What Is Medicare Advantage? How Plans Work
A Medicare Advantage plan is a private health plan, approved by Medicare, that you can choose instead of Original Medicare to get your Part A and Part B benefits.
Most plans also include Part D drug coverage, and many add extras like dental, vision and hearing.
As a licensed agent who compares these plans with Medicare clients every fall, here's how these plans actually work, what they cost in a real year, and what I'd check before joining one.
Medicare Advantage (Part C) replaces how you use Original Medicare, not whether you have it.
You keep paying your Part B premium. In exchange, a private plan handles your care with its own network, copays, approval rules and an annual out-of-pocket limit.
The tradeoff is usually lower monthly premiums and extra benefits in exchange for networks, prior authorization and benefits that can change every year.
How Medicare Advantage Works
To join a Medicare Advantage plan, you need to be enrolled in both Part A and Part B, and you must live in the plan's service area.
Once you join, the plan, not Original Medicare, pays for your covered care.
You'll get a plan ID card to use at the doctor and pharmacy. Keep your red, white and blue Medicare card somewhere safe, because you'll need it if you ever return to Original Medicare.
Your plan will send you three documents worth keeping:
- Evidence of Coverage (EOC): the full rulebook for your benefits, costs and approval requirements.
- Provider directory: the doctors, hospitals and other providers in the plan's network.
- Formulary: the list of covered drugs, if your plan includes Part D.
Questions about claims or benefits go to the insurance company, not Medicare.
Your plan can change every year
Medicare Advantage plans renew on a calendar-year basis, and the terms can change each January 1.
Your plan must mail an Annual Notice of Change (ANOC) by September 30 explaining next year's changes to premiums, copays and covered drugs.
The ANOC won't necessarily list every doctor or hospital leaving the network, so check your providers separately for the coming year.
The ANOC is one of the most useful letters Medicare Advantage members get, and it's often set aside unread.
Every year, our agency hears from people who learn in January that their copays went up or their drug moved to a higher tier, changes that were spelled out in that fall letter.
Network changes are harder to spot, which is why I suggest calling your key doctors each fall, too.
Staying in the same plan isn't the same as having the same coverage. See our guide on whether you need to re-enroll every year.
What Medicare Advantage Covers
Medicare Advantage plans generally must cover the medically necessary services that Original Medicare covers under Parts A and B.
There are a few exceptions. Hospice care, for example, is still paid by Original Medicare even if you're in a Medicare Advantage plan.
What differs is how you get that care and what you pay for it.
- Hospital and medical care: all medically necessary Part A and Part B services, with the plan's own copays and coinsurance.
- Emergency and urgent care: covered anywhere in the U.S., in or out of network.
- Prescription drugs: most plans include Part D, but not all. Some plan types, like Medical Savings Account plans, never do.
- Extra benefits: many plans add dental, vision, hearing, fitness or over-the-counter allowances. These vary widely and often come with annual dollar limits.
One detail people miss: dental benefits in many plans are capped at a set dollar amount per year. If you expect major dental work, compare the plan's dental limit against standalone dental options for people on Medicare.
How Much Does Medicare Advantage Really Cost?
A $0-premium plan isn't a $0 plan. Your real cost has four layers:
- Part B premium: you still pay it. The standard premium is $202.90 a month in 2026.
- Plan premium: many plans charge $0, others charge a monthly premium on top of Part B.
- Copays, coinsurance and deductibles: what you pay when you use care. These vary by plan and by type of service. Some plans have a medical deductible, some don't, and drug coverage may have its own separate deductible.
- Out-of-pocket maximum: the most you'll pay in a year for covered Part A and B services.
For 2026, CMS caps in-network out-of-pocket costs at $9,250. For plans that cover out-of-network care, like PPOs, the combined in- and out-of-network limit can be as high as $13,900. Many plans set lower limits. Drug costs don't count toward this cap, but Part D has its own $2,100 out-of-pocket limit for 2026.
Example: one year on a $0-premium plan
Here's a hypothetical year for someone on a $0-premium HMO who has a knee replacement. Copays are illustrative, not from a specific plan.
| Cost | Example amount | Annual total |
|---|---|---|
| Part B premium (2026) | $202.90 × 12 months | $2,435 |
| Plan premium | $0 | $0 |
| Inpatient hospital stay | $395/day × 5 days | $1,975 |
| Specialist visits | $45 × 8 visits | $360 |
| Outpatient physical therapy | $30 × 18 visits | $540 |
| MRI | $250 | $250 |
| Total (before drugs) | $5,560 |
The $0 premium was real, but this person still spent more than $5,500.
