Medicare Advantage health insurance: how it works and what to compare

Every Medicare Advantage plan is legally required to cover at least the same services as Original Medicare Part A and Part B. Most plans also include Part D prescription drug coverage (Medicare drug benefits) and extras such as dental, vision, or hearing benefits that Original Medicare does not cover. Those supplemental benefits vary by plan and are not guaranteed across all plans.

You still pay the standard Part B premium while enrolled in Medicare Advantage. In 2026, the standard Part B premium is $202.90 per month. The plan itself may charge an additional premium, or it may charge $0 above the Part B premium; availability of $0-premium plans is common but market-dependent.

Medicare Advantage uses a different cost structure than Original Medicare. Rather than an uncapped 20% coinsurance on outpatient services, Advantage plans use copayments and coinsurance that vary by service, all subject to a federal maximum out-of-pocket limit (MOOP, the most you pay in a year before the plan covers 100%).

In 2026, the federal in-network MOOP cap is $9,250. Plans may set lower limits. The combined in-network and out-of-network MOOP cap is $13,900. According to KFF, the 2026 enrollment-weighted average in-network MOOP is $5,421, meaning many enrollees are in plans with limits below the federal ceiling.

Key cost categories to compare across plans:

The Part D out-of-pocket cap of $2,100 in 2026 applies to covered drugs under any plan that includes drug coverage. There is no longer a coverage gap (donut hole) under the Inflation Reduction Act changes.

Medicare Advantage plans come in several structural types. The most common are:

HMO (Health Maintenance Organization): You generally must use in-network providers and get a referral from a primary care physician to see a specialist. Out-of-network care is typically not covered except in emergencies.

PPO (Preferred Provider Organization): You can see out-of-network providers, but at a higher cost. Referrals are usually not required.

PFFS (Private Fee-for-Service): The plan sets its own payment terms; providers must agree to them each time.

SNP (Special Needs Plan): Restricted to people who meet specific qualifying criteria related to a chronic condition, dual Medicare-Medicaid eligibility, or institutional care needs. Criteria are program-defined and vary by SNP type.

Network rules matter because using an out-of-network provider can expose you to much higher costs, up to the combined MOOP of $13,900 in 2026. Confirming that your doctors and preferred hospital participate in a plan's network before enrolling is one of the most consequential steps in the comparison process.

Medicare Advantage plans may require prior authorization, meaning the plan must approve certain services or drugs before you receive them. Under CMS rule CMS-0057-F, which took full effect January 1, 2026, standard prior-authorization decisions must be issued within 7 calendar days. Expedited decisions, for cases where waiting could seriously harm your health, must come within 72 hours, and any denial must include a specific reason.

If a plan denies coverage, you have the right to appeal. The appeals process has multiple levels, including an independent review by an organization outside the plan. Keeping records of authorization requests and denial notices supports a stronger appeal.

Several enrollment windows govern Medicare Advantage:

Initial Enrollment Period (IEP): A 7-month window centered on your 65th birthday: the 3 months before your birthday month, your birthday month, and the 3 months after. This is when most people first choose Original Medicare or Medicare Advantage.

Annual Enrollment Period (AEP): Runs October 15 to December 7 each year. During AEP you can join, switch, or drop a Medicare Advantage or Part D plan for coverage beginning January 1.

Medicare Advantage Open Enrollment Period (OEP): Runs January 1 to March 31 for people already enrolled in a Medicare Advantage plan. You can switch to a different Advantage plan or return to Original Medicare plus a standalone Part D plan.

Special Enrollment Periods (SEPs) exist for qualifying life events such as moving out of a plan's service area, losing employer coverage, or qualifying for a low-income subsidy program. SEP rules are specific to the triggering event.

One planning note: if you enroll in Medicare Advantage and later want to switch to Original Medicare with a Medigap (Medicare Supplement) policy, guaranteed-issue access to Medigap is limited outside of the initial 6-month Medigap open enrollment window. In most states, insurers can use medical underwriting after that window closes. Some states offer additional protections, including year-round guaranteed issue (New York and Connecticut), plan-to-plan switching rights (Washington), and birthday-rule states such as California and Oregon, among others.

To find out more about coverage options available where you live, please contact us to discuss plan options.