Medicare Part CMedicare Part C is Medicare's private health plan option. Also known as Medicare Advantage, Medicare Part C plans are a type of Medicare health plan offered by companies that contract with Medicare to provide all... is Medicare Advantage, the private health plan alternative to traditional MedicareOriginal Medicare is private fee-for-service health insurance for people on Medicare. It has two parts. Part A is hospital coverage. Part B is medical coverage.. Sometimes called “MA” plans, it is another way to get your Medicare Part AMedicare Part A is hospital coverage for Medicare beneficiaries. It covers inpatient care in hospitals and skilled nursing facilities. It also covers limited home healthcare services and hospice care. and Part B health insurance benefits.
Whether you are new to Medicare or you’ve been enrolled for a while, this guide will help you on your journey into Medicare Advantage.
What is Medicare Part C?
Medicare Advantage plans are a private health insurance option for people with Medicare benefits. Medicare Part C is not mandatory. And plans are not available everywhere.
As of the 2023 plan year, there are still about 200 counties, perishes, and boroughs that don’t have Medicare Advantage plansMedicare Advantage (MA), also known as Medicare Part C, are health plans from private insurance companies that are available to people eligible for Original Medicare (Medicare Part A and Medicare Part B).. This includes the entire state of Alaska.
If you have health insurance through your employer, you might already have a pretty good understanding of how Medicare Part C works. You choose the type of plan you want, such as an HMO plan or a PPO plan, based on your health and financial needs, and then choose your doctors from the plans provider network.
What makes the Medicare Part C option different from group health plans available through an employer is the number of plans available. This year, many large metro areas have more than 50 plan options available.
Types of Medicare Advantage Plans
Unlike Original Medicare, Medicare Advantage is not a one-size-fits-all plan. There are several different types of plans, including HMO, PPO, PFFS, HMO-POS, and MSA plans. There are also plans for people with three different special needs, called Medicare Advantage Special Needs plans (SNPs).
If this all sounds like alphabet soup, don’t worry. We’ve created an in-depth article that will help you understand the different types of plans available and how to choose the right one for you. Read The 6 Types of Medicare Advantage Plans.
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Original Medicare vs. Medicare Advantage
Making the choice between joining a Medicare Advantage plan and keeping your Original Medicare benefits isn’t always straightforward or easy. In fact, for many people, it can be downright agonizing.
Everyone considering enrolling in a Medicare Advantage plan should carefully examine the pros and cons before making the leap. The problem is, the advantages and disadvantages are different for everyone because everyone’s situation is different.
Some people want more benefits, while others need lower costs. Some individuals want to keep their current specialists, while others only need a primary care physician. Some folks have both Medicare and MedicaidMedicaid is a public health insurance program that provides health care coverage to low-income families and individuals in the United States., while others are high-income earners with additional tax burdens.
The decision between Original Medicare and Medicare Advantage is personal. There’s a fine balance between getting what you want vs. what you need vs. what you can afford.
What Does Medicare Part C Cover?
One of the biggest benefits of Medicare Part C plans is their ability to offer services not covered by Medicare Part A (hospital insurance) and Part B (medical insurance). This is why the term Medicare Advantage was coined.
Medicare Part C plans bring all of your Medicare Part A (hospital insurance) and Part B (medical insurance) benefits into a single plan that may extra benefits, including:
- Prescription drug coverage and over-the-counter medications
- Wellness programs and fitness memberships
- Routine dental, vision, and hearing care
- Transportation to medical appointments
- Telemedicine
- Alternative medicine, such as acupuncture
Some plans offer uncommon extra benefits, like in-home support, bathroom safety, telemonitoring, caregiver support, and a Part B rebate.
Medicare Part C plans cover everything in Original Medicare. That’s a given. You don’t lose any of your Medicare benefits when you join a private health plan. However, there are differences in how plans are allowed to cover your Medicare benefits.
For example, in Original Medicare, you can use any doctors, hospitals, and specialists you want, so long as they will see you and accept Medicare. You’re covered anywhere you go in the U.S. and its territories.
This is not how Medicare Part C plan coverage works.
Medicare Advantage plans use provider networks and they have a defined service area (typically your county). Depending on the type of plan you’re in (HMO, PPO, PFFS, etc.), if you go out of network you may pay more or all of the costs.
Most Medicare Advantage plans also require their members to have a primary care physician (PCP). Your PCP acts as the gatekeeper to your healthcare benefits. If you need a specialist, your PCP will need to make a referral. And, with many plans, services outside of your doctor’s office will require pre-authorization.
This is the difference between the private fee-for-service health insurance you get with Original Medicare and managed care health insurance through Medicare Part C.
Here are a few things to think about:
- If you want full control over choosing your healthcare providers, a Medicare Advantage plan may not be right for you.
- If you are concerned that your access to specialists and services may be limited by referral and pre-approvalPrior authorization is a process used by health plans to control healthcare costs. Most HMO plans and some PPO plans require authorization before receiving certain treatments, medical services, or prescription drugs. requirements, a Medicare Advantage plan may not be right for you.
