Medicare Part C is a bundled Medicare plan that incorporates hospital, medical, and prescription drug coverage for most people. It also covers additional services that traditional Medicare plans do not cover, such as dental, hearing, and vision care. However, coverage for these varies between plans.
Another name for these plans is Medicare Advantage. While they often provide more coverage than a traditional Medicare plan, people with Medicare Advantage must choose from a network of doctors and healthcare providers on whom Medicare and the plan providers have agreed. Receiving care outside these networks will be more expensive.
Medicare-approved private health insurance companies administer Medicare Advantage. They must follow the rules that Medicare have established, as Medicare sends over a fixed amount of money every month to fund an Advantage policy for an individual.
In this article, we explain the details of Medicare Advantage, as well as how it differs from traditional Medicare policies.
Health insurance companies offer thousands of Medicare Advantage plans. Their availability varies by region.
According to Medicare.gov, the plans usually fall into one of five categories.
- Health maintenance organization (HMO): To receive discounted treatment in an HMO plan, a person must receive care from a fixed network of healthcare providers. These doctors, clinics, and hospitals have agreed to provide discounted services to people who hold this plan. A person must often receive a referral from a primary care doctor for specialty medical care under an HMO plan. If an individual receives care from an out-of-network provider, they may have to pay full price.
- Preferred provider organization (PPO): PPO plans are similar to HMOs. A person saves money by choosing in-network providers. However, a PPO organization may also fund a portion of care for an out-of-network provider. Treatment under these plans does not usually require a primary care provider’s referral.
- Private fee-for-service (PFFS): People with PFFS plans have agreements with providers who accept Medicare. This agreement requires doctors to charge a specified amount for their medical services. Not all Medicare-approved providers accept these plans. Some PFFS plans may specify in-network doctors, while others do not.
- Special needs plans (SNPs): SNPs are plans that help those with specific chronic medical conditions. These people may use prescription medications and doctor services more regularly. Examples of medical conditions with SNPs include chronic heart failure, dementia, diabetes, end stage liver and kidney diseases, and HIV. All SNPs offer prescription drug coverage.
- Medical savings account (MSA): These plans combine a high-deductible insurance plan and a medical savings account. A person with this plan has a high deductible. They can use money from their MSA to help fund healthcare costs before needing to meet their deductible. This means that a person can fund medical expenses before insurance pays. Many MSA plans allow a person to seek care from any provider they choose.
Not every plan is available in every region. As a general rule, areas with bigger populations have a greater variety of plans available.
It can be difficult to provide average costs for Medicare Part C, as there is a wide range of plans available. Different personal circumstances, such as income and a history of paying Medicare taxes, also inform the cost of a policy.
A Medicare Advantage plan has its own premium, which can sometimes be zero dollars. According to the Kaiser Family Foundation (KFF), the average monthly Medicare Advantage premium is $25. However, some plans have monthly premiums that exceed $200.
Each plan requires individuals to meet a specified amount of out-of-pocket costs before their plan starts paying for healthcare services. This can sometimes amount to thousands of dollars.
According to a University of Pennsylvania Wharton School public policy issue brief, a person with a specific Medicare Advantage plan in Philadelphia County, Pennsylvania, paid an average yearly out-of-pocket sum of $3,950.
This is less than the $6,180 that people with traditional Medicare paid in out-of-pocket costs across the same region.
The out-of-pocket figure is the amount of a money a person can expect to spend on top of their premium for medical costs.
Some people may enjoy significant cost savings when using Medicare Advantage, depending on where they live.
Eligibility for Medicare Part C plans depends upon the following criteria:
- Geographic area: Medicare advantage plans are typically unavailable or less available in geographic regions with a lower population, such as Alaska and Wyoming. People in larger cities often have the most plans available to them.
- Medical conditions: To qualify for a special needs plan, a person must have the medical condition the plan covers.
Medicare’s website allows a person to search for available Medicare Advantage plans in their area. A person can enter their zip code and see a listing of available plans.
Medicare Part C plans and traditional Medicare policies are different. Part C bundles services together, and depending on the plan, may offer more services than traditional Medicare, including dental, vision, and hearing care.
People should check their individual plan to see what it covers on top of traditional Medicare. Companies offer many different plans.
- If a person uses traditional Medicare, they pay Medicare directly, and Medicare pays out for their services.
- Medicare Part B: A person pays their Medicare Part B premium directly to the government.
- Medicare Part C: People with Part C pay a private insurance company.
- Medicare Part D: Medicare Part D is the traditional portion of Medicare that pays for prescription drug coverage. A person can select from several plans and pay a monthly premium directly to the government.
- Medigap: Medigap insurance can help a person pay for co-payments and deductibles, as well as other out-of-pocket expenses.
Some people prefer the freedom of choosing their own providers and specialists that can come with traditional Medicare.
Medicare Part C, or Medicare Advantage, is an alternative to traditional Medicare. When a person chooses Medicare Advantage, they can select a plan that provides additional services Medicare does not cover.
Plan availability varies by geographic area, and a person must consider availability, coverage, and cost when selecting the best Medicare Advantage plan for them.
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 13, 2020.
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