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Medicare Advantage Explained

Medicare can give Americans that are turning 65 much-needed health coverage. But dealing with different parts of Medicare can be overwhelming. Those who want to simplify their health coverage may consider signing up for Medicare Advantage, also known as Medicare Part C.

Medicare Advantage is also known as Part C of Medicare. It is administered by private insurance companies certified by Medicare. If you choose to join a Medicare Advantage Plan, it will provide all of your Part A and Part B coverage. Part C may offer extra coverage, such as vision, hearing, dental, and health and wellness programs. Most Medicare Advantage plans include Medicare prescription drug coverage, known as Part D.

Medicare pays a fixed amount for your care every month to the companies offering Medicare Advantage Plans. These companies must follow rules set by Medicare. However, each Medicare Advantage Plan can charge different out-of-pocket costs and have different rules for how you get services.

To learn more if an MA Plan is right for you, let’s look at the advantages and disadvantages of Medicare Advantage Plans.

Advantages of Medicare Advantage Plans

  • Prescription Drug Coverage: Many Medicare Part C plans provide prescription drug coverage, in addition to several supplemental benefits. You are required by Medicare to have some kind of prescription drug coverage, and through a MA plan, you can get a prescription drug plan.

  • Additional Coverage: It is a must for a MA plan to provide at least the same level of coverage offered by Original Medicare. However, most of the MA plans also provide added benefits. The plans may include coverage for dental care, hearing care, meal benefits, fitness, in-home support, vision care, and transportation assistance.

  • Out-Of-Pocket Spending Limits: Medicare Part C has an out-of-pocket spending limit, which is a yearly cap on the amount you’ll pay in out-of-pocket expenses. So, once you have spent the maximum, you won’t have to pay for any Medicare-covered services for the rest of the calendar year.

  • Coordinated Care: Generally, Medicare Part C plans have networks of healthcare providers. For instance, HMO Medicare Advantage plans require the member to choose a Primary Care Physician (PCP) to help coordinate their care. Moreover, some of the MA plans that cover prescription drugs also offer medication therapy management.

Disadvantages of Medicare Advantage Plans

  • Supplemental Coverage Not Available: The people with Original Medicare can purchase a supplement insurance policy called Medicare Supplement. This plan helps with the reduction of out-of-pocket costs by covering copayments, coinsurances, and deductibles. However, if you have a Medicare Advantage plan, you cannot purchase a Medicare Supplement.
  • Strict Coverage Rules: Some Medicare Part C plans don’t allow its members to receive healthcare outside of the providers’ network unless it is an emergency. Other Medicare Advantage plans like the PPO allow its members to seek care outside of the network but charge higher prices for it.
  • You May Lose Your Coverage If You Move Out of the Provider Network: Some Medicare Advantage Plans are not available in every area. If you move to an area not covered by your provider, you may need to enroll in a different Medicare Advantage Plan or switch back to Original Medicare.

Medicare Advantage Plans


Medicare Advantage Health Management Organization (HMO) Plans ask that you receive care from health providers in the plan’s network, except for emergency care, out-of-area urgent care, and out-of-area dialysis. Plans with a point-of-service option may allow you to go out-of-network for some services, but you will pay more if your provider is not in-network. You need to choose a primary care provider for HMO plans, and you will need a referral to see a specialist.


Medicare Advantage Preferred Provider Organization (PPO) Plans have networks of doctors, healthcare providers, and hospitals. If you go to a provider that does not belong to the network, you will pay more. You do not need a primary care provider with a PPO Plan and do not usually need a referral to see a specialist. Costs will be lower for in-network specialists than for out-of-network specialists, as with all other providers under PPO Plans.


Private Fee-for-Service Plans operate differently than HMOs and PPOs. PFFS Plans contract with a network of providers that agree to always treat plan members. You can see any of the providers in the network or visit an out-of-network doctor, hospital, or provider that accepts the plan’s terms. The provider can decide whether to accept your plan’s terms and conditions of payment at each visit, but providers must treat you in an emergency. You do not need a primary care provider with a PFFS Plan, and you do not need referrals to see a specialist. Costs are lower if you stay in-network.


