Question: Is there really any difference between a Medicare Part D prescription drug plan and a Medicare Advantage plan?
Answer: Yes! A stand-alone Medicare Part D prescription drug plan (or PDP) only provides out-patient prescription drug coverage.
Alternatively, Medicare Advantage plans provide coverage for your
Original Medicare Part A (in-patient and
hospitalization) and Medicare Part B (out-patient and doctor visits) -
plus some Medicare Advantage plans may provide additional benefits like optical or eyeglass coverage, hearing aid coverage,
fitness coverage (such as Silver Sneakers), OTC drug coverage, and dental coverage - plus Medicare Advantage plans can include Medicare Part D
prescription drug coverage.
This means 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).
A Medicare Advantage plan (MA or MAPD) is also known as a Medicare Part C plan.
Drug Coverage and Pharmacy Participation and Healthcare Provider Networks When choosing a stand-alone PDP, potential plan members need to ensure that their medications are covered in the plan's formulary and that their local pharmacies are included in the Medicare Part D prescription drug plan network.
As can be imagined, the selection of a Medicare Advantage plan (MAPD or
MA) is more complicated than selecting a stand-alone Medicare Part D plan. When choosing a Medicare Advantage plan that includes prescriptions (MAPD), the potential plan member must also ensure that their prescriptions are covered by the plan and that their local pharmacies are part of the Part D plan network and Medicare beneficiaries must determine whether their favorite physicians or specialists and hospitals are included with the Medicare Advantage plan's healthcare network.
Requirements for Enrollment: Medicare Eligibility To enroll into a Medicare Part D prescription drug plan, you must be eligible for either Medicare Part A and/or Medicare Part B coverage. Monthly Medicare Part D premiums are paid in addition to your Medicare Part A (if any) and/or Part B premiums.
To enroll into a Medicare Advantage plan (MA or MAPD), you must have both Medicare Part A and Medicare Part B coverage. Medicare Advantage Plans are operated by private insurance carrier and compensated by the federal government. Monthly Medicare Advantage premiums are also paid in addition to your Medicare Part A and Medicare Part B premiums. As noted below, some Medicare Advantage plans have a $0 monthly premium - and a few Medicare Advantage Plans not only have a $0 premium, but you actually get a portion of your Medicare Part B premium rebated or payed-back.
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 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 than a Medicare Part D plan's service area and usually is 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 a portion of the large city. You can view all of the Medicare Advantage
plans in your area using our Medicare Advantage Plan Finder (or MA-Finder.com).
Health-related enrollment questions
There are no health-related questions when joining a stand-alone Medicare Part D prescription drug plan. In other words, a PDP is guarantee issue, no matter what your health or medical history.
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 due to your
low-income status, you are required to have the condition (or economic
need) in order to join the SNP.
Key Point: Medicare Advantage plans may have a $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 few Medicare
Advantage plans actually rebate a portion of your Medicare Part B
payment back to you (sometimes called a Dividend plan) - this means you
do not pay any monthly premium and may actually get a portion of your
Medicare Part D premium "rebated" back to you in the form of a dividend.
in some areas of the country, you may find a Medicare Advantage plan
with drug coverage that actually pays you (or returns a portion of your Part B premiums)
for your Medicare Part A, Medicare Part B, and Medicare Part D coverage.
Key Point: 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 established each
year (or MOOP).
Please note: If you have Original Medicare Part A and Medicare Part B, there is no
limit or cap to what you can pay each year for your Medicare Part A and Medicare Part B coverage. 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, or $6,700 - depending on
your chosen plan. We show the MOOP levels for all Medicare Advantage plan in our MA-Finder tool.
Key Point: The Different Network Structures of a Medicare Advantage plan
Medicare Advantage plans (MA and MAPD) can be further defined by how the private
insurance carriers choose to implement the Medicare Part A and Part B
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 some 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, and you can use any healthcare provide who accepts
the terms and conditions of the Medicare Advantage plan.
Key Point: When considering an MA, a Medicare beneficiary should be sure to learn
about these differences in plans and how the choice of a particular MA plan may
affect their health care.
History: 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 a recent (August 13, 2007) CMS Press
"[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 Blog 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]
History: 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.
Donut Hole Coverage? Although somewhat rare today with the implementation of the Donut
Hole discount, some stand-alone Medicare Part D plans or Medicare
Advantage plans still offer some form of Donut Hole (or Doughnut Hole)
coverage (for brand name and/or generic medications). We
have Donut Hole coverage details in both our PDP-Finder and MA-Finder.
