What is the Difference Between Medicare Part B and Part C?

by David Bynon, last updated

Medicare is a federal health insurance program that covers millions of Americans. Four parts, A, B, C, and D provide different coverage options.

This article will examine the differences between Medicare Part B and Medicare Part C in the context of Original Medicare vs. Medicare Advantage plans. At the same time, we’ll explore how Part C of Medicare compares to Original Medicare and Medicare Supplement insurance.

Key Takeaways

  • Medicare Part B is the medical insurance component of Original Medicare. It works with Part A (hospital insurance) to cover medically necessary healthcare services.
  • Medicare Part C is the same thing as Medicare Advantage. It is a private health insurance option for people on Medicare.
  • You must have both Part A and Part B benefits to enroll in a Medicare Part C plan (Medicare Advantage).
  • Most Medicare Advantage plans include Part D benefits for prescription drug coverage.
  • Costs with a Medicare Advantage plan differ from those in Medicare Part A and Part B.  In some cases, you may pay more or less.
  • Medicare Part C is good to have for some people, but not for others. It’s important to understand what Medicare Part C is and how it works before you decide to join a plan.

Original Medicare Parts Explained

Original Medicare coverage, also called traditional Medicare, has two parts, A and B. In this section, we’ll go over what each part covers and how much each part costs.

Part A Coverage

Part A is hospital insurance. It covers you in the hospital. It also pays for skilled nursing facility care if you need it after leaving the hospital. It also pays for hospice care.

You should know that Part A hospital insurance has a maximum number of inpatient days that it will cover. You get a limited number of lifetime reserve days which you can use if you need to stay in the hospital for a long time. Medicare Part A does not cover emergency care outside of the United States.

Part B Coverage

Part B is medical insurance. Medicare Part B covers your medical services such as doctor visits, lab tests, medical equipment and supplies, mental health care, preventive screenings, and more. It also helps to cover certain prescription drugs when you are in hospitals or doctors’ offices.

Like Part A, Part B medical insurance does not pay for medical costs incurred outside of the United States, so it is important to consider supplemental medical insurance if you plan on traveling internationally. You should also know that Medicare Part B does not cover long-term care or custodial care services, so it is important to consider other options if these types of services are needed.

Medicare Part A Costs

Some people have to pay for Medicare Part A. But most people get it for free.

To be eligible for premium-free Medicare Part A, you must have worked at least 10 years (40 quarters) in the U.S. and paid Medicare taxes on those earnings. If you haven’t worked enough to qualify for premium-free Medicare Part A, you can purchase it.

Medicare Part A has a benefit period deductible. This means that you have to pay a certain amount of money for inpatient healthcare costs before Medicare starts to pay its share.

The deductible lasts for a certain amount of time (the benefit period). If you are admitted to the hospital, the Part A benefit period begins. After you have paid the benefit period deductible, Medicare will start to pay its share for your inpatient services.

For most people, once they have paid their Part A deductible, they can expect Medicare coverage for up to 60 days per stay in an approved care setting. Care settings include a hospital, a skilled nursing facility, a long-term care hospital, mental hospitals, and approve home healthcare.

If you are readmitted to the hospital for the same or a related issue within 60 days, you do not need to pay another deductible. Medicare Part A will continue to cover its share of the cost for the same illness or condition.

The Part A benefit period ends when you have gone sixty consecutive days without receiving any inpatient care. This means that if you are admitted to the hospital again after sixty days, you will be required to pay your part A deductible once more until a new benefit period begins.

Medicare Part B Costs

Medicare Part B has a monthly premium. There is also a yearly deductible that you will need to pay before Medicare Part B starts helping to cover your costs.

The Medicare Part B premium and deductible may increase on an annual basis, so it is important to plan for this possibility when budgeting for medical expenses. Keep in mind that some medical costs can be paid out of pocket and there may be tax benefits available for medical expenses.

In addition to the Part B premium and deductible, you pay a 20% coinsurance when you use services. The coinsurance applies to all Medicare-approved services. You will need to pay the Part B premium and deductible before the coinsurance starts applying.

What makes Medicare Part B stand out is that there is no annual limit to how much you have to pay in coinsurance. So it is important to understand what services are covered and what your responsibilities are as an enrollee.

Medicare Part C Explained

Medicare Part C is an optional way to receive your Medicare benefits. Medicare Advantage plans offer extra benefits beyond those covered by Parts A and B.

Part C plans provide all healthcare services covered under Part A and Part B plus additional benefits like prescriptions, vision, hearing, dental, and wellness programs. The extra benefits vary from plan to plan. It’s important to compare the different plans available in your area before selecting one.

Generally speaking, Part C plans provide more comprehensive coverage than traditional Medicare. However, they may come with higher out-of-pocket costs such as deductibles or copays.

How Medicare Part C Plans Deliver Healthcare

With most plans, you need to use specific healthcare providers associated with the plan in order to receive coverage. Plus, most plans require you to get a referral from your primary care physician before you can see a specialist.

If you are familiar with Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) plans through private insurance companies, you already have a good idea of how these plans work.

Part C plans are available through private insurers who contract with the Centers for Medicare & Medicaid Services (CMS). The benefits packages and premiums vary from plan to plan, so it’s important to compare plans in order to find one that best meets your needs and budget.

When you join a plan, you agree to receive all of your Medicare-covered healthcare services from providers in the plan’s network. If you need more detailed information on these plans or help selecting one, contact a licensed insurance agent for assistance.

Medicare Part C Costs

It is important to understand the various costs associated with a Part C plan so that you can make an informed decision when selecting your coverage.

Costs include monthly premium payments (if any), copayments for certain services, and coinsurance for some services. Additionally, your plan may have a maximum out-of-pocket (MOOP) limit, which is the maximum amount of money you will have to spend out of pocket each year on deductibles, copayments, and coinsurance.

