Medicare Advantage

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Definition: Medicare Advantage

A program for health insurance of managed health care (preferred provider organization (PPO) or health maintenance organization (HMO)) that serves as an alternative for "Original Medicare" Parts A and B Medicare benefits in the United States.

Medicare Part A provides instalments for in-hospital patient services, except those of surgeons and physicians. Part B ensures payments to both physicians and surgeons, along-with the important and necessary out-hospital patient services (for example ER, X-rays and diagnostic tests) along-with certain specific medical, durables, equipment and supplies. The real or original medicare claims payments are executed through the centres for Medicare and Medicaid Services ("CMS"). Whereas, Medicare Advantage is normally provided by commercial insurance companies, who receive compensation grants from the central government, to provide all Part A and B benefits to all the people who have enrolled, but they are not into processing claims through the CMS.

Many Medicare Advantage plans (commonly known as "Part C") comprise of Part D prescription drug benefit plan, and are called as a Medicare Advantage Prescription Drug plan or "MAPD." The central government makes different payments to plans for providing Part D benefits.

For those people who have enrolled in a Medicare Advantage plan, Medicare will be paying the private health plan definite sum each month for every member ("capitation"). Medicare is used to pay plans using a bidding technique, and plans deposit “bids” which is based on forecasted costs per person who enrolled for the services which are come inside Medicare Part A and B; all those bids that reach the necessary standards are accepted.


Hence, this concludes the definition of Medicare Advantage along with its overview.

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