In a healthy year, the same plan might cost little beyond the Part B premium. In a very bad year, the plan's out-of-pocket maximum is the number that matters most.
That's why I always tell people to look at the out-of-pocket limit before the premium.
Types of Medicare Advantage Plans
Most people choose between an HMO and a PPO. The other types serve narrower needs. Rules vary by plan, so treat this as a general guide and confirm details in the plan's EOC.
| Plan type | Network | Out-of-network care | Referrals | Drug coverage |
|---|---|---|---|---|
| HMO | Required | Generally not covered except emergencies, urgent care and out-of-area dialysis | Often required | Usually included |
| HMO-POS | Required for most care | Some services, at higher cost | Often required | Usually included |
| PPO | Preferred | Covered at higher cost, if the provider accepts the plan | Usually not required | Usually included |
| PFFS | Optional or none | Any Medicare provider who accepts the plan's terms | Not required | Sometimes; if not, you can add a standalone Part D plan |
| SNP | Usually required | Varies by plan | Usually required | Always included |
| MSA | None | Any Medicare provider | Not required | Never included; add a standalone Part D plan |
HMOs tend to have lower costs and lower out-of-pocket limits in exchange for tighter rules. PPOs cost more but give you room to see providers outside the network.
If your HMO or PPO includes drug coverage, you generally can't also join a standalone Part D plan. Joining one will usually disenroll you from your Medicare Advantage plan.
Special Needs Plans (SNPs)
SNPs are limited to people who qualify in one of three ways:
- Dual Eligible (D-SNP): you have both Medicare and Medicaid.
- Chronic Condition (C-SNP): you have a specific severe or disabling condition, like diabetes or heart failure.
- Institutional (I-SNP): you live in a nursing facility or need that level of care at home.
Advantages and Disadvantages
Medicare Advantage works well for some people and poorly for others. Here's the honest picture.
Potential advantages
- Low or $0 plan premiums in many areas
- An annual out-of-pocket limit on covered medical care
- Drug coverage often built in
- Extras like dental, vision, hearing and fitness
- One card and one company for most care
Potential limitations
- Provider networks, especially in HMOs
- Prior authorization for some services
- Copays that add up with frequent care
- Benefits, networks and drug lists can change yearly
- Limited coverage when traveling outside the U.S.
How these weigh out depends on your health, your doctors and where you spend your time. For a side-by-side look, see Original Medicare vs. Medicare Advantage and our Medicare Advantage vs. Medicare Supplement comparison.
What to Check Before Joining Medicare Advantage
These five questions do more to protect you than comparing extra benefits.
1. Can I keep my doctors?
Check the plan's directory, then call each doctor's office and ask if they accept that exact plan for next year.
"We take Humana" or "we take Aetna" isn't enough. Offices often accept some of a carrier's plans but not others.
2. Will I need prior authorization?
Many plans require approval before certain services, like advanced imaging, surgery, skilled nursing or home health care.
Requirements vary by plan. The EOC lists which services need approval.
3. What happens if I get seriously ill?
Look at hospital copays per day, the coinsurance for chemotherapy and other Part B drugs, and the out-of-pocket maximum.
Ask yourself whether you could pay that maximum in a bad year.
4. Can my benefits change?
Yes. Premiums, copays, networks and drug lists can all change each January.
Plans can also leave your area entirely, which has happened to many members in recent years.
5. Can I go back to Original Medicare?
Yes, during certain enrollment periods. Getting a Medigap policy afterward is a separate question, covered below.
The Medigap question most people don't ask
You can leave Medicare Advantage and return to Original Medicare during an eligible enrollment period. What isn't guaranteed is your ability to buy a Medicare Supplement (Medigap) policy to cover Original Medicare's gaps.
Outside of your Medigap Open Enrollment Period and specific guaranteed issue rights, insurers in most states can review your health history and decline you or charge more.
Federal "trial rights" can help in some situations, such as when you join Medicare Advantage at 65 and leave within the first 12 months. Specific eligibility requirements apply, and some states offer broader protections.
Some of the most difficult conversations I have are with people in their 70s who were diagnosed with something serious, want to move back to Original Medicare with a Medigap plan, and find they can't pass underwriting.
