A User Guide to Medicare Part C: Everything You Need To Know
- Medicare Part C is also known as Medicare Advantage
- Medicare Part C includes all of the benefits included under Original Medicare (Medicare Parts A and B), and often has other benefits included
- Generally, anyone eligible for Original Medicare can enroll in a Medicare Advantage plan
- Medicare Part C plans can decrease the out-of-pocket expenses that are commonly associated with Original Medicare. Part C plan premiums can start as low as $0 per month.
- The two types of costs associated with Medicare Part C are premium costs and expenses for certain services and procedures
What Is Medicare Part C and How Does It Work?
Americans are enrolling in Medicare Part C in growing numbers. Part C combines Original Medicare Part A and Part B, and usually includes Part D prescription drug coverage in addition to extras such as hearing, dental, and vision coverage.
Part C, also known as Medicare Advantage, is offered by private insurance companies that contract with Medicare to provide Part A and Part B benefits, in addition to other offerings depending on the company.
You can be confident that when you are enrolled in a Part C plan, the following expenses will be covered:
- Inpatient hospital services
- Skilled nursing services
- Outpatient services, such as doctor appointments, lab work, and outpatient surgeries
These are the basic coverages that Original Medicare Parts A and B provide, but in addition to these benefits, many Medicare Advantage plans also cover prescription drugs. These plans are referred to as Medicare Advantage prescription drug plans (MAPDs).
Another valuable benefit of Part C plans is that they usually provide coverage outside the United States. So, if you are vacationing out of the country, you will be able to have peace of mind knowing that your emergency coverage comes with you.
Medicare Advantage plans are not required to provide any of these extra benefits, besides the out-of-pocket maximum.
What Does Medicare Part C Cover and Why Do I Need it?
A primary reason you might consider selecting a Medicare Part C plan is because it can decrease the out-of-pocket expenses that are commonly associated with Original Medicare. Another reason to select a Part C plan is because you may receive additional benefits and coverage not found under Original Medicare.
For instance, many Medicare Advantage plans offer at least some form of:
- Out-of-pocket maximum protection
- Vision coverage
- Hearing coverage
- Fitness benefits
- Transportation to medical appointments
- Basic dental coverage (often for an additional premium)
- Non-traditional care, such as acupuncture and chiropractors
Medicare Advantage plans are not required to provide any of these extra benefits, besides the out-of-pocket maximum. However, most of them choose to do so in order to attract more members.
Original Medicare does not cover any of these above items. So, if you need these types of services, your out-of-pocket costs could become quite high. Supplemental insurance, like individual dental, can also be expensive, and such coverage often has very few annual maximum benefits.
- Part A deductible ($1,408 for 2020)
- Part B deductible ($198 for 2020)
- Part B coinsurance (20% of the Medicare-approved cost for every Part B service or procedure)
- 100% of the cost of prescription drugs
- 100% of the cost for emergency coverage outside the United States
Original Medicare doesn’t put a cap on your annual costs. In other words, there is no out-of-pocket maximum limit. Unlike with health insurance provided by your job, you could potentially pay an unlimited amount for healthcare coverage in any particular year.
What Is Not Covered By Medicare Part C?
With the exception of the extra benefits described above, Part C plans generally do not cover anything that Original Medicare would not cover, such as cosmetic surgeries or experimental treatments.
The one restriction is that Part C plans can deny you coverage if you have end-stage renal disease (ESRD).
Who Is Eligible for Medicare Part C?
Generally, anyone eligible for Original Medicare can enroll in a Medicare Advantage plan.
For most people this means that you are:
- Age 65 or older
- A US citizen or permanent legal resident, who has lived in the country legally for five or more years
In addition to the above criteria, you must also be actively enrolled in both Part A and B of Original Medicare.
If you satisfy these conditions, you are eligible to enroll in a Medicare Advantage plan.
The one restriction is that Part C plans can deny you coverage if you have end-stage renal disease (ESRD). If you have ESRD, you may be able to enroll in a special kind of Part C plan called a Chronic Condition Special Needs Plan (C-SNP). Some C-SNPs are designed specifically for patients with ESRD.
How Much Does Medicare Part C Cost?
There are two types of costs associated with Medicare Advantage:
- Premiums for coverage
- Costs for covered services and procedures
You must remain enrolled in both Part A and B in order to receive Medicare Advantage coverage. Most people qualify for premium-free Part A based on their work history. If you qualify for Social Security, you will likely qualify for Part A without paying an additional premium.
Premiums for Coverage and Costs for Services and Procedures
When you enroll in Part B, you will have to pay a premium. For 2020, the basic monthly premium is $144.60, though people with higher incomes can expect to pay more.
If you qualify for your state’s Medicaid program, you may get help with some of your Part B premium.
When you use your Medicare Advantage plan to see a doctor or stay in the hospital, you will still have to pay some out-of-pocket costs. These costs can include:
- Annual deductibles
Note that all Medicare Advantage plans have some element of cost-sharing, which comes via copayments or coinsurance. However, many do not have an annual deductible. In this case, the plan pays enrollees their benefits right away.
Your out-of-pocket costs with Medicare Advantage differ from those of Original Medicare. They are usually smaller than what you would pay under Original Medicare, and the total costs are also capped each year.
Medicare Advantage plan coverage is similar to employer health insurance. For instance, Part C plan copays, coinsurance, and deductibles are generally much lower than individual private health insurance.
Choosing a Medicare Part C Plan
Medicare Part C offers many useful benefits. You may find that it caps your out-of-pocket costs for health insurance. Medicare Advantage plans also provide you with benefits not offered by Original Medicare.
If you think Part C is right for you, you might consider connecting with a professional who can help you review the available plans in your area and compare their benefits as a part of your research process.