Understanding Medicare Advantage: What to Consider Before Choosing a Plan
- Medicare Messengers Staff
- 3 days ago
- 5 min read
Medicare Advantage can provide another way to receive your Medicare benefits, but understanding how these plans work is important before making a coverage decision.
Medicare Advantage, also known as Medicare Part C, is offered by Medicare-approved private insurance companies. To join a Medicare Advantage plan, you must have Medicare Part A and Part B. These plans provide your Part A and Part B benefits, and most Medicare Advantage plans also include Medicare Part D prescription drug coverage.
But Medicare Advantage plans aren't all structured the same way.
Provider networks, prescription drug coverage, referrals, prior authorization requirements, premiums, deductibles, copayments, and additional benefits can vary by plan and service area.
That's why understanding the type of plan is only the beginning.
Before Comparing Plans, Understand Your Own Needs
Instead of beginning with the question, "Which Medicare Advantage plan is best?" consider starting with questions about your healthcare needs.
For example:
Are your doctors and specialists in the plan's network?
Are your prescription medications covered?
Which pharmacies participate in the plan?
Will you need referrals to see specialists?
Does the plan allow out-of-network care?
What are the premium, deductible, copayments and coinsurance?
What is the plan's maximum out-of-pocket amount for covered Part A and Part B services?
Do you spend significant time outside the plan's service area?
Are prior authorizations required for services you regularly receive?
Medicare itself recommends checking prescriptions, doctors, pharmacies, benefits, costs and coverage when comparing plans.
Once you understand what matters to you, you can begin looking at how the different Medicare Advantage plan structures work.
1. Health Maintenance Organization (HMO) Plans
A Medicare Advantage Health Maintenance Organization, or HMO, generally requires members to receive healthcare services from doctors, hospitals and other providers within the plan's network.
There are important exceptions. Emergency care, out-of-area urgent care and temporary out-of-area dialysis are generally covered even when received outside the network. Some HMO Point-of-Service plans may also permit certain out-of-network services, usually at a higher cost.
HMO members usually need to select a primary care doctor, and referrals may be required for specialists. Most Medicare HMO plans include Part D prescription drug coverage.
An HMO may therefore be worth exploring if its provider network includes the doctors, specialists and healthcare facilities you want to use and its other coverage provisions meet your needs.
2. Preferred Provider Organization (PPO) Plans
A Preferred Provider Organization, or PPO, also uses a network of doctors, hospitals and healthcare providers.
Unlike an HMO, a PPO generally allows members to receive covered services from providers outside the plan's network. However, using an out-of-network provider will usually cost more.
PPO plans generally do not require you to select a primary care doctor or obtain referrals to see specialists. Most PPO Medicare Advantage plans also include prescription drug coverage.
The ability to receive out-of-network care can make PPOs attractive to some beneficiaries, but that flexibility should be considered alongside premiums, cost sharing, prescription coverage and other plan rules.
3. Private Fee-for-Service (PFFS) Plans
A Private Fee-for-Service, or PFFS, plan operates differently from an HMO or PPO.
The private insurance company determines how much the plan will pay providers for covered services and how much you will pay.
Depending on the plan, you may receive care from a Medicare-approved provider or facility that accepts the plan's payment terms and agrees to treat you. Some PFFS plans have provider networks.
One particularly important distinction involves prescriptions.
PFFS plans do not necessarily include Medicare Part D prescription drug coverage. If a PFFS plan doesn't provide drug coverage, Medicare allows you to enroll in a separate Medicare drug plan.
That makes prescription coverage an important item to verify before enrolling.
4. Special Needs Plans (SNPs)
A Special Needs Plan, or SNP, is a Medicare Advantage plan designed for people who meet specific eligibility requirements.
Medicare currently identifies three primary categories:
Chronic Condition SNPs (C-SNPs) serve people with certain severe or disabling chronic conditions.
Dual Eligible SNPs (D-SNPs) serve qualifying individuals who have both Medicare and Medicaid.
Institutional SNPs (I-SNPs) serve qualifying individuals who live in certain institutions or meet applicable institutional-level-care requirements.
SNPs are structured as HMO or PPO plans and tailor benefits, provider choices and prescription drug formularies to the populations they serve. All SNPs include Medicare Part D prescription drug coverage.
Eligibility matters. Someone generally must continue meeting the applicable plan requirements to remain enrolled in an SNP.
5. Medicare Medical Savings Account (MSA) Plans
There's another Medicare Advantage option that is sometimes overlooked: the Medicare Medical Savings Account plan.
An MSA combines a high-deductible Medicare Advantage plan with a special savings account. The plan deposits money into the account that can be used toward qualified healthcare expenses.
MSA plans generally don't have provider networks, but the healthcare provider must meet Medicare requirements and agree to provide the service.
MSA plans don't include Medicare Part D coverage. Someone who wants prescription drug coverage can enroll separately in a Medicare drug plan.
Availability of MSA plans, like other Medicare Advantage plans, depends on where you live.
The Plan Type Doesn't Tell You Everything
Knowing whether a plan is an HMO, PPO, PFFS, SNP or MSA helps you understand its general structure.
It doesn't tell you everything you need to know.
Two PPO plans available in the same area, for example, can have different premiums, provider networks, prescription formularies, copayments, benefits and prior authorization requirements.
Medicare also notes that Medicare Advantage plans typically may require prior authorization for certain services or supplies.
This is why comparing the actual plan details matters just as much as understanding the type of plan.
Looking Ahead to Medicare Coverage for 2027
Medicare Advantage and Part D continue to change.
CMS finalized policy changes for contract year 2027 affecting Medicare Advantage and Part D, including changes to Star Ratings and certain enrollment processes. CMS is also continuing implementation of major Part D changes, including the redesigned prescription drug benefit.
But national Medicare changes don't tell you exactly what an individual plan will offer.
Plans available in your area can change from year to year, along with provider networks, formularies, premiums, cost sharing and supplemental benefits.
That's why Medicare beneficiaries should review their plan information each year rather than assuming their current coverage will remain exactly the same.
Review More Than the Monthly Premium
A Medicare Advantage plan with a low or even $0 plan premium is not necessarily the lowest-cost option for every individual.
Remember that Medicare Advantage enrollees generally must continue paying their Medicare Part B premium. Depending on the plan, there may also be additional premiums, deductibles, copayments and coinsurance.
Your healthcare usage matters.
Your prescriptions matter.
Your providers matter.
And where you live matters.
Medicare provides its own Plan Compare tool for researching Medicare Advantage and Part D plans available in a beneficiary's area.
Have Questions About Your Medicare Options?
You don't have to sort through Medicare coverage information without assistance.
Medicare Messengers, a division of American Family Financial Services, can connect you with a licensed insurance professional who can help you understand Medicare coverage options and the factors you may want to consider when comparing plans available in your area.
Request a Medicare Consultation
Use our PlanEnroll consultation process to select the Medicare information you would like to discuss and submit your request. A Medicare Messengers licensed insurance professional will follow up with you.
Prefer to speak with someone?
Call Medicare Messengers at 757-673-5630 to speak with a licensed insurance professional.
Important Medicare Information
Medicare Messengers is a division of American Family Financial Services and is not affiliated with, connected to, or endorsed by the U.S. government or the federal Medicare program.
Plan availability, benefits, provider networks, prescription drug coverage, premiums, deductibles and other costs vary by plan and service area. Not all Medicare Advantage plan types are available in every area.
For official Medicare information or to compare Medicare plans, visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227). TTY users can call 1-877-486-2048.
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