Medicare Advantage Special Needs Plans (SNP) are available for those with specific diseases or characteristics. This includes people who live in institutions or have home nursing care, people who are dual-eligible for Medicare and Medicaid, or people who have specific chronic or disabling conditions such as diabetes, End-Stage Renal Disease, HIV/AIDS, chronic heart failure, or dementia. These plans limit their membership based on the above qualifications and tailor their benefits, provider choices, and drug formularies to meet the needs of the group of people they serve. You must get your care from healthcare providers in the network unless it is an emergency or for out-of-area dialysis of End-Stage Renal Disease patients. SNPs have specialists in the diseases or conditions affecting their members. You may have to have a primary care doctor or a care coordinator, and you will have to get a referral to see a specialist.


Medicare Medical Savings Account (MSA) Plans are similar to Health Savings Account Plans. They combine a high-deductible health insurance plan with a medical savings account to pay healthcare costs. The Medical Savings Account deposits money into your account to pay for health care costs until you reach the deductible, at which point the high-deductible health plan will cover your costs.

Medicare Part C Costs

There is a wide range of plan costs. Many people choose low-cost or free plans, and $0 Medicare Part C plans are available in 49 states. On the other side, some plans can cost several hundred dollars per month. Expensive plans usually provide better benefits such as a broader network of medical providers, more coverage for specialized care or better cost-sharing benefits.

Medicare Part C costs are determined by several factors, such as premiums, deductibles, copayments, and coinsurance. These amounts can range from $0 to hundreds of dollars for monthly premiums and yearly deductibles. But most of your Part C costs will be determined by chosen plan. Here below are some of the most common factors affecting Part C plan cost:

  • Premiums: Some Medicare Part C plans are free, meaning they don’t have a monthly premium. But even if it is $0 premium, you may still owe the Part B premium.
  • Deductibles: Most Medicare Part C plans have both a plan deductible and a drug deductible. Some of the free Medicare Advantage plans offer a $0 plan deductible.
  • Copayments and coinsurance: Copayments are amounts you will owe for every doctor’s visit or prescription drug refill. Coinsurance amounts are any percentage of services you must pay out of pocket after your deductible has been met.
  • Plan type: The type of plan you choose can also have an impact on how much your Part C plan may cost.
  • Out-of-pocket maximum: One advantage of Medicare Part C is that all plans have an out-of-pocket maximum.
  • Lifestyle: Most Medicare Advantage plans are location-based because they depends on provider`s network. This means that if you travel often, you may find yourself stuck with out-of-town medical bills.
  • Income: Your yearly gross income can also factor into how much you will pay for your Medicare Part C costs.


Under a Part C Plan, you still have to pay your Part B monthly premium. Your part C costs differ based on your plan, which is usually an HMO, PPO, or PFFS plan. These costs include the plan’s monthly premium, deductible, copayments at the time of service, and coinsurance. The highest amount you pay for any service is 20%, whether that be a copayment or coinsurance.

The maximum out-of-pocket (OOP) cost for Parts A and B spending is $7,550 in 2022. HMO and PPO plans have their maximum out-of-pocket set to $7,550 for in-network care. However, PPO plans also include out-of-network in their policy. For in-network and out-of-network combined, the maximum out-of-pocket is $11,300. Spending toward Part D, prescription drug coverage, does not count toward this amount.

However, keep in mind that these dollar amounts are the highest limits the plans can impose. Each plan and insurer are different, meaning they are free to choose their own out-of-pocket limits as long as it does not go over these maximum amounts.

Original Medicare, meaning Part A and Part B coverage directly from Medicare, does not have an out-of-pocket maximum. The advantage of Medicare Advantage plans is that your plan will cover any remaining costs once you reach the maximum for the year.

Why a limit?

The purpose of an out-of-pocket maximum is to set a certain limit for your out-of-pocket costs. Once you reach that limit, your Medicare Advantage Plan will begin paying 100% of your medical expenses for the remainder of the year.

If you are considering a Medicare Advantage Plan, the plan you choose is obviously up to your own needs and wants. However, be aware of all your options. Would you rather have a lower out-of-pocket cost for a higher premium or vice versa?

At Turning 65 Solutions, we will answer your questions and give you all options available in your area. Contact us today to discuss your options with Medicare Advantage.

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