Advantage Plans (Medicare Part C) use private companies that contract with Medicare to provide you with Part A and B care. A capped payment is used to control the costs and incent a preventative, holistic, healthcare. However, Advantage plans currently cost Medicare more than Original Medicare does.

It is important to know how it works. This may be a 20-to-30-year decision. The primary cost control mechanism for the insurer is the medical network you can use. That includes the doctors and facilities in it, referral within and outside of it, and the claims processing.

Companies are funded by you and Medicare.

1.) You continue to pay Part B premiums ($164.90 and rising with income) unless your plan chooses to absorb it. Your plan can include Part D coverage, any other non-Part A or B service, and it can choose to charge for it or not. You can also have co-pays and coinsurance.

2.) Medicare pays $1,000 per month. However, there is also a risk adjustment for an unhealthy population and a quality bonus for patient satisfaction scores which increase it, both of which have unclear results.

In return you get Part A and B coverage, and an annual expense cap of $7,550 for in network and $11,300 for in and out of network care.

The “advantage” is the bundle and holistic approach. The drawback is, there may not be a good option later if the insurance company pricing and/or its network quality deteriorates. You can move to another Advantage plan, but the plan and network may not suit. You can switch to Original Medicare, but it may not be practical if you can’t get a Medigap policy as well. 

A broker, insurance company employee, or State Health Insurance Assistance Program (SHIP) representative can help you. (Caveat: Employees only represent their company, brokers typically offer a subset of plans and typically get paid more for Medicare Advantage plans.)