Which option correctly describes Medicare Advantage?

• A. A traditional fee-for-service plan
• B. A government-run single-payer system
• C. A managed plan with fixed payment per patient
• D. A private employer plan

Answer: (C)

Medicare Advantage is a private, managed care option within Medicare where plans receive a fixed amount to cover an enrollee’s care. This capitation approach means the plan is given a set budget per beneficiary, encouraging coordinated care, network restrictions, and preplanned services to keep costs predictable. Plans often include preventive services and may offer extra benefits beyond original Medicare.

This differs from traditional Medicare, which pays for services on a fee-for-service basis, and from a government-run single-payer system, which would be centralized and not delivered through private insurers. It also isn’t a private employer plan, since Medicare Advantage is a program available to individuals enrolled in Medicare, typically regardless of employment status.