Part C, which originated in the Balanced Budget Act of 1997. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 altered those programs and renamed them as Medicare Advantage.

Medicare Advantage Plans must cover all of the services that Original Medicare covers except hospice care and some care in qualifying clinical research studies. Original Medicare covers hospice care and some costs for clinical research studies even if you’re in a Medicare Advantage Plan. The primary difference between Original Medicare (Parts A and B) and an Advantage Plan is that your coverage is provided through an insurance company.

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.

Each Medicare Advantage Plan can charge different  out-of-pocket costs

. They can also have different rules for how you get services, like:

  • Whether you need a referral to see a specialist
  • If you have to go to 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 include prescription drug coverage (Part D). You can join a separate Medicare drug plan with certain types of plans that:

  • Can’t offer drug coverage (like Medicare Medical Savings Account plans)
  • Choose not to offer drug coverage (like some Private Fee-for-Service plans)

You’ll be disenrolled from your Medicare Advantage Plan and returned to Original Medicare if both of these apply:

  • You’re in a Medicare Advantage HMO or PPO.
  • You join a separate Medicare drug plan.

You can’t buy (and don’t need) Medigap while you’re in a Medicare Advantage Plan. You can’t use Medigap to pay for any costs (copayments, deductibles, and premiums) you have under a Medicare Advantage Plan. Learn about your options related to Medigap policies and Medicare Advantage Plans.

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