SOCIAL INSURANCE · 5 MIN READ

Medicare Advantage, Part D, and Medigap

Medicare Part C — Medicare Advantage (MA) — lets beneficiaries receive their Medicare through private plans under contract with CMS. Every MA plan must cover at least the full Part A and Part B benefit package, and unlike Original Medicare, every MA plan must have an annual out-of-pocket maximum (MOOP), a key selling point since traditional Medicare has none. Enrolling in MA does not surrender Part A or B entitlement; the beneficiary can return to Original Medicare during the AEP or MA Open Enrollment Period. CMS grades plans on a Five-Star Quality Rating System: plans rated 4 stars or higher earn a 5% Quality Bonus added to the county benchmark, and higher stars also raise the rebate percentage the plan must return as extra benefits. Special Needs Plans (SNPs) come in three types — Chronic-condition, Institutional, and Dual-eligible — and MA Medical Savings Account (MSA) plans pair a high-deductible plan with a deposit account. Part D is outpatient prescription drug coverage sold through private plans. The classic defined standard benefit moved through phases — deductible, initial coverage (25% beneficiary share up to the initial coverage limit), the coverage gap or donut hole, and a catastrophic phase with 5% coinsurance. The Inflation Reduction Act of 2022 rebuilt this: beginning in 2025 the coverage gap is eliminated and beneficiary out-of-pocket drug spending is capped at $2,000 per year, leaving deductible, initial coverage, and catastrophic phases. Low-Income Subsidy (Extra Help) reduces Part D costs for beneficiaries who pass income and asset tests, and dual eligibles are auto-enrolled. Medigap (Medicare Supplement) policies are federally standardized plans — identified by letter — that fill Original Medicare's cost-sharing gaps. Under MACRA, plans covering the Part B deductible (Plans C and F) cannot be sold to anyone newly eligible for Medicare on or after January 1, 2020; for those enrollees, Plan G is the most comprehensive option, covering essentially everything except the annual Part B deductible, including Part A and B coinsurance, the Part A deductible, Part B excess charges, and 80% of foreign travel emergencies. One rule agents must never break: selling a Medigap policy to a Medicare Advantage enrollee is a prohibited unlawful practice — Medigap pairs only with Original Medicare.