Medicare Advantage

A Medicare Advantage Plan — also known as “Part C” or “MA Plan” — is offered by private companies that are approved by Medicare. If a person chooses to enroll in a Medicare Advantage Plan, they still have Medicare; their Medicare Part A coverage (Hospital Insurance) and Medicare Part B coverage (Medical Insurance) coverage is provided by the Medicare Advantage Plan — and not from Original Medicare. In addition, most Medicare Advantage Plans include prescription drug coverage (Part D).

These plans cover all Medicare services, and most of them also offer additional coverage such as vision, hearing and dental. Medicare pays a set amount for care each month to the companies that offer Medicare Advantage Plans, who must follow rules set by Medicare. Out-of-pocket costs in a Medicare Advantage Plan (Part C) are typically lower, but this depends on many factors. For example, the costs differ if the plan charges a monthly premium, pays any monthly Medicare Part B (Medical Insurance) premium, or has a yearly deductible (or any additional deductibles). Medicare Advantage Plans have a yearly limit on out-of-pocket costs for medical services; once this limit is reached, there is no charge for covered services. Applicants need to be informed of all the possible costs, rules and limits.

The Centers for Medicare & Medicaid Services (CMS) is the federal agency that runs Medicare. CMS is part of the U.S. Department of Health and Human Services. Medicare is financed by a portion of the payroll taxes paid by workers and their employers. It also is financed in part by monthly premiums paid by the beneficiaries that could be deducted from Social Security checks.