Stand-alone Medicare Part D prescription drug plans (or PDPs) only provide prescription drug coverage.

Alternatively, Medicare Advantage plans provide coverage of your Medicare Part A (in-patient and hospitalization) and Medicare Part B (out-patient and doctor visits) - plus usually some additional benefits like optical, hearing aid, fitness, and dental - and Medicare Advantage plans can include prescription drug coverage so Medicare Advantage plans can be separated into two general groups:

(1) Medicare Advantage plans with prescription drug coverage (MAPDs) and
(2) Medicare Advantage plans without prescription drug coverage (MAs).

As noted, if you have a MAPD, then your Medicare Advantage plan also covers Medicare Part D prescription drugs along with your Medicare Part A and Part B coverage.

A Medicare Advantage plan is also known as Medicare Part C.

Medicare Eligibility and joining Medicare Part D or Medicare Advantage plans

You must have either Medicare Part A and/or Medicare Part B to be eligible for a Medicare Part D prescription drug plan.  Medicare Part D monthly premiums are paid in addition to your Medicare Part A (if any) and/or Part B premiums.

On the other hand, you must be enrolled in both Medicare Part A and Medicare Part B to get into a Medicare Advantage plan. Your Medicare Advantage plan monthly premiums (if any) are in addition to your Medicare A (if required) and Medicare B premiums.

Joining a Medicare plan in your Service Area

The only location-related requirement for joining a Medicare Part D or Medicare Advantage plan is that you need to live in (or be a permanent resident of) the Medicare plan's service area.

A Medicare Part D plan's service area is either a state or multi-state region (for example, both Pennsylvania and West Virginia are in the same CMS Region 6 and both states offer the same stand-alone Medicare Part D plans).  You can view all of the stand-alone Medicare Part D plans in your area using our PDP-Finder tool: PDP-Finder.com (begin by choosing your state abbreviation).

Here is an example link showing all Medicare Part D plans in Florida: PDP-Finder.com/FL

A Medicare Advantage plan's service area is much smaller and usually a ZIP Code region or county.  In some very populated areas (such as Los Angeles or New York City), a Medicare Advantage plan's service area may be only a part of a city.  You can view all of the Medicare Advantage plans in your area using our Medicare Advantage Plan Finder (or MA-Finder.com).

As an example, here are all the counties in Florida with links to the available Medicare Advantage plans: https://MA-Finder.com/FL

If you are using our online Medicare Advantage plan search tool at MA-Finder.com - just enter your ZIP and "Click to Find Plans".  Here is an example of all of the 2020 Medicare Advantage plans in Summit County, Ohio using the ZIP 44319: https://MA-Finder.com/44319

Health-related enrollment questions

There are no health-related questions when joining a stand-alone Medicare Part D prescription drug plan.

Starting in 2021, there are also no health-related questions when enrolling into a Medicare Advantage plan. (Before 2021, the only Medicare Advantage plan health-related question is whether you suffer from End Stage Renal Disease (ESRD) or kidney failure.)

However, if you are trying to join a Medicare Advantage Special Needs Plan (SNP) for a specific chronic health condition (such as Diabetes) or your low-income status, you are required to have the condition (or economic need) in order to join the plan.

Medicare Advantage plans with $0 premiums or a $0 premium and Medicare Part B rebate

Like the Medicare Part D prescription drug plans, the Medicare Advantage plans are administered by private insurance carrier and compensated partially by the Federal Government.

Because of low region medical costs, some Medicare Advantage plans do not charge a monthly premium (or have a $0 premium) and a some Medicare Advantage plans actually rebate or "give back"  a portion of your Medicare Part B payment (sometimes called a Dividend plan) - this means you do not pay any monthly premium ($0 premium) and may actually get a portion of your Medicare Part D premium "rebated" back to you in the form of a dividend.

A Maximum Limit on your Medical Spending

One of the biggest benefits of a Medicare Advantage plan is that there is a limit to your out-of pocket medical spending that is set each year (or MOOP).

If you have Original Medicare Part A and Medicare Part B, there is no limit or cap to what you can pay each year, if you have very high medical expenses, you could have very high costs.

