You can get your Medicare benefits through Original Medicare, or a Medicare Advantage Plan (like an HMO or PPO). If you have Original Medicare, the government pays for Medicare benefits when you get them. Medicare Advantage Plans, sometimes called “Part C” or “MA Plans,” are offered by private companies approved by Medicare. Medicare pays these companies to cover your Medicare
benefits. If you join a Medicare Advantage Plan, the plan will provide all of your Medicare
Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage. The most common types of Medicare Advantage Plan are:
Health Maintenance Organizations (HMOs)
Preferred Provider Organizations (PPOs)
Private Fee-For-Service (PFFS)
All Medicare Advantage Plans must include a limit on your out-of-pocket expenses for Part A and B services (for example, the out-of-pocket maximum for HMO plans in 2017 is $6,700). These limits tend to be high. Plans can’t include cost-sharing (copays or coinsurances) that are higher than they would be under Original Medicare for certain services, like chemotherapy and dialysis, but they can have higher cost sharing for other services. Medicare Advantage Plans can also provide additional benefits that Original Medicare does not cover, such as routine vision or dental care.
Medicare Advantage Plans often charge a premium in addition to the Medicare Part B premium. They also generally charge a fixed amount, called a copayment, that you are responsible for whenever you receive a service. Some plans charge a percentage of the cost of the service, called a coinsurance, for some or all services.
You can join a Medicare Advantage Plan if:
You have Medicare Parts A and B;
You live in the plan’s service area; and
You do not have End-Stage Renal Disease (ESRD).
Note: If you have ESRD that requires dialysis or a kidney transplant, you can enroll in a Medicare Advantage Plan if you join a Special Needs Plan (SNP) that specifically accepts people with ESRD or if other special circumstances apply.
If you want Medicare coverage through a Medicare Advantage Plan and also want drug coverage (Part D), you must generally choose a plan that offers Part D drug coverage as part of its benefits package. If you join an MSA, a PFFS without drug coverage, or a Cost Plan, you can join a stand-alone Part D drug plan.