What Is Medicare Advantage?

A son and his elderly mom reading some information on what is Medicare AdvantageMedicare Advantage is a health insurance program of managed care that works as a substitute for Medicare A and B benefits. In contrast to original Medicare, payments from Medicare Advantage claims are made through the Centers for Medicare and Medicaid Services. Medicare Advantage is offered by commercial insurance companies as well as HMO and PPO corporations. These corporations in turn are compensated by the federal government.

Most plans from Medicare Advantage(or “Medicare C”) include the Part D prescription drug benefit plan. This is called a Medicare Advantage Prescription Drug plan (MAPD).

Medicare Advantage traces its origins to the Balanced Budget Act of 1997. This piece of legislation first offered Medicare beneficiaries this option, as an alternative to receiving benefits through the original plan. It was originally known as “Medicare+Choice“, but the name was changed to Medicare Advantage as a result of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which made alterations to the compensation and business practices of insurers that offer these plans.

Impact of the Affordable Care Act (Obamacare)

As part of the health care reforms targeted at keeping Medicare costs under control, the Affordable Care Act eliminated some Medicare Advantage subsidies initially used by the government. However, the Obama administration has put in place an $8.35 billion demonstration project designed to postpone the majority of Medicare Advantage cuts. This demonstration project will reportedly cost more than the combined previous 85 demonstration projects, dating back to 1995. As of 2008, the federal government had spent 12 percent more on Medicare Advantage than for similar care under traditional Medicare. These subsidies are expected to gradually be reduced, with the eventual goal that payments to Medicare Advantage will be closer to the cost of traditional Medicare.

For more information on Medicare Advantage plans offered through HealthPlanOne-affiliated providers, click here:

Medicare Part C

Medicare Advantage Plans

Prescription Drug Coverage