Medicare Advantage (also called Part C) is a private insurance alternative to Original Medicare. Instead of getting your hospital and doctor coverage directly from the federal government through Parts A and B, you get it through a private insurance company that contracts with Medicare. These plans must cover everything Original Medicare covers, but most add extras like dental, vision, and hearing benefits. As of 2024, 54% of all Medicare beneficiaries, roughly 33 million people, are enrolled in Medicare Advantage rather than Original Medicare.
How Medicare Advantage Relates to Original Medicare
Original Medicare has two parts: Part A covers hospital stays, and Part B covers doctor visits and outpatient care. When you enroll in a Medicare Advantage plan, you still technically have Parts A and B, and you still pay your Part B premium ($185 per month in 2025). But instead of using those parts directly, your coverage flows through the private plan you choose. The plan receives a payment from Medicare for each enrollee, then manages your care and sets its own cost-sharing rules.
This means your copays, deductibles, and coinsurance amounts depend on which specific plan you pick. Two Medicare Advantage plans in the same city can have very different costs and rules. Those costs and rules can also change from year to year, so reviewing your plan annually matters.
What Extra Benefits Are Included
The biggest draw for many people is that Medicare Advantage plans typically bundle in benefits Original Medicare doesn’t offer. Common extras include routine dental care like cleanings and checkups, vision exams and eyeglasses, hearing aids, and fitness programs such as gym memberships or discounts. Some plans also cover transportation to medical appointments, over-the-counter health products, or meal delivery after a hospital stay.
The scope of these extras varies widely by plan. One plan might cover two dental cleanings a year while another offers a broader dental benefit with a dollar cap. Always check the specific benefit details rather than assuming all plans offer the same level of coverage.
Types of Medicare Advantage Plans
Most Medicare Advantage enrollees are in one of two plan types: HMOs and PPOs. The key difference is how much flexibility you have in choosing doctors and hospitals.
- HMO (Health Maintenance Organization): You generally must use doctors and hospitals within the plan’s network, except for emergencies or urgent care. You also need a referral from your primary care doctor to see a specialist. Some HMO plans have a “point-of-service” option that lets you go out of network for certain services at a higher cost.
- PPO (Preferred Provider Organization): You can see any provider in the plan’s network, but you also have the option to go out of network. Out-of-network care costs more. No referrals are needed to see specialists.
- PFFS (Private Fee-for-Service): You can see any Medicare-approved provider willing to accept the plan’s payment terms. No referrals needed, but not every provider will agree to the plan’s rates.
- SNP (Special Needs Plan): Designed for people with specific chronic conditions, those who are dually eligible for Medicare and Medicaid, or those living in certain institutions. SNPs can be structured as HMOs or PPOs, so referral and network rules depend on the plan type.
What You’ll Pay
Your first cost is the Part B premium, which you pay regardless of whether you’re in Original Medicare or Medicare Advantage. In 2025, that’s $185 per month. On top of that, most Medicare Advantage plans charge their own monthly premium, but here’s where things get interesting: 76% of people enrolled in individual Medicare Advantage plans with drug coverage pay no additional premium beyond their Part B cost. Among all enrollees, the average plan premium is just $13 per month.
Some plans actually reduce your Part B costs through what’s called a Part B rebate. About a third of individual plan enrollees in 2025 are in plans offering this rebate. The amounts vary, with more than half of those receiving rebates getting less than $10 a month, while 36% receive $50 or more per month.
One major advantage over Original Medicare is the out-of-pocket maximum. Original Medicare has no cap on what you can spend in a year, which is why many people on Original Medicare buy a supplemental Medigap policy. Medicare Advantage plans are required to set a yearly limit on your out-of-pocket spending for covered Part A and Part B services. Once you hit that limit, you pay nothing for covered services for the rest of the year. Plans may set different limits for in-network and out-of-network care.
Prescription Drug Coverage
Most Medicare Advantage plans bundle prescription drug coverage (Part D) into the plan itself. These are called MA-PD plans. When drug coverage is included, you don’t need to buy a separate Part D plan, and in fact you generally shouldn’t. If you enroll in a standalone Part D plan while in a Medicare Advantage plan that includes drug coverage, it can cause problems with your enrollment.
Not every Medicare Advantage plan includes drug coverage, though. If yours doesn’t, you can join a separate Medicare Part D plan. Before enrolling in any Medicare Advantage plan, check whether prescription drug coverage is included and whether your specific medications are on the plan’s formulary (its list of covered drugs).
Prior Authorization Requirements
One trade-off with Medicare Advantage is that plans typically require prior authorization before covering certain services or supplies. This means the plan needs to approve a treatment before you receive it, confirming that it’s medically necessary. Original Medicare rarely requires this kind of pre-approval.
Federal rules place limits on how plans use prior authorization. Plans can only use it to confirm a diagnosis or verify medical necessity, not as a blanket tool to deny care. Emergency behavioral health services cannot be subject to prior authorization at all. When a plan approves a course of treatment, that approval must last as long as medically reasonable to avoid disrupting your care.
If you switch from one Medicare Advantage plan to another while actively receiving treatment, the new plan must provide a minimum 90-day transition period during which it cannot require prior authorization for your ongoing treatment. Plans are also required to maintain a committee that reviews their prior authorization policies annually to ensure they’re consistent with what Original Medicare would cover.
When and How to Enroll
There are three main windows for joining or changing a Medicare Advantage plan:
- Initial Enrollment Period: When you first become eligible for Medicare, you have a seven-month window that starts three months before you get Part A and Part B and ends three months after. You need both Part A and Part B to join a Medicare Advantage plan.
- Annual Election Period (October 15 to December 7): This is the main yearly window when anyone on Medicare can join, drop, or switch Medicare Advantage plans. You can also move between Original Medicare and Medicare Advantage during this time. Changes take effect January 1.
- Medicare Advantage Open Enrollment Period (January 1 to March 31): This period is only for people already in a Medicare Advantage plan. You can switch to a different Medicare Advantage plan, or drop your plan and return to Original Medicare. If you return to Original Medicare, you can also join a standalone Part D drug plan.
How Plan Quality Is Measured
Medicare rates every Advantage plan on a one-to-five star scale each year, with five stars being the best. These ratings appear on Medicare’s Plan Finder tool during open enrollment, so you can compare plans in your area before choosing. The ratings factor in measures like how well the plan manages chronic conditions, member satisfaction, customer service, and how the plan handles prescriptions. Plans that earn higher ratings receive bonus payments from Medicare, giving them a financial incentive to perform well.
Star ratings are updated annually, so a plan rated four stars this year could drop or improve next year. Checking the current rating before each enrollment period gives you a useful snapshot of how the plan is performing for its members right now.