Once you reach the plan’s MOOP limit, your plan will pay for all Medicare-approved services at no additional cost to you. This is a safeguard that traditional Medicare does not offer.

Note: You must continue to pay your monthly Medicare Part B premium. If a Medicare Advantage plan has a premium it is for the additional services it offers.

Medicare Part D Explained

Medicare Part D plans (PDPs) provide prescription drug coverage. This is different than Part A and Part B, which help pay for medications administered in the hospital or your doctor’s office.

Medicare prescription drug plans help with the cost of your outpatient prescriptions. They do not cover over-the-counter medications.

Part D Works With Original Medicare and Medicare Part C

You can add a Medicare drug plan to Medicare Parts A and B or to a Medicare Part C plan to help with the cost of your outpatient prescriptions. PDPs are offered by private insurance companies, like Aetna, Humana, and United Healthcare that are approved by Medicare.

All PDPs are compatible with Part A and Part B. However, Part C plans that include Part D benefits are not compatible with PDPs.

Part D Plans Have Premiums, Deductibles, Copays, and Limits

PDPs offer different levels of coverage with varying premiums, deductibles, copayments, and coinsurance amounts. PDPs also typically cover both generic and brand-name drugs.

It’s important to carefully research the PDP options available to you before enrolling. Not all Part D plans cover the same medications or provide the same level of coverage.

It’s also important to check out any PDP’s coverage limits, such as the maximum amount they will pay for medication or if they require you to use only certain pharmacies. PDPs may also offer additional benefits, such as discounts on vision and hearing services.

Original Medicare vs. Medicare Advantage Plans

While both traditional Medicare and Medicare Advantage plans offer health coverage for those eligible for Medicare benefits, it’s important to understand the differences between the two options before enrolling in a plan so that you can select the one that best meets your needs.

Original Medicare Offers Freedom of Choice

With traditional Medicare, you can go to any provider in the United States who accepts Medicare patients. You do not need referrals from your primary care provider for specialist visits or pre-authorization from an insurance company for procedures or treatments.

Medicare Advantage Offers Extra Benefits

Although provider choice with Medicare Advantage plans is somewhat limited compared to Original Medicare, these plans often offer extra benefits such as prescription drug coverage, dental, vision, and hearing. These are all extra costs when you enroll in Original Medicare.

Out-of-Pocket Costs Can Be More or Less

In addition to provider choice and extra benefits, out-of-pocket expenses are another major difference between traditional Medicare and Medicare Advantage plans. With Original Medicare, you generally pay 20% coinsurance after meeting the yearly deductible.

Some Medicare Advantage plans have lower deductibles and co-pays than Original Medicare. That said, people enrolled in a Medicare Advantage plan may still be subject to additional out-of-pocket costs including premiums and copayments/coinsurance charges depending on the specific plan they choose.

Original Medicare Is Easier To Budget

The bottom line is that it is easier to budget your healthcare costs with Medicare Parts A and B because you can more accurately predict your out-of-pocket expenses. With a Medicare Advantage plan, you may have to pay unexpected costs that are not part of the plan’s coverage such as pre-authorization fees or referrals.

Ultimately, it is important to understand the differences between Original Medicare and Medicare Part C plans in order to make an informed decision about which one is right for you. Be sure to consult with a licensed insurance agent before selecting a plan.

Medigap vs. Medicare Advantage

Medicare Supplement Insurance (Medigap) is a type of supplemental coverage that helps to cover some of the gaps in Original Medicare, such as copayments, coinsurance, and deductibles. They can also provide additional benefits such as coverage for foreign travel emergency medical expenses and excess charges from providers who don’t accept Medicare assignment.

While technically not part of Medicare, Medigap insurance was authorized by the federal government when the Medicare program was created. Medigap fits hand-in-glove with Medicare Parts A and B.

Additional Out-of-Pocket Coverage vs. Additional Benefits

Here’s the main difference between Medicare Part C and Medigap policies. Medigap offers additional coverage that complements your Original Medicare benefits. Medicare Advantage provides an alternative way to receive all your Part A and Part B benefits through an approved private insurer, and most plans include prescription drug coverage.

The other major differences are cost and coverage. With a Medigap policy, you purchase your prescription, dental, vision, and hearing coverage separately. With a Medicare Advantage plan you can get many of the added benefits you need at no extra cost but may have higher copayments or restricted access to certain providers.

Additional Premiums vs. Additional Service Costs

When it comes to costs associated with these two types of plans, your Part B premiums will remain the same. If you opt for a Medigap policy you will have an additional monthly premium. With Medicare Part C, there may be additional costs associated with some services, depending on the specific plan you choose.

Different Enrollment Periods

Additionally, enrollment periods may differ between these two types of plans so it is important to do research on both before deciding which option best suits your needs. Both have time-sensitive enrollment periods, so don’t delay.

Finally, when choosing between a Medigap policy or Medicare Advantage, it is essential to understand what type of coverage each one offers in terms of doctor visits, hospital stays, and other medical treatments so that you can make an informed decision. Evaluate both cost savings potentials as well as the level of care needed.

Which Medicare Is Right For You?

Now you know about the four parts of Medicare and their various costs. But which one is right for you? Here’s some advice.

Original Medicare is generally best when you want full control over your healthcare and you can afford additional insurance or you also qualify for Medicaid. This is not the best option if you have one or more chronic health conditions and can’t afford additional coverage.

Medicare Part C plans generally work best for healthy individuals who want to take advantage of extra benefits, such as routine dental services. For healthy people, these plans offer exceptional value. This may not be the best option if you have chronic health conditions and you can afford additional coverage.

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