- If you are a snowbird and need to receive regular care away from your primary home, a Medicare Advantage plan may not be right for you.
Medicare Part C Costs
There’s a lot of confusion about what Medicare Part C costs. The confusion stems from Medicare Advantage plan premiumsA premium is an amount that an insurance policyholder must pay for coverage. Premiums are typically paid on a monthly basis. In the federal Medicare program, there are four different types of premiums. , which can be as low as zero dollars.
Does that mean a Medicare Advantage plan is free? No. Of course not.
Everyone on Medicare pays a monthly premium for their Part A and Part B coverage. If you paid the minimum 40 quarters (10 years) of Medicare taxes, you get premium-free Part A. If you qualify for both Medicare and Medicaid, you may be eligible for Part B premium assistance.
If you choose a Part C plan for the delivery of your Original Medicare Benefits, you will continue to pay your Part A and Part B premiums. They do not go away. And if you are a high-income earner, you will pay your Income Related Monthly Adjustment Amounts (IRMAAIncome Related Month Adjustment Amount (IRMAA) is a Medicare Part B and Medicare Part D premium surcharge that is levied on high-income earners. The surcharge amount is based on a beneficiary's adjusted gross income.).
If the Medicare Advantage plan you choose has a monthly premium, the premium covers the cost of any additional services and benefits offered by the plan, such as Medicare Part DMedicare Part D plans are an option Medicare beneficiaries can use to get prescription drug coverage. Part D plans provide cost-sharing on covered medications in four different phases: deductible, initial coverage, coverage gap, and catastrophic. Each... coverage for your prescriptions. You pay this amount directly to the plan.
In addition to your Part A, Part B, and Part C monthly premiums, you will have shared costsAn amount patients pay for their share of the cost of medical service or supply, like a doctor’s visit, hospital inpatient visit, or prescription drug., including deductiblesA deductible is an amount a beneficiary must pay for their health care expenses before the health insurance policy begins to pay its share., copays, or coinsuranceCoinsurance is a percentage of the total you are required to pay for a medical service. .
Both Original Medicare and Medicare Part C are 80/20 cost-sharing systems. Medicare Part A and Part B both pay about 80% of all Medicare-approved costs. The beneficiaryA person who has health care insurance through the Medicare or Medicaid programs. pays the remaining 20%.
Medicare Advantage plans are required to offer actuarially-equivalent Part A and Part B benefits. However, where Medicare Part A has a benefit periodA benefit period is a method used in Original Medicare to measure a beneficiaries use of hospital and skilled nursing facility (SNF) services. With each new benefit period, the beneficiary is charged a new benefit... deductible, and Part B has a 20% coinsurance, Part C plans set their own out-of-pocket costsOut-of-Pocket Costs for Medicare are the remaining costs that are not covered by the beneficiary's health insurance plan. These costs can come from the beneficiary's monthly premiums, deductibles, coinsurance, and copayments..
For example, in 2023 the Part A benefit-period deductible for a stay in the hospital is $1,600. You pay that amount even if your stay is 48 hours. But it covers you for up to 60 days.
With a Part C plan, you may pay a coinsurance or a stepped copayment. For example, a plan may charge a 20% copayment for every day you’re in the hospital. Or they may specify a stepped copayment like $295 per day for days 1 through 7, and $196 per day for days 8 through 60.
This is important because you could find yourself paying more for hospitalization in a Medicare Part C plan than you would in Original Medicare without any additional coverage. In the stepped copayment example above a 10-day stay in the hospital would cost you $2,653. And that’s just for the Part A services.
We have a complete directory of Medicare Advantage plans to help you to find plans where you live:
- We list all plans except employer plans, so there’s no need to go to multiple websites.
- Every plan page shows you the extra benefits included and what you pay to use healthcare services.
- No hype. No sales talk. Just well-organized plan information you can download.
With both Original Medicare and Medicare Part C, costs can add up very fast. Particularly inpatient careInpatient care refers to care provided in a hospital or other inpatient facility. Inpatients are admitted and stay at least one night depending on their condition. costs.
Fortunately, Medicare Part C has a maximum out-of-pocket (MOOP) feature. Every plan sets its MOOP for the year, up to the maximum allowed. When your out-of-pocket costs on Part A and Part B services reached the MOOP, the plan picks up all remaining costs for the year.
Original Medicare does not have a maximum out-of-pocket limit. To protect yourself from unlimited costs, you will need to get Medicare Supplement insuranceMedicare Supplements are additional insurance policies that Medicare beneficiaries can purchase to cover the gaps in their Original Medicare (Medicare Part A and Medicare Part B) health insurance coverage..
Consider this:
- If you are at high risk for hospitalization, look for a Medicare Advantage plan that has higher premiums but lower inpatient copaymentsA copayment, also known as a copay, is a set dollar amount you are required to pay for a medical service., or stay in Original Medicare and add Medicare Supplement insurance.
- Be sure to factor in a plan’s MOOP. If you can’t afford to pay the out-of-pocket maximum in a year, the plan’s cost structure could get you in trouble.
