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Is Medicare Part C Good to Have?

by David Bynon, last updated

Medicare Part C offers people with Part A and Part B Medicare coverage the option to enroll in a health plan from a private insurance company.

In this article, I’ll go over exactly how a private health plan may benefit you and why it might be good to have for some people.

Key Takeaways

  • The primary advantage of Medicare Part C is the variety of health plans available to meet different needs.
  • Secondary advantages include additional benefits, potentially lower overall costs, and coordinated care.
  • Also known as Medicare Advantage plans, coordinated care plans, and all-in-one Medicare plans, private health plans package all traditional Medicare benefits and some extra benefits into a single plan option.
  • Most Part C plans also include Medicare Part D benefits for prescription drug coverage.
  • Additional benefits vary widely from plan to plan but may include vision care, hearing aids, dental care, and other medical care benefits not offered by the federal government.

What Medicare Advantage Plans Cover

Whether you prefer to call it Medicare Part C or Medicare Advantage, the private Medicare insurance option bundles your Medicare Part A and Medicare Part B benefits into a single plan. Every plan is required to deliver your Part A and Part B benefits. These benefits cannot be denied.

In addition to your core hospital insurance (Part A) and medical insurance (Part B) benefits, most plans offer some additional benefits. The most common additional benefits offered include prescription drug coverage (Medicare Part D), as well as routine, vision, hearing, and dental care.

Some plans offer additional extra benefits, like transportation to and from doctor appointments, telemedicine, and wellness (preventive care) programs, including gym memberships. Some plans even include home benefits, such as wheelchair ramps, shower grab rails, and meal delivery.

Another benefit you may hear people talk about is Medicare Part B giveback. This is a Medicare Part B premium reduction benefit, whereby the plan gives a monthly rebate on your Part B premium.

Who Benefits From a Medicare Part C Plan?

Before deciding to enroll in a Medicare Part C plan, it’s important to cut through the TV commercial hubbub and answer a single question. Will a Medicare Part C plan be an advantage to you?

If you can’t answer that question with a definitive “yes,” then what’s the point of a Medicare Advantage plan?

Here’s something important you need to know while you consider the benefits.

Even though private Medicare plans are required to cover everything you get with Original Medicare, they are not required to cover your benefits in the same way.

What does that mean?

It means that health plans can set their own premiums, shared costs, and limits. They can also set their own rules for how you get your healthcare services. This is an important difference between Medicare Part B and Medicare Part C that cannot be emphasized enough.

Let’s break this down so you understand what I mean.

How Much Does Medicare Part C Really Cost?

If you join a Medicare Advantage plan you must continue paying your Medicare Part B premium. If the plan you choose requires an additional premium for the extra benefits it includes, you will pay the plan’s premium, too.

When you use most healthcare services, a Part C plan will charge you a copayment. With Original Medicare Part B services, you pay a flat 20% coinsurance to see your doctor. Part C plans may charge you more or less than this amount. Most charge a flat fee (copayment).

Where most people fail to look closely enough is at the Part A out-of-pocket costs. In Original Medicare, if you are hospitalized you pay a Part A benefit period deductible. It covers most of your hospitalization costs for the first 60 days of inpatient care.

Medicare Part C insurance plans charge a copayment for Part A inpatient services. And, if the plan charges more than $300 per day for the first 5 days of hospitalization, you will be paying more than you would in Original Medicare.

Healthy individuals tend to pay less and get more with a Medicare Advantage plan than do individuals with chronic health conditions. That’s because they can take full advantage of lower premiums and additional services. Plus, healthy individuals have low cost-sharing because they use fewer Part A and Part B services.

Conversely, in order to make Medicare Advantage affordable, people with chronic health conditions are generally better off with a plan that has a higher monthly premium, lower copays, and a lower out-of-pocket maximum. These people may be better served by staying in Original Medicare and adding a Medicare Supplement insurance policy (Medigap).

RELATED: What is the Average Cost of Medicare Part C?

The Types of Medicare Part C Plans Are An Advantage

In most areas, there will be several different types of Medicare Advantage plans available. Each type of health insurance has its benefits and detractors.

  • Health Maintenance Organization (HMO) plans use provider networks to deliver healthcare to their members within the plan’s service area. Cost sharing in these plans is often lower, but maximum out-of-pocket limits and/or deductibles may be higher. However, if you don’t use in-network providers, you pay all costs. HMO plans generally require you to have a primary care provider (PCP) that coordinates all services, such as referrals to specialists, surgical centers, and testing centers. Your PCP will also work with the plan to get pre-approval for services, where required.
  • Preferred Provider Organization (PPO) plans have a provider network, like an HMO, but allow members to go out-of-network at a higher cost. Most plans have the same rules for referrals and prior authorization as an HMO. General doctor visits do not require prior authorization with PPO plans.
  • Health Maintenance Organization Point of Service (HMO-POS) plans are a type of managed care plan that combines features from both the traditional HMO model and a PPO. Basically, it offers lower costs in exchange for limited choices in the healthcare provider network. When a member goes outside of the network, they are required to pay all bills, keep track of all costs, and submit forms for reimbursement.
  • Private Fee-for-Service (PFFS) plans may sound like Original Medicare, but they’re not. Most PFFS plans have a provider network. However, if you join a plan that has a contracted network of providers, you can also use providers who agree agreed to treat plan members and accept the plan’s payment. If you go to a doctor or hospital that doesn’t belong to the plan’s network for non-emergency or non-urgent care services, the plan may not cover your services.
  • Medicare Savings Account (MSA) plans are the most recent plans added to Part C. Similar to a traditional Health Savings Account, the plan deposits a set amount into your MSA account each year. You can use the money in your MSA to pay for qualifying healthcare services until you reach the annual deductible.
  • Medicare Special Needs (SNP) plans, while not technically a plan type, are only available to individuals with special needs. For example, people who are dual-eligible for both Medicare and Medicaid can join a D-SNP. C-SNP special needs plans help people with specific chronic health issues, and I-SNP plans are for institutionalized individuals.

In addition to the types of plans mentioned above, Medicare Advantage plans may include a prescription drug plan (Medicare Part D). However, this is not a requirement.

Medicare Advantage Has Rules That Benefit You

No matter how you might feel about government bureaucracy, Medicare’s rules over the marketing and sale of Medicare Advantage plans are an advantage for consumers. The list of dos and don’ts for marketers and insurance agents is long and painful (for them!). But it’s all designed to protect you.

These rules include websites like MedicareWire. Did you notice the “non-government website” declaration next to the MedicareWire logo? Check out the disclaimers in the website footer. Medicare requires these disclaimers.

They also have rules about various claims plans, marketers, and agents can make. For example, an agent can’t tell you that a plan will save you money. There’s no way to know this because it is 100% dependent on your use of healthcare services.

Likewise, an agent can’t try to sell you an unrelated product at the same time they are advising you on a Medicare Advantage plan. Agents have scope of appointment rules that must be followed.

These same rules do not apply to Medicare Supplement insurance, which is regulated by each state. For example, there’s no regulation that prevents marketers and agents from withholding Medicare Supplement rates from you until you give them your name, phone number, and other personal information.

Enrollment Periods

Both Original Medicare and Medicare Advantage have enrollment period rules. The best time to get enrolled is during your Initial Enrollment Period (IEP) when you first qualify. This is when you have the most options and guarantees available to you.

Although Medicare Advantage cannot discriminate based on pre-existing conditions, Medicare Supplement insurance companies can. During your IEP, you have a guaranteed issue right for the Medigap plan of your choice, if that is your preferred option.

References and Citations

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