They didn't make a bad choice at 65. They just didn't know it could be harder to reverse later. Our guide on switching from Medicare Advantage to Medigap covers the details.
When You Can Enroll or Switch
First, you need Part A and Part B. Signing up for those has its own deadlines and penalties, covered in our Medicare eligibility and enrollment guide.
Once you have both, these are the main windows for joining or changing a Medicare Advantage plan:
| Enrollment period | Dates | What you can do |
|---|---|---|
| Initial Enrollment Period | Usually the 7 months around your 65th birthday month; timing differs if you qualify through disability | Join a Medicare Advantage plan when you're first eligible |
| Annual Open Enrollment | October 15 – December 7 | Join, switch or drop a plan; changes start January 1 |
| Medicare Advantage Open Enrollment | January 1 – March 31 (or your first 3 months in a new plan) | Make one switch to another plan, or return to Original Medicare and add a drug plan |
| 5-Star Special Enrollment Period | December 8 – November 30 of the following year | Switch once to a plan rated 5 stars, if one is available in your area |
| Special Enrollment Periods | Varies | Change plans after qualifying events like moving or losing employer coverage |
The General Enrollment Period (January 1 – March 31) is for people who missed signing up for Part A or Part B. It isn't a Medicare Advantage enrollment window by itself.
For every window and qualifying event, see our full guide to Medicare enrollment periods or Medicare's joining a plan page.
How to compare plans
Medicare's Plan Finder lets you compare plans in your ZIP code, including estimated drug costs and star ratings.
A licensed agent can also compare plans for you, but ask which carriers they represent. An agent who only offers one or two companies can only show you part of the market. Our guide to working with a Medicare agent explains what to look for.
Frequently Asked Questions
Is Medicare Advantage the same as Medicare Part C?
Yes. Part C is the official name for Medicare Advantage.
Do all Medicare Advantage plans include prescription drug coverage?
No. Most do, but some don't, including all Medical Savings Account plans.
Check the plan's formulary to confirm your specific drugs are covered and see which tier they fall in.
Do Medicare Advantage plans cover dental, vision and hearing?
Many do, but coverage levels and annual limits vary widely. Check the EOC for dollar caps and waiting periods.
Do all doctors accept Medicare Advantage?
No. Each plan has its own network, and a doctor may accept one plan from a company but not another.
Search the plan's directory, then confirm directly with the office, since networks can change during the year.
Can I have Medicare Advantage and a Medigap plan at the same time?
Not in a way that helps. If you already have a Medigap policy when you join Medicare Advantage, you can keep it, but it can't pay your Medicare Advantage copays, deductibles or premiums.
Insurers also can't sell you a new Medigap policy while you're in Medicare Advantage, unless you're switching back to Original Medicare.
Does Medicare Advantage work when I travel?
Emergency and urgent care are covered anywhere in the U.S. Routine care outside your plan's area usually isn't, unless you're in a PPO or a plan with a travel benefit.
If you split time between states, see our guide to Medicare plans for travelers and snowbirds.
What if my Medicare Advantage plan leaves my area?
You'll get a Special Enrollment Period to choose another plan, and in many cases a guaranteed issue right to buy certain Medigap policies.
The Bottom Line
Medicare Advantage can be a good fit if your doctors are in-network, you rarely travel, you're comfortable with plan approval rules, and you could handle the out-of-pocket maximum in a bad year.
If provider flexibility, frequent travel or predictable medical expenses are priorities, compare Medicare Advantage with Original Medicare and Medigap before enrolling.
Keep in mind that qualifying for Medigap later may require medical underwriting, depending on your state and circumstances.
Whichever way you go, review your plan every fall. The plan you chose last year isn't automatically the right plan next year.
If you'd like help comparing plans in your area, you can request a quote or call us at 888-414-4547.
Disclaimer: Dollar amounts in this article reflect 2026 figures published by the Centers for Medicare & Medicaid Services (CMS), including the CY 2026 Medicare Advantage maximum out-of-pocket limits, the CY 2026 Rate Announcement (Part D out-of-pocket threshold) and the 2026 Medicare Parts A & B Premiums and Deductibles fact sheet. These amounts are updated annually.
The cost example is hypothetical. Actual premiums, copays, networks and benefits vary by plan and location. This article is for educational purposes and is not a recommendation of any specific plan. For official information, visit Medicare.gov's Joining a Plan and What Medicare Health Plans Cover pages.
