Medicare Advantage plans are all-in-one alternatives to original Medicare offered by private companies. They’re funded by Medicare and by the people signing up for the specific plan.

Who fundsHow it’s funded
MedicareMedicare pays the company offering the Medicare Advantage plan a monthly fixed amount for your care.
IndividualsThe company offering the Medicare Advantage plan charges you out-of-pocket costs. These costs vary by company and plan offerings.

Keep reading to learn more about Medicare Advantage plans and the out-of-pocket costs for these plans.

The amount you pay for Medicare Advantage is based on a number of factors, including:

  • Monthly premiums. Some plans don’t have premiums.
  • Monthly Medicare Part B premiums. Some plans pay all or part of Part B premiums.
  • Yearly deductible. May include yearly deductibles or additional deductibles.
  • Method of payment. The coinsurance or copayment you pay for each service or visit.
  • Type and frequency. The type of services you need and how often they’re supplied.
  • Doctor/supplier acceptance. Affects costs if you’re in a PPO, PFFS, or MSA plan, or you go out-of-network.
  • Rules. Based on your plan rules, such as using network suppliers.
  • Extra benefits. What you need and what the plan pays for.
  • Yearly limit. Your out-of-pocket costs for all medical services.
  • Medicaid. If you have it.
  • State help. If you receive it.

These factors change yearly according to:

  • premiums
  • deductibles
  • services

The companies offering the plans, not Medicare, determine how much you pay for covered services.

Sometimes referred to as MA plans or Part C, Medicare Advantage plans are offered by private companies approved by Medicare. These companies contract with Medicare to bundle together these Medicare services:

  • Medicare Part A: inpatient hospital stays, hospice care, care in a skilled nursing facility, and some home healthcare
  • Medicare Part B: certain doctor’s services, outpatient care, medical supplies, and preventive services
  • Medicare Part D (usually): prescription drugs

Some Medicare Advantage plans offer additional coverage, such as:

The most common Medicare Advantage plans are:

  • HMO (health maintenance organization) plans
  • PPO (preferred provider organization) plans
  • PFFS (private fee-for-service) plans
  • SNPs (special needs plans)

Less common Medicare Advantage Plans include:

  • Medicare medical savings account (MSA) plans
  • HMOPOS (HMO point of service) plans

You can usually join most Medicare Advantage plans if you:

  • have Medicare Part A and Part B
  • live in the plans service area
  • don’t have end-stage renal disease (ESRD)

Medicare Advantage Plans — also referred to as MA Plans or Part C — are offered by private companies and paid for by Medicare and by the Medicare-eligible individuals who sign up for the plan.

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