Medicare Part C Eligibility
If you are enrolled in both Medicare Part A and Part B, you are eligible for Medicare Part C. If you have Part A only or Part B only, a plan can’t let you join.
Most people are eligible as soon as they turn age 65. But people with Social Security Disability Insurance (SSDI) benefits also qualify after 24 months. Individuals with certain chronic illnesses, including ESRDEnd-Stage Renal Disease (ESRD), also known as kidney failure, is a condition that causes you to need dialysis or a kidney transplant. People with ESRD are eligible for Medicare coverage regardless of age. and ALS, qualify immediately. To learn more, read Who is Eligible for Medicare Part C?
Your Medicare Advantage trial right is very important. It protects your right to buy Medicare Supplement Insurance (Medigap) without medical underwriting. But only if you switch back in the first 12 months. You will also have the right to join a Medicare Part D prescription drug plan (PDP).
Medicare Part C Enrollment
With four different enrollment periodsEnrollment periods are designated time periods to enroll or disenroll from the various parts of Medicare. There are six Medicare enrollment periods., it’s easy to get confused when it comes to joining, changing, and dropping a Medicare Advantage plan. We skim over Medicare’s enrollment rules here. If you need a complete explanation, check out How to Enroll in a Medicare Advantage plan.
The best time to enroll in a Medicare Advantage plan is when you are first eligible:
- You have a 7-month Initial Enrollment PeriodThe Initial Enrollment Period is a seven-month period when new beneficiaries can enroll in Medicare without a penalty. Most people enroll in Medicare at age 65. (IEP).
- You have your Medicare Advantage trial right.
- Your enrollment may not be automatic.
Your IEP begins 3 calendar months before you’re eligible, includes the month you become eligible, and ends three calendar months later. This is important because you need time to get enrolled in both Medicare Part A and Part B and complete the paperwork for your chosen plan.
Important: Some people get their Medicare Part A and Part B benefits automatically. Some people need to sign up for them:
- Individuals collecting Social Security — either retirement or disability — are automatically enrolled. The SSA sends these people an information packet about 90 days before they turn 65 or receive their 25th month of SSDI benefits.
- If you are not collecting Social Security, you will not be automatically enrolled in Medicare Part A and Part B. You must contact Social Security directly to start the enrollment process. Do this three full calendar months before you are eligible.
- To enroll in Medicare, contact Social Security by calling 1-800-772-1213.
Don’t allow your Initial Enrollment Period to pass without enrolling. If you miss your IEP, you will likely have to enroll during either the General Enrollment PeriodThe General Enrollment Period (GEP) allows beneficiaries to enroll in Medicare Part A and Part B from January 1 to March 31 if they missed their Initial Enrollment Period. Beneficiaries can also enroll in a... or a Special Enrollment PeriodSpecial Enrollment Periods (SEPs) allow beneficiaries to change their Medicare Advantage and Part D plans due to a special circumstance. Common reasons for a SEP include moving, losing employer coverage, and Medicaid eligibility, to name....
If you missed your IEP, and you do not have insurance through an employer, your next opportunity to join is during the General Enrollment Period (GEP). The GEP runs from January 1 through March 31.
If you have health insurance through your employer, and you missed your IEP due to employer misinformation, you can request a Special Enrollment Period (SEP) to get enrolled. Call 1-800-MEDICARE to explain your situation and request a SEP.
Once you are enrolled in Medicare Part A and Part B, and you have your red, white, and blue Medicare card, then you can apply to join a Medicare Advantage plan. If you complete all of the paperwork before the month you are first eligible, your benefits will start on the first day of the month you are eligible.
Call 1-855-728-0510 (TTY 711) for plan assistance.
If you qualify for Medicare and don't know where to start, MedicareEnrollment.com, an independent HealthCompare insurance broker, has licensed insurance agents who can help you with your Medicare enrollment options, Mon-Fri, 8am-9pm , SAT 8am-8pm EST.
Getting Extra Help
Sadly, healthcare and prescriptions are not affordable for all Americans. Some folks simply need some extra helpSocial Security's Low-Income Subsidy (LIS) program helps Medicare beneficiaries pay for their Medicare Part D prescription drugs by paying some of the costs. Also known as "Extra Help", beneficiaries who qualify for LIS receive premium.... For this reason, the USA has several social safety net systems managed through Social Security, Medicare, and Medicaid.
In this section, we offer articles to help you understand the various extra help programs available, and how you can use them to your benefit.
- Who Qualifies for Extra Help Medicare?
- Extra Help Paying Medicare Part BMedicare Part B is medical coverage for people with Original Medicare benefits. It covers doctor visits, preventative care, tests, durable medical equipment, and supplies. Medicare Part B pays 80 percent of most medically necessary healthcare services. Premiums
- How Does Medicaid Work with Medicare Advantage Plans?
- What are Medicaid and Medicare Savings Programs?
- 10 Ways a [Medicare D-SNP] Plan Will Save You Money
- What Zip Codes Qualify for Extra Medicare Benefits?
- QMB Income Limits {year}