Medicare Part C (also called Medicare Advantage) operates more like traditional health insurance than Original Medicare. Multiple private insurers offer different Part C plans. If you choose to enroll in Medicare Part C, it will replace your Part A & B coverage. However, Medicare Advantage offers all of the services that are included in Medicare Part A & B.
Terms to Know
Star Ratings: Each year, Medicare grades the performance of every Medicare Advantage plan. The best possible rating for a plan is 5 stars. You can switch to a better-rated plan every year if one exists near you.
Original Medicare (Parts A & B): Medicare calls Medicare Part A “hospital insurance”, and Medicare Part B “medical insurance”. Together, these parts are known as Original Medicare. The rules around Original Medicare also serve as the foundation for private Medicare Advantage and Medicare Supplement plans.
Medicare+Choice: This was the name for managed Medicare until 2003 when the program was replaced by Medicare Advantage, which is now synonymous with Part C.
Out-of-Pocket Maximum – The most you’ll be asked to spend on care in a year before your Part C plan takes over all costs. You won’t have to pay any more deductibles or copayments for the year once you reach your out-of-pocket maximum. A plan can only ask you to pay $6,700 or less before you reach your yearly out-of-pocket maximum.
Your monthly premiums and prescription drug costs don’t count towards your out-of-pocket maximum, and you’ll still pay those costs if your out-of-pocket maximum is reached.
Why Do People Enroll in Medicare Part C?
Some people find Medicare Advantage plans to be more convenient, and the premiums in some cases more affordable, than Original Medicare. Your maximum out-of-pocket costs on all Part C plans are limited to no more than $6,700 per year. Many plans offer an even lower annual out-of-pocket maximum.
Medicare Advantage plans can also choose to provide additional benefits that are not offered by Parts A & B. You can bundle important benefits such as hearing aids and prescription drug coverage into your Part C plan.
Once you sign up for Part C, your billing and care may be consolidated. You can typically access all your medical services with just one card, choose a primary care physician, and pay for different treatments with a single bill.
Part C plans may define their own premiums, deductibles, copayments, and physician referral systems. Your plan must cover all Original Medicare services and may offer additional benefits.
Medicare Part C has gained popularity over the past 10 years. According to the Kaiser Family Foundation, about 31% of Medicare beneficiaries are enrolled in Medicare Advantage.
Who Is Eligible for Part C Coverage?
If you are enrolled in Original Medicare and live within a Part C plan’s service area, then you are eligible to enroll in that plan.
In most cases, you are eligible for Original Medicare if:
- You are 65 years old (or older); and
- You are an American citizen or a Permanent Legal Resident of the U.S for at least five consecutive years.
Those under the age of 65 with a qualifying disability who are enrolled in Original Medicare are also able to join a Medicare Advantage plan. You can join Medicare Part C if:
- You were diagnosed with Lou Gehrig’s disease (ALS); or
- You are disabled and receive disability benefits.
- **Those with End-Stage Renal Disease (ESRD) are generally unable to enroll in a Medicare Part C plan.
What Does Medicare Advantage Cover?
The exciting feature of Medicare Part C is that most Medicare Advantage plans offer additional benefits, above and beyond what Original Medicare covers. Since Part C plans have narrower networks and are privately managed, they have lower monthly premiums. However, the monthly costs for services can be more, such as $395 a day for the first five days of hospitalization.
Depending on the plan you choose, Medicare Advantage may cover:
- Hearing aids;
- Dental care and dentures;
- Vision care and glasses;
- Fitness center memberships;
- International health insurance;
- 24-hour doctor hotlines;
- Acupuncture and chiropractic care; and/or
- Other health-related benefits.
Medicare Advantage plans are required to cover all of the benefits that Original Medicare covers. Essentially, if you want all your basic health needs covered, you can either go with Original Medicare or go with Medicare Part C.
Prescription Drugs: Most Medicare Advantage insurers offer some form of coverage for prescription drugs. However, the costs of medications are not limited by your annual out-of-pocket maximum.
Changes May Happen Every Year: Unlike Original Medicare, the benefits offered by your plan may change every year. Part C enrollees will receive a notice in the mail before any changes take effect. You can also review your plan’s star rating (and the rating of other Part C plans in your area) each year to help you make coverage decisions.
What Is NOT Covered by Medicare Part C?
Medicare Part C covers everything that Original Medicare covers.
International Emergency Care: Some Medicare Supplement plans cover the costs of medical emergencies in a foreign country. Most Medicare Advantage plans do not have this benefit. This is one of the major differences between Part C and Medigap.
