Should I Consider a Medicare Advantage Prescription Drug Plan (MAPD)?

• by Zia Sherrell, MPH
• January 12, 2024
• Reviewed by John Krahnert

Medicare Advantage Prescription Drug (MAPD) plans offer an alternative way for eligible beneficiaries to receive their Medicare benefits. These bundled, convenient plans also include coverage for prescription medications.

If you're considering joining the over 30.8 million people already enrolled in a Medicare Advantage plan, continue reading to find out if an MAPD plan is right for you.

What is a Medicare Advantage Prescription Drug plan?

A Medicare Advantage Prescription Drug plan ­– or MAPD – is a Medicare Advantage plan that includes Medicare Part D coverage for prescribed medications.

Private health insurance companies sell Medicare Advantage policies, which typically offer benefits beyond that of Original Medicare. Most, but not all, Medicare Advantage plans also include prescription drug coverage. These plans are called MAPD plans.

Examples of some of the benefits some Medicare Advantage plans may offer can include medications and/or gym membership, wellness programs, vision or dental care, though these benefits are not available with all plans in all locations.

Some MA plans even provide coverage for alternative therapies, meal delivery and transportation services, though these benefits may not be available where you live and are typically offered to beneficiaries who also have Medicaid or who have a qualifying chronic health condition.

What is a Medicare Part D plan?

Medicare beneficiaries can receive prescription drug coverage either through a stand-alone Part D plan (used alongside Original Medicare) or through a bundled MAPD plan.

Like MA plans, Part D plans are sold by private insurance companies. These plans

Medicare Part D plans and MAPD plans use a drug list called a formulary that outlines the covered prescription drugs for that plan.

The formulary typically organizes medicines into pricing levels called “tiers,” with tier 1 generic drugs typically being the least costly. The amount you pay for medication depends on the level of coverage your drug falls under with your plan.  Formularies differ between plans and between the insurance providers.

It's essential that before enrolling in any MAPD – or in an independent Part D plan – you review the formulary to make sure that your prescription medications are included.

What are the types of MAPD plans?

There are various types of MAPD plans available. Depending on your location, the types of plans that may be available can typically include:

• Health Maintenance Organization (HMO) plans – These plans typically use a specified provider network you can visit for covered services. Care you receive out of your plan network may not be covered at all. If you receive out-of-network care that is covered by your plan, you will typically pay higher out-of-pocket costs than if you visit an provider in your plan network.
  
  
• Preferred Provider Organization (PPO) plans ­– These plans will pay for covered services received outside of the provider network, but they will be less expensive if you stay within the network. Because these plans are less restrictive than an HMO plan, premium costs are typically higher.
  
  
• Private Fee-for-Service (PFFS) plans – A PFFS plan can provide greater flexibility, as you aren’t required to select a primary care physician and you are typically not restricted to a provider network for your covered care. The providers you see must participate in Medicare and must accept your PFFS plan’s terms and conditions.
  
  
• Special Needs Plans (SNPs) – ­­These plans can provide tailored care for those with specific chronic medical conditions, people with Medicaid or care home residents.

What do Medicare Advantage Prescription Drug Plan premiums cost?

If you've been exploring MA plans, you may have noticed that there can be considerable price variation from one plan to another. Some companies may offer plans with $0 premiums, whereas other plan premiums could cost more than $100.

In 2024, the average monthly premium for an MA plan is $13.24 per month.

A $0 monthly premium may seem like an impossible bargain at first glance. However, with many Medicare Advantage plans, you must continue to pay the premiums for Original Medicare.

• Most people do not pay a premium for Medicare Part A, providing they have paid enough Medicare taxes during their working life.
  
  
• The standard Part B monthly premium is $174.70 per month in 2024.

Are there other Medicare Advantage costs?

Aside from the cost of the Original Medicare premiums and MA plan premium, there are also out-of-pocket expenses often associated with MAPD plans. These costs can include deductibles and coinsurance or copayments.

Deductibles

A deductible is the amount of money the beneficiary must pay for covered health care services before their Medicare Advantage plan begins to pay.

For most health care services, you'll pay the full cost until the deductible is paid. After this, you will then pay either coinsurance or a copayment.

Many MAPD plans may have two deductibles. One deductible is for general health care costs and a second for Part D prescription drug coverage, which cannot exceed $545 per year in 2024. However, some plans may offer a $0 medical deductible and/or a $0 drug deductible.

Coinsurance

A coinsurance cost is a percentage cost of a health care service. For example, Medicare Part B charges a 20% coinsurance for most covered services after you meet your Part B deductible.

Copayment

MA plans may charge a set amount for a covered health care service or drugs, which is called a copay. For example, generic drugs may have a $5 copay, whereas brand-name drugs may have a $25 copay.

Unlike Original Medicare, Medicare Advantage plans typically have a specified maximum out-of-pocket (MOOP) spending limit for the year for Part A and Part B services. This limits how much you will have to contribute to your health care costs each year.

All Medicare Advnatage plans must offer an out-of-pocket spending limit of $8,850 or less in 2024, though insurance companies often offer plans with lower limit amounts. The average MOOP is $5,513.99 in 2024.

The exact costs you will pay may depend on your individual MA plan, your benefits and if you use an in-network provider.

What is the Medicare donut hole?

Some Medicare Advantage Prescription Drug Plans have what is known as a “donut hole” or “coverage gap,” which is a temporary limit on how much the drug plan will pay for prescription drug costs.

Generally, once you and your drug plan spend more than $5,030 (in 2024) in a single year on prescription drugs, you enter the coverage gap. While you are in the coverage gap, you are responsible for paying no more than 25% for covered drugs until you reach $8,000.

Once you’ve spent $8,000 (including payments made by other entities including the Medicare Extra Help program) on prescription drugs in 2024, you will leave the donut hole and enter catastrophic coverage. Once in the catastrophic coverage phase, you won't be required to pay a copay or coinsurance for covered drugs for the remainder of the calendar year.

Is an MAPD plan right for me?

Original Medicare coverage is limited to hospital and medical services. By choosing a Medicare Advantage Prescription Drug plan, your medications may also be covered, plus some plans may offer a range of other benefits. An MADP plan can provide the convenience of “all-in-one” coverage and the reassurance that your out-of-pocket health care spending is limited.

Your choice of health care providers could be more limited with some Medicare Advantage plans than with Original Medicare. If you are considering an MAPD plan, it's worth taking time to compare the coverage details for each of the available plans in your area. An MAPD plan may offer more affordable coverage than Original Medicare, but more rules to follow.

Find MAPD plans in your area

A licensed insurance agent can help you find Medicare Advantage Prescription Drug Plans in your area and help you enroll in a plan that works for you.

Not all plans are offered in all locations, and some carriers may not provide an MAPD plan where you live. A licensed agent can help you review the availability, costs and benefits of Medicare plans in your area.

We represent carriers such as Humana, UnitedHealthcare^®, Anthem Blue Cross and Blue Shield, Aetna, Cigna Healthcare, Wellcare, or Kaiser Permanente.

About the author

Zia Sherrell is a digital health journalist with over a decade of healthcare experience, a bachelor’s degree in science from the University of Leeds and a master’s degree in public health from the University of Manchester. Her work has appeared in Netdoctor, Medical News Today, Healthline, Business Insider, Cosmopolitan, Yahoo, Harper's Bazaar, Men's Health and more.

When she’s not typing madly, Zia enjoys traveling and chasing after her dogs.

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