However, with your Maximum out-of-pocket limit (MOOP), your private Medicare Advantage plan will limit your potential Medicare spending each year to some level such as $3,400, $5,000, $6,700, or $7,550 - depending on your chosen plan.

The Different Structures of a Medicare Advantage plan

Medicare Advantage plans can be further defined by how the private insurance carriers choose to implement the Medicare Part A and Part B coverage.

Some Medicare Advantage plans are PPOs (Preferred Provider Organizations) - other MAs are organized as HMOs
(Health Management Organizations) - and still other MAs are set up as PFFSs (Private Fee for Service Organizations).

A number of key differences exist between the organization of a PPO, HMO, and PFFS.  All three have distinct advantages and disadvantages.

• HMOs (Health Management Organizations) - try to keep costs down by having a more restrictive health care provider network (meaning you will pay more when going outside the network).
  
  
• HMO-POS (an HMO Point of Service) - this HMO has a more flexible network structure, allowing HMO members to use providers outside of the network (usually at a higher cost) and may not count the out-of-network costs toward the member's MOOP (or Maximum out-of-pocket limit - see below).
  
  
• PPOs (Preferred Provider Organizations) - have a more flexible healthcare provider network and usually have in-network and out-of-network costs sharing.
  
  
• PFFS (Private Fee for Service Organizations) - have no established network (but may be a part of an established network that accepts the PFFS plan), and you can use any healthcare provide who accepts the terms and conditions of the Medicare Advantage plan.
  

When considering a MA, a Medicare beneficiary should be sure to learn about these differences and how the choice of a particular MA plan may affect their health care.

The Private Market and Medicare Advantage Plans

From a very general perspective, Medicare Part D plans and Medicare Advantage plans were both introduced to take advantage of the competitive forces existing in a private market to help control the medical expenses.  As noted in an older (August 13, 2007) CMS Press Release:

"[M]any beneficiaries have access to a Medicare Advantage plan with lower prescription drug premiums. It will be important for beneficiaries to compare their coverage options for 2008 based on overall cost, coverage, and convenience in order to select the plan that best meets their needs.  MA-PD premiums continue to be lower than PDP premiums. On average, in 2007, the MA-PD premiums prior to rebates are about $7 lower than those for PDPs. In 2008, they will average $11 lower. The lower MA-PD bids and premiums reflect the effects of aggressive competition as well as lower costs resulting from better care coordination and drug benefit management techniques. In practice, many MA-PD plans also apply a portion of their rebates from Parts A and B to reduce their Part D premiums, in many cases to zero." (CMS Press Release 08/13/2007)  The entire CMS Press Release can be found as part of our news articles here.

An August 2015 Commonwealth Fund study entitled "Competition Among Medicare’s Private Health Plans: Does It Really Exist?", seriously question whether enough Medicare Advantage plans are offered to provide for a competitive environment.  The study notes in its summary:

"Using a standard measure of market competition, our analysis finds that 97 percent of markets in U.S. counties are highly concentrated and therefore lacking in significant MA plan competition. Competition is considerably lower in rural counties than in urban ones. Even among the 100 counties with the greatest numbers of Medicare beneficiaries, 81 percent do not have competitive MA markets. Market power is concentrated among three nationwide insurance organizations in nearly two-thirds of those 100 counties." [emphasis added]

(source: http://www.commonwealthfund.org/publications/issue-briefs/2015/aug/competition-medicare-private-plans-does-it-exist)

Marketing Compliance and the Medicare Advantage Plan

On another note, as some Q1Medicare site visitors have noticed, back in 2007, PFFS Medicare Advantage plans received a great deal of press due to allegations of unethical marketing activities.  You can read more about that here: Plans Suspend PFFS Marketing; Plans adopt strict guidelines in response to deceptive marketing practices.  Since this time, Medicare has increased enforcement and oversight of Medicare plans and such marketing practices are more limited today.

Additional or Supplemental Donut Hole Coverage?

Although somewhat rare today with the implementation of the 75% Donut Hole discount, some stand-alone Medicare Part D plans or Medicare Advantage plans still offer some form of  supplemental Donut Hole (or Doughnut Hole) coverage (for either or both brand name and generic medications).  We have Donut Hole coverage details in both our PDP-Finder and MA-Finder.