Section 2: The Parts of Medicare
Part C: Medicare Advantage
These plans provide the benefits of parts A and B within a limited provider network and usually include Part D prescription drug coverage
ESTIMATED READ TIME: 5 MINUTES
IN THIS ARTICLE
• What Part C does, doesn’t cover
• More about Part C
• Types of Medicare Advantage plans
• What you pay for Part C
• When should you sign up for Part C?
What Part C does, doesn’t cover
Part C is another name for Medicare Advantage plans. All Medicare Advantage plans cover:
Most Medicare Advantage plans cover:
Medicare Advantage plans may offer additional benefits, such as:
What Medicare Advantage plans don’t always cover:
More about Part C
Part C, also called Medicare Advantage, is an all-in-one alternative to original Medicare. Private insurance companies offer Medicare Advantage plans that Medicare approves, bundling together parts A and B and usually Part D into one comprehensive plan. About half the plans nationwide charge no premium, and most people choose a no-premium plan. The average monthly premium for Medicare Advantage enrollees, including those who pick a no-premium plan, is $18 in 2023.
If you decide on a Medicare Advantage plan, you’ll still have to enroll in parts A and B and pay the Part B premium ($164.90 per month in 2023), but you then choose a Medicare Advantage plan from a private insurer. You may have several options depending on your location.
The federal government requires these plans to cover everything that original Medicare covers and some plans help pay for services that original Medicare doesn't cover, such as routine dental, hearing and vision care.
Also, Medicare Advantage plans are allowed to provide coverage for some additional expenses, such as meal delivery, shower grips and wheelchair ramps for your home, and transportation to and from doctors’ offices. However, not all plans offer these extra benefits; they may be available only to certain enrollees.
Most Medicare Advantage plans are either health maintenance organizations (HMOs) or preferred provider organizations (PPOs). With HMOs, you typically choose a primary care doctor who directs your care, and you may need a referral from your primary care doctor to see a specialist. PPOs have networks of doctors and facilities you can use, and you usually don’t need a referral to see a specialist. If you go to a provider who isn't in the plan’s network, you'll likely pay more.
Most Medicare Advantage plans also fold in prescription drug coverage. The premiums, out-of-pocket costs, provider networks, covered drugs and extra benefits vary by plan, so read the plan descriptions carefully.
Be aware: A Medicare Advantage plan is not set-it-and-forget-it coverage. Plans can change their coinsurance, copays, covered services, drug coverage, lists of doctors and other benefits yearly. So you’ll have to stay up to date on your plan’s benefits and study your options at least yearly to make sure your plan continues to provide the best coverage for your health care needs.
Some new terms you’ll encounter in this article:
Types of Medicare Advantage plans
Many Medicare Advantage plans are coordinated care plans and each plan has its own provider network. In most cases, you pay less for care you receive from network providers than for the same care from providers outside the network. In some cases, plans won't cover care received outside the network, except in emergencies.
All plans offer nationwide coverage for emergency care, urgent care and renal dialysis, though the definition of “urgent” can vary among plans.
The most common types of Medicare Advantage plans:
HEALTH MAINTENANCE ORGANIZATION PLANS
PREFERRED PROVIDER ORGANIZATION PLANS
PRIVATE FEE-FOR-SERVICE PLANS
SPECIAL NEEDS PLANS
C-SNP for people with certain chronic conditions, such as chronic heart failure, diabetes, end-stage renal disease or chronic lung disorders. The “C” stands for chronic condition.
D-SNP for people entitled to both Medicare and Medicaid. The “D” stands for dual eligible.
I-SNP for residents of nursing homes and other long-term care facilities. The “I” stands for institutional.
What you pay for Part C
Many Medicare Advantage plans charge copays for each doctor visit or service. You may pay a $15 copay each time you see an in-network doctor or $20 more to see a specialist and $295 for each of the first six days of a hospital stay. These plans may also charge a copay for home health visits.
You also may have copayments for your prescription drugs with different amounts based on the type of drug. A plan may have a $1 or $5 copay for generic medications and a $35 copay for preferred brand-name medications. Copay amounts vary from plan to plan.
Copays are more common, but Medicare Advantage plans can set coinsurance terms for some services. For example, you may need to pay 25 percent of the cost of brand-name drugs.
Medicare Advantage plans are required to set a ceiling on what you pay for covered medical services, called an out-of-pocket maximum.
Your plan pays all your covered costs for the rest of the plan period after you reach the out-of-pocket maximum.
Premium payments, drug costs and the cost of extra services a plan may cover, such as dental or vision care, don’t count toward the out-of-pocket maximum.
Medicare places a limit on how high a plan can set its maximum. Plan maximums may be lower than the federal limit. The federal limit in 2023 is $8,300. Medicare Advantage PPO plans, which cover out-of-network services but charge higher copays for them, have a federal out-of-pocket limit of $12,450 if you use a combination of in- and out-of-network services. In contrast, original Medicare has no out-of-pocket maximum, although people who buy Medigap supplemental insurance may not have to pay many of the out-of-pocket costs.
When should you sign up for Part C?
You can sign up for a Medicare Advantage plan during the seven-month initial enrollment period surrounding your 65th birthday after you’ve enrolled in parts A and B. Or you can decide to switch after you've been enrolled in traditional Medicare for a while.
During Medicare’s Oct. 15 to Dec. 7 open enrollment period each year, any Medicare participant can switch to, from or between Medicare Advantage plans as well as Part D plans. Because the new coverage begins Jan. 1, you can change your mind multiple times in that period.
Medicare Advantage participants have another chance to switch plans or go to original Medicare during the Medicare Advantage open enrollment period, which runs from Jan. 1 to March 31 each year. Coverage begins the first of the month after you change plans; it’s a one-time change until open enrollment starts again Oct. 15.
Be aware: If you decide to move from Medicare Advantage to original Medicare during one of those enrollment periods, Medigap supplemental insurance providers in many states may reject you or charge you more because of preexisting conditions. Because Medigap carriers may deny coverage or charge higher premiums in many states, it’s easier to go into a Medicare Advantage plan than go back to traditional Medicare’s full package.
Because Part C plans include the coverage found in parts A and B of Medicare, and often what’s in Part D prescription drug plans, you’ll need to determine the best time to sign up. That’s especially true if you or your spouse is still working and have health insurance through either of your jobs, a situation when you may want to delay paying for Part B.
Insurance you may have already, in addition to Medicare, may give you the equivalent of Part D or Medigap coverage and could figure into your decision on a Medicare Advantage plan. This includes a Medicaid program from a state, territory or the District of Columbia; a retiree health plan from a union or previous job; Tricare military health coverage; or U.S. Department of Veterans Affairs health benefits.
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