<P> Most but not all Medicare Advantage plans (and many of the other public managed - care health plans within Medicare Part C) include integrated self - administered drug coverage similar to the standalone Part D prescription drug benefit plan . The federal government makes separate capitated - fee payments to Medicare Advantage plans for providing these Part - D - like benefits if applicable just as it does for anyone on Original Medicare using Part D . </P> <P> Nearly all Medicare beneficiaries (99%) had access to at least one Medicare Advantage plan; the average beneficiary had access to 18 plans in 2015 . </P> <P> In the 1970s, less than a decade after the beginning of fee for service Medicare, Medicare beneficiaries gained the option to receive their Medicare benefits through managed, capitated health plans, mainly HMOs, as an alternative to FFS Original Medicare, but only under random Medicare demonstration programs . The Balanced Budget Act of 1997 formalized the demonstration programs into Medicare Part C, introduced the term Medicare + Choice as a pseudo-brand for this option . Initially, fewer insurers participated than expected, leading to little competition . In a 2003 law, the capitated - fee benchmark / bidding process was changed effective in 2005 to increase insurer participation, but also increasing the costs per person of the program . </P> <P> The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 renamed + Choice "Medicare Advantage". Other managed Medicare plans include (non-capitated) COST plans, dual - eligible (Medicare / Medicaid) plans and PACE plans (which try to keep seniors that need custodial care in their homes). However 97% of the beneficiaries in Part C are in one of the roughly one dozen types of Medicare Advantage plans (HMO, EGWP, SNP, regional PPO, etc .), primarily in classic vanilla HMOs . </P>

Medicare plus choice plan is also known as