How Medicare Advantage Plans Work

As you prepare for retirement, you’ve probably read up on Medicare benefits. You know all about Part A for hospital expenses and Part B for medical expenses. Do you start to get a little fuzzy when the topic advances to Medicare Advantage Plans (also known as Part C plans)? To be a wise health care consumer, you need to know how these plans work, too.

Part C plans are not something you would have in addition to Parts A and B. Rather, you can purchase a Part C plan to instead of having original Medicare (Parts A and B). Private insurance companies sell Medicare Advantage Plans, but they’re still officially considered Medicare as far as the government is concerned. Insurance companies that sell Part C plans have to offer the same or better coverage as the government does with Parts A and B.

When you join a Medicare Advantage Plan, the government is notified, and the premium payments that you’ve been making out of your Social Security checks for Part B will stop. To pay for Part C coverage, you make individual arrangements with the insurance company from which you purchased your plan.

Even though Medicare makes the rules that private companies offering Medicare Advantage Plans have to follow, there can be significant cost differences among various companies’ offerings, so shop carefully. Also be mindful of other rules imposed by private companies, such as whether you need a referral to see a specialist.