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How Medicare Advantage plans work

How Medicare Advantage plans work

Medicare Advantage plans, also known as “Medicare Part C” or “MA Plans” are a channel for individuals to obtain health insurance benefits provided by private insurance companies and approved by Medicare. These plans also cover everything provided by Medicare Part A and Part B along with other benefits such as coverage for prescription drugs, dental, and vision issues.

Medicare sets the rules for the Medicare Advantage plans. Private insurance companies are deposited with money from Medicare every month, which in turn covers your healthcare costs. These plans come in a variety of types with varying benefits such as Medical Savings Account (MSA), Private Fee-For-Service (PFFS), Health Maintenance Organization (HMO), Special Needs Plan (SNPs), Preferred Provider Organization (PPO), and HMO Point-Of-Service (HMOPOS).

Before getting a Medicare Advantage plan, it is important to be aware of its pros and cons. Some of them are listed below. These points will help you decide if a Medicare Advantage plan is the right option for you.


  • Medicare Advantage plans cover several benefits in addition to those included in Medicare Parts A and B.
  • There are a few private insurance companies that offer a premium of $0 for a Medicare Advantage plan.
  • Every Medicare Advantage plan comes with an out-of-pocket limit. Once you reach the limit, you won’t pay anything for all the covered services. This limit varies with every Medicare Advantage plan and it changes every year.


  • Every insurance company offers a different Medicare Advantage plan. Sometimes, the out-of-pocket costs can be higher than what the original Medicare plan offers. Additionally, plan premiums, copayments, and benefits keep varying each year.
  • Medicare Advantage plans can choose not to renew their contract with Medicare in the upcoming years.
  • Private insurance companies offering Medicare Advantage plans can prove to be rigid with the rules to get coverage for health services and products, like for instance getting a referral to see a specialist. As a result, you may be required to change your hospital or doctor or end up paying a higher cost.
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