Medicare is a federal insurance plan. Medicare Part C combines the benefits of Part A and Part B. Medicare Part D covers prescription drugs.

Medicare Part A and Part B together form Original Medicare. Part A covers hospital costs, and Part B covers other medically necessary expenses.

Medicare Part C, also called Medicare Advantage, was signed into law in 1982. Its original name was Medicare+Choice.

The United States Congress added Medicare Part D in 2003 to cover outpatient prescription medications.

Medicare pays private companies a specific amount of money per person. In exchange, the insurance company bundles the benefits of Medicare Part A and Part B. Many companies also include Medicare Part D in their Advantage plan.

In this article, we discuss what Medicare Part C and Part D each include, who is eligible, and what the plans cost.

a senior woman getting helped out a hospital bed by a health professional which she'll have cover for on Medicare part c but not Medicare part dShare on Pinterest
A person with Medicare Part C has all the benefits of Medicare Part A and Part B.

All Medicare Part C plans must cover every benefit in Part A and Part B. Some policies offer more coverage, such as for vision, dental, and hearing care.

In general, Medicare Part A and Part B cover:

Medicare Part A Medicare Part B
inpatient hospital costs medically necessary services to diagnose and treat medical conditions
hospice care preventive services, such as flu shots and cancer screening
skilled nursing facility under certain conditions ambulance
nursing home care that is not custodial or long-term durable medical equipment
eligible home health services mental health services

Most Medicare Advantage plans work like a private insurance plan, and the options include Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), and private-fee-for-service (PFFS) plans.

Medicare usually sets both the fee that a provider pays and how much a person pays. For a PFFS plan, the insurance company sets these fees.

Insurance companies must follow the rules that Medicare sets. However, each plan can have different rules for out-of-pocket costs and how to get services. Insurance companies can change the rules in Medicare Part C plans each year.

Medicare Part D is a voluntary outpatient prescription drug plan that private insurance companies provide. Medicare approves the companies to provide the service.

People can choose to enroll in a stand-alone Medicare Part D plan or to bundle it with Medicare Part C.

If a person enrolls in a stand-alone Part D plan, they pay a monthly premium based on the expected cost to the insurance company. The individual pays approximately 25% of the cost of prescriptions, and Medicare Part D pays the last 75%.

If a person reaches the “catastrophic coverage” amount, they then pay 5% of the cost of prescriptions. This feature of the plan helps people with high out-of-pocket prescription expenses. In 2021, the out-of-pocket amount is $6,550.

Medicare Part C and Part D offer different benefits to people eligible for Medicare. It is important that people consider the benefits that they may need to cover their medical expenses.

Medicare approves the private insurance companies that sell Medicare. These companies help individuals manage the benefits of Part A and Part B under one policy.

Medicare Advantage plans may or may not include Medicare Part D prescription drug coverage. They may also include additional benefits, such as maximum out-of-pocket amounts.

Medicare Part D is a stand-alone prescription drug plan that private insurance companies contracted with Medicare sell. Individuals pay a premium for Medicare Part D to the private insurance company.

In general, a person must meet two requirements to be eligible for Medicare Part C. They must be enrolled in Medicare Part A and Part B and also live in an area where an insurance company offers Medicare Part C.

During a person’s Initial Enrollment Period, they are eligible for Medicare Part C. This 7-month window extends 3 months either side of the month in which a person turns 65.

People can switch to Medicare Part C after enrolling in Medicare Part A and Part B. They can do this during the annual Open Enrollment Period. This period runs from October 15 through to December 7 every year.

Medicare Part C has a different Open Enrollment Period, which runs from January 1 to March 31 each year. During this time, a person with Medicare Advantage can change policies. They can also leave Medicare Part C and go back to Medicare Part A and Part B, but they cannot:

  • enroll in Medicare Part C from Medicare Part A and B outside of the Open Enrollment Period
  • join Medicare Part D if they are enrolled in Medicare Part C
  • switch one Medicare Part D plan for another

However, these changes are possible during the annual Open Enrollment Period from October 15 to December 7 each year. Medicare Part D is available for everyone during their Initial Enrollment Period for Original Medicare.

The cost of Medicare Part C plans varies depending on the benefits that they include, as well as a person’s location, age, and gender. There is no penalty for late enrollment in Medicare Part C.

A person pays the premium for Medicare Part C to the private insurance company. They pay the premium for Medicare Part B to Medicare.

Medicare Advantage plans have a yearly out-of-pocket spending limit. If a person reaches the limit in a calendar year, the plan pays all medical expenses for the rest of the year. The insurance company will determine the cap on out-of-pocket expenses.

Medicare Part D costs include a premium, a deductible, copayments, and any late enrollment penalty. The company can charge a penalty when a person is without Medicare Part D for 63 continuous days or more after the Initial Enrollment Period is over. This rule applies to the stand-alone Medicare Part D plan or the prescription coverage that Medicare Part C includes.

The penalty will depend on how long a person went without prescription coverage. When people join a prescription plan, the insurance company will calculate the penalty and add it to the premium. Generally, this penalty forms part of the premium for as long as a person has a Medicare prescription plan.

Private insurance companies sell Medicare Part C and Part D. A person can find a company that sells a policy in their area by setting up a free account on the Medicare Plan Finder. Once they have logged in, the tool will show the Part C and Part D policies available in their zip code.

Not all plans work the same way. It is important that people take the time to compare the available plans in their area and understand the costs and rules. A person will fill out an application form for Medicare Part C or Part D.

They will need to give the insurance company their Medicare number and the date on which coverage began for Plan A, Plan B, or both. This information is on the Medicare card.

Medicare Part C combines the benefits of Medicare Part A and Part B under one plan. These plans can also offer additional benefits.

Medicare Part D is a prescription plan that some Medicare Part C plans include.

Private insurance companies offer Medicare Part C and Part D, but they must follow Medicare rules. The insurance company charges a premium for Part C and Part D, which a person pays directly to the company. They pay the premium for Medicare Part B to Medicare.

We will update the 2021 costs as soon as possible after the Centers for Medicare and Medicaid Services (CMS) have released them.


We last updated the costs on this page on October 12, 2020.

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