What is Medicare Advantage?
So we’ve covered Original Medicare, Medigap plans, and Part D. Now let’s look at the alternative. In 2005, when Medicare was busy creating Part D, they also reinvented Part C of Medicare, and renamed it "Medicare Advantage", or MA for short. In the most basic terms, Medicare Advantage is a privatized version of Medicare.
So we’ve covered Original Medicare, Medigap plans, and Part D. Now let’s look at the alternative. In 2005, when Medicare was busy creating Part D, they also reinvented Part C of Medicare, and renamed it "Medicare Advantage", or MA for short. In the most basic terms, Medicare Advantage is a privatized version of Medicare.
Instead of Medicare administering your benefits, a private insurance company takes over. A Medicare Advantage plan operates like an all-in-one plan giving you hospital, and medical coverage in a single plan, and most include prescription drug coverage. Similar to Original Medicare you will be responsible for covering deductibles, copayments and coinsurance, which will vary from one plan to the next, but are often more affordable to just Original Medicare by itself.
Instead of Medicare administering your benefits, a private insurance company takes over. A Medicare Advantage plan operates like an all-in-one plan giving you hospital, and medical coverage in a single plan, and most include prescription drug coverage. Similar to Original Medicare you will be responsible for covering deductibles, copayments and coinsurance, which will vary from one plan to the next, but are often more affordable to just Original Medicare by itself.
Many Medicare Advantage plans also offer additional benefits that Medicare doesn’t offer such as dental, vision and hearing, chiropractic services, acupuncture, gym memberships, healthy living benefits, transportation and
more.
However, unlike Original Medicare where you have national coverage with any hospital or doctor that accepts Medicare, with a Medicare Advantage Plan, you will now be limited to a specific network of hospitals and doctors
that accept that private insurance plan. Among Medicare Advantage Plans you will find that there are different types of plans including HMO, PPO, PFFS, HMO-POS and SNP.
Many Medicare Advantage plans also offer additional benefits that Medicare doesn’t offer such as dental, vision and hearing, chiropractic services, acupuncture, gym memberships, healthy living benefits, transportation and
more.
However, unlike Original Medicare where you have national coverage with any hospital or doctor that accepts Medicare, with a Medicare Advantage Plan, you will now be limited to a specific network of hospitals and doctors
that accept that private insurance plan. Among Medicare Advantage Plans you will find that there are different types of plans including HMO, PPO, PFFS, HMO-POS and SNP.
HMO - Health Maintenance Organization
HMO - Health Maintenance Organization
An HMO or Health Maintenance Organization plan is generally the strictest of network plans requiring that you stay inside the network for any non-emergency service. If you go out of network you’ll pay 100% of the cost for service. In addition, you must be assigned to a Primary Care Physician and obtain referrals to see certain specialists. In the event of an emergency you’d still be covered outside of the network, but once stabilized, you’d need to be moved to a network facility.
An HMO or Health Maintenance Organization plan is generally the strictest of network plans requiring that you stay inside the network for any non-emergency service. If you go out of network you’ll pay 100% of the cost for service. In addition, you must be assigned to a Primary Care Physician and obtain referrals to see certain specialists. In the event of an emergency you’d still be covered outside of the network, but once stabilized, you’d need to be moved to a network facility.
PPO - Preferred Provider Organization
A PPO or Preferred Provider Organization provides you with a bit more flexibility. Under a PPO you can generally visit any provider you wish under two very specific conditions: The provider must accept Medicare and must
also accept the terms of the PPO plan. While you may get coverage outside of the PPO network it often
comes at a higher price. Be sure to review out of network coverage costs when considering a PPO plan.
PPO - Preferred Provider Organization
A PPO or Preferred Provider Organization provides you with a bit more flexibility. Under a PPO you can generally visit any provider you wish under two very specific conditions: The provider must accept Medicare and must
also accept the terms of the PPO plan. While you may get coverage outside of the PPO network it often comes at a higher price. Be sure to review out of network coverage costs when considering a PPO plan.
PFFS - Private Fee For Service
PFFS - Private Fee For Service
A PFFS plan, also known as a Private Fee For Service plan, is an older and less common plan. It operates similar to a PPO plan allowing you to visit any provider nationwide that, number one, accepts Medicare and number two accepts the terms of the PFFS plan. Unlike a PPO plan, a PFFS plan usually doesn’t have a preferred network of providers who are offering lower costs.
A PFFS plan, also known as a Private Fee For Service plan, is an older and less common plan. It operates similar to a PPO plan allowing you to visit any provider nationwide that, number one, accepts Medicare and number two accepts the terms of the PFFS plan. Unlike a PPO plan, a PFFS plan usually doesn’t have a preferred network of providers who are offering lower costs.
HMO-POS - Health Maintenance Organization-Point Of Service
HMO-POS - Health Maintenance Organization-Point Of Service
An HMO-POS or HMO Point-Of-Service plan functions just like an HMO except that there are some opportunities where you can go out of network or avoid referrals and still get coverage, albeit sometimes at a higher cost. These plans are becoming more popular as network flexibility becomes more in-demand. One of the best advantages an HMO-POS plan gives you is the ability to choose your own specialists within the plan's HMO network.
An HMO-POS or HMO Point-Of-Service plan functions just like an HMO except that there are some opportunities where you can go out of network or avoid referrals and still get coverage, albeit sometimes at a higher cost. These plans are becoming more popular as network flexibility becomes more in-demand. One of the best advantages an HMO-POS plan gives you is the ability to choose your own specialists within the plan's HMO network.
SNP - Special Needs Plan
An SNP or Special Needs Plan is a specific plan designed to provide benefits and services to people with specific diseases, certain health care needs, or limited incomes.
SNPs design their benefits, provider choices, and drug formularies to meet the specific needs of the groups they serve. The most common of these is a Dual Eligible Special Needs Plan or DSNP for people who have both Medicare and Medicaid.
SNP - Special Needs Plan
An SNP or Special Needs Plan is a specific plan designed to provide benefits and services to people with specific diseases, certain health care needs, or limited incomes.
SNPs design their benefits, provider choices, and drug formularies to meet the specific needs of the groups they serve. The most common of these is a Dual Eligible Special Needs Plan or DSNP for people who have both Medicare and Medicaid.
While each of these plan types will vary on their coverages, costs and networks, each plan networks, each plan type will also provide you with a Maximum-Out-of-Pocket (MOOP) cost when using your plan. In the current year 2025, that MOOP could be as high as $9350 annually, meaning that is the most you would have to spend over a single year for hospital and medical.
Your prescription drug costs DO NOT count towards your MOOP!
While each of these plan types will vary on their coverages, costs and networks, each plan networks, each plan type will also provide you with a Maximum-Out-of-Pocket (MOOP) cost when using your plan. In the current year 2025, that MOOP could be as high as $9350 annually, meaning that is the most you would have to spend over a single year for hospital and medical.
Your prescription drug costs DO NOT count towards your MOOP!
This is a proprietary website and is not associated with, endorsed, or authorized by Medicare or the federal government.
We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.
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