The Medicare Advantage and Medicare Part D prescription drug plan data on our site comes directly from Medicare and is subject to change.
Medicare has neither reviewed nor endorsed the information on our site.
We provide our Q1Medicare.com site for educational purposes and strive to present unbiased and accurate information.
However, Q1Medicare is not intended as a substitute for your lawyer, doctor, healthcare provider, financial advisor, or pharmacist.
For more information on your Medicare coverage, please be sure to seek legal, medical, pharmaceutical, or financial advice from a licensed professional or telephone Medicare at 1-800-633-4227.
We are an independent education, research, and technology company. We are not affiliated with any Medicare plan, plan carrier, healthcare provider, or insurance company. We are not compensated for Medicare plan enrollments. We do not sell leads or share your personal information.
Benefits, formulary, pharmacy network, provider network, premium and/or co-payments/co-insurance may change on January 1 of each year.
Our PDP-Compare.com and MA-Compare.com provide highlights of annual plan benefit changes.
The benefit information provided is a brief summary, not a complete description of benefits. For more information contact the plan.
Limitations, copayments, and restrictions may apply.
We make every effort to show all available Medicare Part D or Medicare Advantage plans in your service area.
However, since our data is provided by Medicare, it is possible that this may not be a complete listing of plans available in your service
area. For a complete listing please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048),
24 hours a day/7 days a week or consult www.medicare.gov.
Medicare beneficiaries with higher incomes may be required to pay both a Medicare Part B and Medicare Part D Income Related Monthly Adjustment Amount (IRMAA). Read more on IRMAA.
Medicare Advantage plans that include prescription drug coverage (MAPDs) are considered Medicare Part D plans and members with higher incomes may be subject to the Medicare Part D Income Related Monthly Adjustment Amount (IRMAA), just as members in stand-alone Part D plans. In certain situations, you can appeal IRMAA.
You must be enrolled in both Medicare Part A and Part B to enroll in a Medicare Advantage plan. Members may enroll in a Medicare Advantage plan only during specific times of the year. Contact the Medicare plan for more information.
If you are enrolled in a Medicare plan with Part D prescription drug coverage, you may be eligible for financial Extra Help to assist with the payment of your prescription drug premiums and drug purchases. To see if you qualify for Extra Help, call: 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048, 24 hours a day/ 7 days a week or consult www.medicare.gov; the Social Security Office at 1-800-772-1213 between 7 a.m. and 7 p.m., Monday through Friday. TTY users should call, 1-800-325-0778; or your state Medicaid Office.
Medicare evaluates plans based on a 5-Star rating system. Star Ratings are calculated each year and may change from one year to the next.
A Medicare Advantage Private Fee-for-Service plan (PFFS) is not a Medicare supplement plan. Providers who do not contract with the plan are not required to see you except in an emergency.
Disclaimer for Institutional Special Needs Plan (SNP): This plan is available to anyone with Medicare who meets the Skilled Nursing Facility (SNF) level of care and resides in a nursing home.
Disclaimer for Dual Eligible (Medicare/Medicaid) Special Needs Plan (SNP): This plan is available to anyone who has both Medical Assistance from the State and Medicare.
Premiums, co-pays, co-insurance, and deductibles may vary based on the level of Extra Help you receive. Please contact the plan for further details.
Disclaimer for Chronic Condition Special Needs Plan (SNP): This plan is available to anyone with Medicare who has been diagnosed with the plan specific Chronic Condition.
Medicare MSA Plans combine a high deductible Medicare Advantage Plan and a trust or custodial savings account (as defined and/or approved by the IRS). The plan deposits
money from Medicare into the account. You can use this money to pay for your health care costs, but only Medicare-covered expenses count toward your deductible.
The amount deposited is usually less than your deductible amount, so you generally have to pay out-of-pocket before your coverage begins.
Medicare MSA Plans do not cover prescription drugs. If you join a Medicare MSA Plan, you can also join any separate (stand-alone) Medicare Part D prescription drug plan
There are additional restrictions to join an MSA plan, and enrollment is generally for a full calendar year unless you meet certain exceptions. Those who disenroll
during the calendar year will owe a portion of the account deposit back to the plan. Contact the plan provider for additional information.
Medicare beneficiaries may enroll through the CMS Medicare Online Enrollment Center located at www.medicare.gov.
Medicare beneficiaries can file a complaint with the Centers for Medicare & Medicaid Services by calling 1-800-MEDICARE 24 hours a day/7 days or using the
Beneficiaries can appoint a representative by submitting CMS Form-1696.