How Medicare Advantage Works?

When you join a Medicare Advantage plan, you're still in the Medicare program. You keep your Medicare card, you keep paying your Part B premium, and you keep all the rights and protections Medicare provides. What changes is who administers your benefits: the private plan pays your claims instead of Medicare paying them directly, and the plan sets its own copays, provider network, and extra benefits within rules Medicare establishes.

Every Medicare Advantage plan must cover everything Original Medicare covers (except hospice care, which Part A continues to cover directly). Beyond that floor, plans differ significantly - which is exactly why comparing them matters.

What Medicare Advantage Plans Typically Include

  • Everything in Parts A and B.

    Hospital stays, doctor visits, outpatient care, lab work, durable medical equipment, preventive services.

  • Prescription drug coverage.

    Most Medicare Advantage plans include Part D drug coverage built in (these are called MA-PD plans). Each plan has its own formulary - the list of covered drugs - so checking your specific medications against a plan's formulary is one of the most important steps before enrolling.

  • An annual out-of-pocket maximum.

    This is a real difference from Original Medicare, which has no cap on your 20% coinsurance. In 2026, Medicare Advantage plans may not set their in-network out-of-pocket maximum higher than $9,250 , and many plans set theirs considerably lower. Once you reach the cap, the plan pays 100% of covered in-network services for the rest of the year.

  • Extra benefits.

    Depending on the plan and your area, these may include routine dental, vision exams and eyewear allowances, hearing aids, fitness memberships, over-the-counter item allowances, and transportation to medical appointments. Benefits vary by plan and county, and not every benefit is available on every plan.

What Medicare Advantage Plans Typically Include

  • Plan premium: Many Medicare Advantage plans in many areas have a $0 monthly premium. Others charge a monthly premium on top of your Part B premium. The average Medicare Advantage premium in 2026 is roughly $14 per month.
  • Part B premium: You continue paying this regardless of plan. The 2026 standard Part B premium is $202.90 per month.
  • Copays and coinsurance: Set by each plan - for example, a fixed copay for a primary care visit or specialist visit.
  • Out-of-pocket maximum: Your worst-case annual cost for covered in-network medical care, capped at $9,250 in 2026 and often lower.
A $0-premium plan is not "free insurance" - your real cost is the combination of premium, copays as you use care, and the plan's out-of-pocket maximum. Two plans with identical premiums can produce very different annual costs depending on your doctors and health needs.

HMO vs. PPO: Understanding Plan Types

HMO (Health Maintenance Organization). You use doctors and hospitals in the plan's network, you typically choose a primary care physician, and you may need referrals to see specialists. In exchange, HMOs often have lower copays.

PPO (Preferred Provider Organization). You pay less using in-network providers but retain coverage - at higher cost-sharing - outside the network, and you generally don't need referrals. PPOs offer flexibility for people who see multiple specialists or split time between locations.

Special Needs Plans (SNPs). Plans designed for specific groups: people with both Medicare and Medicaid (Dual-Eligible Special Needs Plans) and people with certain chronic conditions (Chronic Condition Special Needs Plans). SNPs tailor their benefits, networks, and drug formularies to their members' needs and typically include care coordination.

Questions to Answer Before You Enroll

  • Are my doctors in the network?

    Check every physician you see, plus your preferred hospital. Networks can change year to year.

  • Are my prescriptions on the formulary, and at what tier?

    The same drug can cost very different amounts on different plans.

  • What is the plan's out-of-pocket maximum?

    This is your true worst-case number.

  • What are the copays for the care I actually use?

    Specialist visits, imaging, physical therapy, hospital stays.

  • Do I travel or live part of the year elsewhere?

    Emergency and urgent care are covered anywhere in the U.S., but routine care outside the network generally is not on HMO plans.

  • What do the extra benefits really cover?

    A "dental benefit" ranges from cleanings-only to significant comprehensive allowances.

This is exactly the comparison a licensed agent does for you - and using an agent costs you nothing. Plan premiums are the same whether you enroll through an agent, directly with the carrier, or through Medicare.

When You Can Enroll

You can join, switch, or drop a Medicare Advantage plan only during specific windows: your Initial Enrollment Period around your 65th birthday, the Annual Enrollment Period (October 15 – December 7), the Medicare Advantage Open Enrollment Period (January 1 – March 31, for people already on an MA plan), or a Special Enrollment Period if you qualify. See our full guide to Medicare enrollment periods.

Medicare Advantage or Medicare Supplement?

The other main route is staying on Original Medicare and adding a Medicare Supplement (Medigap) plan plus a standalone Part D drug plan. The trade-offs - networks vs. any Medicare provider, lower premiums vs. more predictable costs - are covered in depth in our comparison: Medicare Advantage vs. Medicare Supplement.

MegaCare's licensed agents compare plans from multiple carriers in your area, check your doctors and prescriptions against each plan, and help you enroll - by phone, at no cost.

Call 888-918-6920 TTY: 711, Mon-Fri 9am-6pm EST

Frequently Asked Questions

  • Can I keep my doctor with Medicare Advantage?

    If your doctor is in the plan's network, yes. Always verify before enrolling - and re-verify each fall, since networks can change annually.

  • Do I still pay my Part B premium on a $0-premium plan?

    Yes. Everyone on Medicare Advantage continues to pay the Part B premium ($202.90/month standard in 2026 ), and higher-income beneficiaries pay an income-related surcharge.

  • Will I need a referral to see a specialist?

    On most HMO plans, yes. On most PPO plans, no. Check the specific plan's rules.

  • Am I covered when I travel?

    Emergency and urgently needed care are covered anywhere in the United States on every Medicare Advantage plan. Routine care outside your plan's service area is generally not covered on HMOs; PPOs may cover out-of-network care at higher cost.

  • Are my prescriptions covered?

    Most Medicare Advantage plans include prescription drug coverage, but all plans have rules for which drugs are covered.

  • Can I switch back to Original Medicare later?

    Yes, during the Annual Enrollment Period or the Medicare Advantage Open Enrollment Period. Note that if you later want a Medigap plan, you may be subject to medical underwriting depending on your state and circumstances.

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