Key takeaways

  • Medicare Advantage plans (Part C) are offered by Medicare-approved private insurance companies and provide the same coverage as Original Medicare (parts A and B), but may also include additional benefits.
  • The cost of Medicare Advantage plans varies, with premiums, deductibles, and copays influencing the total expense. However, out-of-pocket costs are typically capped annually.
  • When choosing a Medicare Advantage plan, consider your individual healthcare and financial needs to determine if the additional coverage and potential cost savings align with your personal situation.

Medicare Advantage (Part C) is a type of insurance plan offering basic Medicare coverage and additional benefits. These plans are provided by Medicare-approved private insurance companies.

Note that Medicare Advantage also differs from Medicare Supplement Insurance (Medigap). While Medicare Advantage plans provide coverage directly, Medigap plans help you pay for out-of-pocket expenses such as copays and coinsurance. You can’t have both types of plans, so you’ll have to choose the best option based on your needs.

Medicare Advantage (Medicare Part C) plans offer the same coverage as Original Medicare (parts A and B), except for a few exclusions, such as clinical trials and hospice care. The coverage includes both hospital and medical insurance.

Depending on the type of plan you choose, you also may be covered for:

  • Prescription drug coverage: Although this isn’t typically offered under Original Medicare, nearly all Medicare Advantage plans include prescription drug coverage.
  • Dental, vision, and hearing: This includes non-medically necessary coverage, which isn’t offered under Original Medicare. The amount of coverage for these options varies between Medicare Advantage plans.

Additionally, some companies offer other health-related benefits under their Medicare Advantage plans, such as:

You qualify for Medicare Advantage once you have enrolled in Medicare Part A and Part B.

There are various types of Medicare Advantage plans to choose from, depending on your needs. They include:

  • Health Maintenance Organization (HMO): HMO plans stipulate that you can only seek in-network services from doctors and facilities. Specialists require out-of-network referrals.
  • Preferred Provider Organization (PPO): PPO plans charge different rates for doctors, providers, and hospitals depending on whether they’re in-network. You’ll pay more for out-of-network services.
  • Private Fee-for-Service (PFFS): PFFS plans allow you to receive services from any provider as long as they accept the payment terms and conditions of your PFFS plan.
  • Special Needs Plans (SNPs): SNPs are offered to specific groups of individuals who require ongoing medical care for chronic conditions.
  • Medicare savings account (MSA): MSA plans combine a high-deductible health plan with a medical savings account where Medicare deposits money to be used for medical-related services.

You can compare the available plans in your area on Medicare.gov.

The total cost of a Medicare Advantage plan is generally determined by:

  • premiums
  • deductibles
  • copayments
  • how often and where you seek services
  • the types of services you need
  • whether you receive Medicaid

Generally, the Centers for Medicare & Medicaid Services (CMS) estimates the average monthly premium for all Medicare Advantage plans to be around $14 in 2026.

One benefit of a Medicare Advantage plan is that most other out-of-pocket costs are capped yearly, which may help lower overall costs.

Given all these factors, there’s no one specific cost for a Medicare Advantage plan. These are all important factors to consider when comparing plans.

If you’re trying to choose a Medicare Advantage plan, you’ll want to consider the following:

  • The type of coverage you need: Are you looking for only prescription drug coverage, or are you interested in dental or vision coverage as well? Are you interested in other health-related services?
  • The out-of-pocket costs you afford: Consider whether an MA plan covers any premiums or deductibles, the monthly and yearly cost of the plan itself, and how often and to what extent medical care is needed.
  • What Medicare Advantage plan interests you: Does an HMO plan serve your needs best, or are you better off with a PPO or MSA plan? Do you have special long-term costs that can only be met with an SNP plan?
  • Other factors that could impact your medical needs: Do you travel or require out-of-state care for certain conditions? Are you predisposed to certain conditions that will require future referrals or out-of-network visits?

What is the upside of a Medicare Advantage plan?

  • Many Medicare Advantage plans offer additional coverage that original Medicare doesn’t offer, like prescription drugs, dental, vision, hearing, and more.
  • Medicare Advantage plans offer in-network care, which can be more easily coordinated.
  • Research has shown that Medicare Advantage plans may result in lower medical service prices than Original Medicare.

What is the downside of a Medicare Advantage plan?

  • Depending on which plan you choose, you may be limited in your provider options.
  • If you need to see a specialist for certain conditions, you may need a referral first.
  • If you travel, your out-of-town services may not be covered.

Medicare Advantage plans offer medical coverage above and beyond what Medicare Parts A and B can offer. This may include additional health services, such as prescription drugs, vision, dental, and more.

While some Medicare Advantage plans have more out-of-pocket costs, others will help you save on long-term medical costs.

Not everyone needs a Medicare Advantage plan, so consider your medical and financial needs before choosing the best type of Medicare for you.