Hospice Care: This will be covered by Part A, even when you’re enrolled in Part C.
Long-term Care: Services that help you perform basic tasks, whether through a caregiver or a stay in a nursing home, are generally not covered by Original Medicare. Your Part C plan may choose to offer it.
Hearing Aids, Dental Care, Glasses, and Medical Travel: Many Medicare Advantage plans include these benefits; however, Part C plans are not required to offer them.
Networks: If medical needs arise during travel away from your plan’s service area, you may not be able to see a local doctor.
The plan can also set its own copayments and deductibles, up to the annual out-of-pocket maximum of $6,700.
How Much Does Medicare Part C Cost?
Premium (cost per month): The average plan will cost an estimated $23 per month in 2020. For a small additional premium, many plans cover prescription drug costs (replacing Medicare Part D coverage). However, many zero-premium plans also include drug coverage. Most Part C carriers have a zero-premium plan available.
If you did not work and pay taxes for 10 years, you will need to continue paying your Part A premiums to receive Medicare Advantage. Regardless of your work and tax history, you will need to continue paying your Part B premiums to receive Medicare Advantage.
How Does Part C Interact with Other Medicare Programs?
Medicare Advantage (Part C) and Original Medicare (Part A and Part B):
You’ll only be interacting with your Medicare Advantage insurer and provider network once you enroll in Part C. However, you’ll continue paying for Original Medicare, which the federal government will use to reimburse your Medicare Advantage insurer. You can switch between Original Medicare and Part C in limited circumstances.
Medicare Supplement insurance policies are privately-run insurance plans that take care of your copayments for Original Medicare. Since Medicare Advantage coverage replaces Part B, you cannot combine Part C coverage with a Medigap policy.
You may have heard about Medigap plans such as “Medicare Plan C”. Medicare Advantage, or Part C, is unrelated to Plan C. A “part” involves the federal program, while a “plan” is one of several optional additions to the Original Medicare program.
Medicare Advantage and Part D (Prescription Drug Coverage):
Medicare Part D is a standalone Prescription Drug Plan that works alongside your Original Medicare benefits. Instead of combining Part C and Part D, you’d generally be better off by selecting a Medicare Advantage plan that includes prescription drug coverage (these plans may be called MAPD). In some circumstances, you can have both Part C and Part D – it’s best to check with your Medicare Advantage issuer.
You cannot have Part D if your Medicare Advantage plan does include prescription drug coverage.
Medicare Part C: How Do I Enroll?
First, you’ll need to enroll in Original Medicare (Parts A & B). You can apply online for Original Medicare on the Social Security website, or over the phone by calling the Social Security Administration at 1-800-772-1213.
Once you’ve enrolled in Original Medicare, you can choose a Medicare Advantage plan using HealthCare.com’s plan selector.
Enrollment Periods: When Can I Sign Up?
You only need to enroll in Medicare Part C one time. However, you’ll still have the option to switch plans or move to Original Medicare every year. There are several times you can join a Part C plan.
Initial Enrollment Period (IEP): When you first become eligible for Medicare, you have the option of enrolling in a Medicare Advantage plan during your Initial Enrollment Period, a 7-month period that starts 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month that you turn 65.
If you previously had Part A coverage but just enrolled in Part B for the first time during the Medicare Part B general enrollment period (January 1-March 31), then you can enroll in Medicare Advantage from April 1 through June 30. But many people enrolling in Part B qualify for a Special Enrollment Period (see below).
Special Enrollment Period (SEP): If you move out of your current plan’s service area – or you move and simply discover that there are other plans in your new location – then you can switch plans at any time of the year.
There are other special circumstances that could qualify you for a Special Enrollment Period, including when:
- You become eligible for Medicaid.
- You qualify for the Extra Help program, which assists with the cost of your prescription medications.
- You are receiving care in an institution, such as a long-term care hospital or skilled nursing facility.
- You want to switch to a Medicare Advantage plan with a 5-star overall quality rating.
Open Enrollment Period (OEP): Additionally, each year from October 15 to December 7, you have the opportunity to add or switch Medicare Advantage plans during the Annual Election Period (AEP). During this time, you can also switch back and forth between Part C and Original Medicare. However, there may be no guaranteed issue right for a Medicare supplement. If you did not enroll in Medicare during the IEP or SEP, you cannot enroll during the OEP.
Taking the Next Steps
Review your Medicare coverage to see if it meets your needs. You can browse our Medicare Advantage guides to understand what’s right for you.