Illinois Health Insurance Practice Exam

In a Medicare Advantage Plan, what does Medicare pay for?

1. Part A costs only

2. Part B costs only

3. Part A and B costs to the healthcare provider

4. Part A and B costs to the insurance company

The correct answer is: Part A and B costs to the insurance company

In a Medicare Advantage Plan, Medicare pays for both Part A and Part B costs to the healthcare provider. This plan is designed to provide an alternative way for beneficiaries to receive their Medicare benefits through private health insurance companies. When an individual enrolls in a Medicare Advantage Plan, that plan becomes the primary health insurance, and Medicare contracts with the plan to cover the costs for services provided under both Part A (hospital insurance) and Part B (medical insurance). The payment structure involves Medicare reimbursing the insurance company for these services, which allows the beneficiary to receive comprehensive coverage, usually combining hospital, medical, and often additional benefits like vision and dental services, all under one plan. Thus, it is crucial to understand that the correct answer encompasses the costs associated with both components of Medicare as they pertain to services rendered by healthcare providers, not the insurance company itself.