How to Compare Medicare Advantage Plans

checkmark Fact checked Contributing expert: Roseann Birch; Reviewed by: Leron Moore - Published: September 14, 2020

What You Should Know

  • 1 In 2020, there were more than 3,100 Medicare Advantage plans for Americans to choose from — more than any previous year.
  • 2 Choosing the right plan requires a careful comparison of costs and how often you expect to need the benefits.
  • 3 All Medicare Advantage plans are required to have an annual limit on out-of-pocket costs. Once you’ve reached this limit, you can’t be charged any additional costs.
  • 4 There are also types of Medicare Advantage plans that determine how you receive your healthcare services. Because this may affect what doctors or hospitals you can use, it’s important to understand how each plan works.

If you’ve decided that a Medicare Advantage plan is the right option for you, the next step is to find the policy that meets your medical and financial needs. Considering the wide range of policies available, it can be challenging to compare Medicare Advantage plans.

In 2020, there were more than 3,100 Medicare Advantage plans for Americans to choose from — more than any previous year. On average, a beneficiary has access to 28 Medicare Advantage plans for individual enrollment in their service area. Keep in mind that this varies by location — depending on where you live, you could have significantly less coverage options. 

It’s important to find a plan that makes the most sense for your particular situation. Read on for tips on how to compare Medicare Advantage plans and narrow your choices.

Compare Medicare Advantage Plan Benefits

Medicare Advantage, also known as Medicare Part C, is delivered through private insurance companies under contract with Medicare. These plans must cover the same benefits available through Original Medicare, including:

  • Inpatient care in a hospital, skilled nursing facility, or home health (Part A)
  • Medically necessary and preventive services, such as physician visits, tests, screenings, and flu shots (Part B)

Insurance providers then have the flexibility to offer a combination of additional health-related benefits, such as prescription drugs, dental, vision, and hearing.

Here are common supplemental benefits available through Medicare Advantage plans and the percentage of plans offering them in 2020:

  • Prescription drugs (90%)
  • Fitness (93%)
  • Dental cleanings (88%)
  • Eye exams and glasses (87%)
  • Hearing aids (83%)
  • Meal benefits, including meal delivery, cooking classes, or nutrition education (46%)
  • Non-emergency transportation (33%)
  • Bathroom safety devices (6%)
  • In-home support (4%)
  • Telemonitoring (4%)
  • Support for caregivers (2%)

Consider Medicare Advantage Plan Costs

Choosing the right plan requires a careful comparison of costs and how often you expect to need the benefits. For example, plans with low or no monthly premiums may have higher cost-sharing when you do use a service.

What are the costs of Medicare Advantage plans to consider? Here’s a breakdown of typical out-of-pocket expenses you may need to pay.

  • Monthly Plan B premiums must still be paid to Medicare, even if you’re enrolled in a Medicare Advantage plan.
  • Additional monthly premiums may be payable to your private insurer. Some plans have no monthly premiums.
  • Deductibles are the costs you’re required to pay before the plan pays. There may be an annual deductible and additional deductibles for certain services.
  • Coinsurance is the percentage of a claim you must pay. 
  • Copayments are the fixed amounts you pay per service or treatment.

All Medicare Advantage plans are required to have an annual limit on out-of-pocket costs. Once you’ve reached this limit, you can’t be charged any additional costs.

Understand Medicare Advantage Plan Types

There are also types of Medicare Advantage plans that determine how you receive your healthcare services. Because this may affect what doctors or hospitals you can use, it’s important to understand how each plan works.

HMO

Health Maintenance Organization (HMO) plan provides patients with access to a network of healthcare providers under contract with the insurance company. If you use a provider outside of this network, you may have to pay the full cost yourself. HMO plans typically require you to choose a primary care doctor who coordinates your care and determines if you may receive a referral to see a specialist.

PPO

Preferred Provider Organization (PPO) plans also have a network of providers that agree to provide services to plan subscribers. Patients may see any healthcare provider they wish, but costs are generally lower when using a provider within the PPO’s network.

Typically, PPOs allow more freedom than HMOs in how you receive care. They don’t require you to have a primary care doctor, and you may see any doctor or specialist you choose without a referral.

PFFS

Private Fee-for-Service (PFFS) plans establish the rate they’re willing to pay for medical services. Plan members may see any Medicare-approved doctor in the United States who accepts these rates. Patients should always confirm they can use the PFFS plan before receiving treatment, as some providers may accept the rate for some services and not others.

Generally, PFFS plan members aren’t required to have a primary care doctor and don’t need a referral to see a specialist. Some plans may have a network of physicians to make it easier for you to locate a healthcare provider. 

SNPs

Special Needs Plans (SNPs) restrict enrollment to individuals who have certain chronic medical conditions. These plans provide coordinated care and benefits tailored to the enrollees’ needs and often work with doctors who specialize in the condition. Some of the medical diagnoses covered by SNPs are end-stage renal disease, chronic heart failure, dementia, and HIV/AIDS.

There are also SNPs for those who:

  • Live in an institution, such as a nursing home
  • Require nursing care at home
  • Have both Medicare and Medicaid coverage

What to Ask When Comparing Medicare Advantage Plans

Medicare Advantage plans can make sense for those who would like health insurance beyond Original Medicare Parts A and B. Keep in mind that plans vary significantly in terms of:

  • Benefits
  • Out-of-pocket costs
  • How healthcare is delivered

Here are questions to consider when comparing Medicare Advantage plans.

  • How much are monthly premiums?
  • What portion of costs do you have to pay before the plan begins coverage (also known as the deductible)?
  • How much of the cost of a doctor’s visit or hospital stay are you required to pay?
  • What is the plan’s cap on annual out-of-pocket costs? What qualifies as an out-of-pocket cost?
  • Does your current doctor accept the plan? If not, are you willing to switch doctors? Which doctors near you accept the plan?
  • Do you want a choice in healthcare providers, or are you satisfied using a pre-approved network of physicians and hospitals?
  • Can you receive health care outside of your service area aside from emergencies?
  • Can you see a specialist without a referral?
  • Do you want the ability to coordinate your own care, or do you want a primary doctor?
  • What types of supplemental benefits are important to you? What are the plan’s policies regarding accessing these benefits?
  • Are your current prescription drugs covered under the plan? What is your out-of-pocket cost?
  • Is the plan well-rated by Medicare?

Remember, not all types of plans are available in every service area. Visit the Medicare website for a handy online tool to compare Medicare Advantage plans. 

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Contributing Expert:

Roseann Birch, Medicare Consultant

With experience in the insurance field since 1986, Roseann Birch is a seasoned Medicare consultant who is passionate in educating and guiding seniors through their Medicare and Medicare Advantage journey.

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Reviewed by:

Leron Moore, Medicare Consultant

With over 10 years of experience in the Medicare industry, Leron Moore has dedicated his career to effecting change, educating, informing, and resolving issues for Medicare patients and their families.