Basically, Medicare pays an amount of money for your health care into these private Medicare Advantage plans every month. In return, these plans must provide all of your Part A and Part B benefits, and they must cover at least all of the medically necessary services that the original Medicare plan provides.

MA plans can charge different co-payments, co-insurance and deductibles for their services and generally have set provider networks. This means you likely will be limited to seeing only doctors who belong to the plan, going to certain hospitals for covered services and getting referrals to see specialists. If you use providers who aren't in the network, you may have to pay the entire cost of the services rendered. However, MA plans can offer extra benefits, such as vision, hearing, dental and health and wellness programs. Most include Medicare prescription drug coverage (usually for an extra cost).

Retirees can choose from five different types of Medicare Advantage plans. Most function like HMOs with specific networks of doctors. Other plans, such as Private Fee-for-Service plans, known as PFFS, allow you to go to any doctor if the doctor agrees to accept the plan's terms of payment before treating you. Medicare Special Needs plans, or SNPs, serve certain people who are chronically ill, live in institutions such as nursing homes or have other special needs. (The different benefits the various types of Medicare Advantage plans offer are outlined on pages 42-44 of the "Medicare & You 2008" handbook.)

It's important to call any plan before joining to find out what your services will cost and make sure that a plan will meet your needs. Some plans, for example, will let you use out-of-network providers (sometimes for a higher cost). Also, be sure to check in advance with your doctors or hospital to determine if they accept the plan. To enroll in a Medicare Advantage plan, you can complete a paper application, call the plan by telephone or enroll online. Be aware that there are limitations as to when you can join, switch or drop a Medicare Advantage plan.

Remember, when you join a Medicare Advantage plan, you will have to provide your Medicare number from your Medicare card and the date your Part A and Part B coverage started. You also will generally still pay the monthly Part B premium along with the Medicare Advantage plan's premium (if it charges one). That includes coverage for Part A and Part B benefits, prescription drug coverage (Part D, if offered) and any other extra benefits.