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What to Look for When Choosing a Medicare Advantage Plan

If you’re thinking of signing up for a Medicare Advantage plan or switching from Original Medicare to Medicare Advantage, here’s a list of things to keep in mind.

You can sign up for a Medicare Advantage plan if:

You’re enrolled in Medicare Part A and Part B (Original Medicare).

You live in the service area of the Medicare Advantage plan you’re considering.

Some Medicare Advantage plans require you to meet additional criteria. For example, a Special Needs Plan is a type of Medicare Advantage plan that limits membership to people who have chronic conditions, have both Medicare and Medicaid, or live in an institution (such as a nursing home). These plans cater benefits to people with unique needs who meet eligibility requirements.

Extra Benefits

Medicare Advantage plans are required to provide at least the same level of coverage as Original Medicare (except hospice care, which Medicare Part A covers). However, some people prefer Medicare Advantage because of the additional benefits these plans may offer, such as routine vision services, wellness programs, or medical savings accounts. These benefits aren’t covered under Original Medicare, and you’d normally pay the full cost to get them.

Prescription Drug Coverage

Many Medicare Advantage plans include prescription drug coverage, which isn’t included in Original Medicare except in limited situations. Known as Medicare Advantage Prescription Drug plans, they provide your health and medication benefits all in one plan. If you decide to enroll in a plan that includes this coverage, make sure that the plan covers all the medications you take. A plan’s formulary (list of prescription drugs it covers) may change at any time. You will receive notice from your plan when necessary.

You can get prescription drug benefits through a Medicare Advantage Prescription Drug plan as described above, or through a stand-alone Medicare Part D prescription drug plan.

Keep in mind that there may be a late-enrollment penalty for Medicare Part D if you don’t sign up for this coverage and go without creditable prescription drug coverage for longer than 63 days in a row.

Medicare Advantage plans may have different costs, depending on where you live and the company offering the plan. Some plans may cost less than Original Medicare.

What will I need to pay?

You’ll need to keep paying your Medicare Part B premium, regardless of the plan you sign up for. Some Medicare Advantage plans can have premiums as low as $0, but remember to consider all costs, like copayments, coinsurance and deductibles, which can affect your total spending. If you’re enrolling in a Medicare Advantage prescription drug plan, pay attention to copayments and coinsurance amounts for the medications you need. Different plans may have higher or lower costs to cover the same medications.

What will my maximum out-of-pocket costs be? You should also note the plan’s spending limit, which is different for each plan and can change from year to year. Medicare Advantage plans have an annual out-of-pocket spending cap, meaning the plan will pay the full cost for health services and supplies once you reach this limit. For example, if you have a health emergency and incur a lot of medical expenses, there’s a maximum you’ll pay before you’re fully covered for the rest of that year. Original Medicare doesn’t have this spending limit.

Provider Networks

Depending on the type of Medicare Advantage plan you choose, you may be required to use providers in the plan’s network. A Health Maintenance Organization (HMO) plan typically requires that you use providers in the plan’s network to be covered, while a Preferred Provider Organization (PPO) plan lets you see doctors outside of its preferred provider network, but at a higher cost. Some HMO plans come with a Point-of-Service option that lets you use out-of-network providers for some services. Make sure to follow the plan’s rules, or you could have to pay the full cost for services.

If it’s important to you to continue using a specific provider, verify that your doctors accept the Medicare Advantage plan you’re considering.

What plans are available in my area?

Not every Medicare Advantage plan is offered in every location, and costs can vary among plans. Particularly if you take prescription drugs, it’s worth taking the time to research what plans are offered in your service area to make sure you’re getting coverage that fits your needs.

Will my prescription drugs be covered?

Each Medicare Advantage prescription drug plan maintains its own formulary (a list of covered prescription drugs), so you may want to make sure a plan covers your medications before signing up. A plan’s formulary may change at any time. You will receive notice from your plan when necessary.

You can only enroll in a Medicare Advantage plan or make coverage changes during certain times of the year. For more information, see Medicare Enrollment and Election Periods.