Medicare Part C

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The Medicare Advantage program is a federally-funded health insurance program that provides benefits to senior citizens and disabled individuals who are enrolled in Medicare. The program is also known as “Medicare Part C.”

What is Medicare Part C?

Medicare Part C plans are an optional alternative to traditional Medicare. They are private Medicare plans which pay instead of Medicare.

Medicare Advantage plans are a package where you will have Part A, Part B and usually Part D together in one plan. Most Advantage plans include a built-in Part D drug plan.

MA plans resemble group insurance benefits you may have had through former employers. Generally, there is a local network of providers that you will use. You will pay copays for many routine services like doctor’s visits, lab work, ambulance, surgeries, hospital stays, urgent care, and more.

What Does Medicare Part C Cost?

Medicare Part C plans usually have lower monthly premiums than Medigap plans. With a Part C plan, you’re agreeing to use the plan’s network of doctors and other health care providers, and you’ll pay copays as you go. The network might be an HMO network, which means you’ll need to choose a primary care physician and get referrals for specialist care. There are also Medicare PPO and Medicare PFFS options, which have some out-of-network benefits.

Besides your monthly premium, your spending might include deductibles, copays and coinsurance up to the plan’s out-of-pocket maximum. Some Medicare Part C plans have premiums as low as $0. This doesn’t mean that Medicare Part C is free. When you enroll in a Medicare Part C Advantage plan, Medicare pays a fixed monthly sum to the insurance carrier to provide your care. The MA company will offer you a monthly premium as low as possible to attract you to their plan.

The premiums, copays, benefits, and drug formulary (list of covered drugs) can and do change from year to year. This is because the Medicare Part C plan must renew its contract with Medicare annually. So, it’s important to check with your plan each year to see what changes have been made.

Medicare Advantage Out-of-Pocket Maximums

Medicare Advantage plans must have an out-of-pocket maximum to protect enrollees. Medicare sets the highest allowable amount for this OOP maximum each year. The Medicare Advantage OOP in 2022 is $7,550. This means that the most you will spend on that plan for Part A and B services is $7,550. Part D spending is separate.

When reviewing a potential Medicare Part C plan, look at the OOP maximum on that plan. If you have a year of bad health with lots of spending on copays and coinsurance, do you have enough set aside in a rainy-day savings fund to meet that maximum? If not, find a plan with a lower out-of-pocket maximum, or choose Medigap, which has far less spending on the back end.

Many people ask us to compare Original Medicare vs Medicare Advantage plans. Original Medicare does not have any OOP maximum to protect you. You could pay that 20% forever. So if you cannot afford the more comprehensive Medigap plans, then a Medicare Part C plan at least has an OOP cap to protect you. For many folks, this makes Medicare Part C coverage a more attractive option that Original Medicare alone.

Medicare Part C Eligibility

Any Medicare beneficiary, regardless of age, can purchase a plan if they meet the following criteria:

-You must be enrolled in both Medicare Part A and B. Many people mistakenly think they can drop Part B if they enroll in a Medicare Part C plan; this is NOT the case. If you drop Part B, you will immediately be kicked out of your Part C plan.

-You need to live in the plan’s service area. This Medicare Part C eligibility will be based on the address that you have on file with Social Security; you must choose a plan that operates in that same county. Some plans will be specific to only one or two counties, while others might span the whole state.

Be sure to also remember that Medicare Advantage plans have election periods. This means that you can enroll during your Initial Enrollment Period or during the Annual Election Period in the fall. There are also certain Special Election Periods (SEPs) that occur in certain circumstances, such as if you move out of state and lose your plan. You would then be granted a SEP to enroll in a plan mid-year in your new state.

What Does Medicare Part C Cover?

Medicare Part C covers the same hospital and outpatient services as Medicare Part A and B. However, instead of having to pay deductibles and 20% of your medical services, you will only have to pay copays set by your plan.

Each Medicare Advantage plan has a summary of benefits that lists the copays for various medical services. For example, you might pay $10 for lab work, $50 for a specialist visit, or $200 for an MRI. Some items might have a $0 copay.

Remember that everything you spend on Part A and B services counts toward your out-of-pocket maximum. If you reach that maximum, your Part C plan will pay 100% of the costs for the rest of the year.

MA plans also often include a built-in Part D drug plan.

Do I need Medicare Part C?

No, you don’t need to enroll in Medicare Part C, but it is an option. If you decide that you want to enroll in a Medicare Advantage (Part C) plan, you can. It’s up to you to decide what is the best fit for you. However, MA plans provide you with a limit to your expenses, whereas Original Medicare does not. So if you’re concerned about costs, an MA plan may be a good choice for you.

Medicare Part C Enrollment Periods

Different insurance plans have different enrollment periods. It’s important to know when you can enroll in or dis-enroll from a plan so that you can make the best choices for your health care needs.

The Initial Enrollment Period is when you first get Part B. You can also change during the Annual Election Period each fall, which runs from October 15 – December 7th, with your benefits beginning January 1st.

The Annual Election Period exists because if you are enrolled in Medicare Part C or Part D, your plan’s benefits, formulary, pharmacy network, provider network, premium and/or co-payments and co-insurance may change on January 1 of each year. This gives you the opportunity to change your plan if you don’t like the changes coming for next year.

There are also special election periods for Medicare Advantage plans, such as when you leave employer group coverage or move out of your plan service area. A good insurance agent who specializes in Medicare-related insurance products can help you learn the enrollment periods available.

Part C Medicare Help

Medicare Advantage plans have rules, networks, and enrollment periods. Limitations, restrictions and copays may apply. A licensed insurance agent can help you understand everything before you apply for a plan.