Ron Elledge is a seasoned Medicare consultant and author of “Medicare Made Easy.” As a Medicare expert, he regularly consults beneficiaries on Medicare rules, regulations, and strategies.
Medicare Advantage, also known as Medicare Part C, is a part of Medicare, which is the federal healthcare plan for the following groups:
- Individuals 65 and older
- Individuals younger than 65 with qualifying conditions
To understand what Medicare Part C is, it’s helpful to first understand what Medicare is. Medicare, which may also be referred to as Original Medicare, consists of two parts, Part A and Part B:
Part A (hospital insurance) covers:
- Inpatient hospital stays
- Care in a skilled nursing facility
- Hospice care
- Some home healthcare
Part B (medical insurance) covers:
- Outpatient care
- Preventative care
- Certain doctors’ services
- Medical supplies
Prescription drug coverage, also known as Part D, is provided by private insurers and provides prescription drug plans (PDP) to individuals on Medicare.
Medicare Part C, or Medicare Advantage, offers the benefits of Original Medicare Parts A and B. Medicare Advantage Plans bundle Medicare Part A, Part B, and usually Part D. These plans cover the same care and services as Part A and Part B, but may also include coverage for additional services like dental, vision, and auditory care.
When you have health insurance under Medicare Advantage, the insurance company pays for the services, not Medicare. Because Medicare Advantage Plans are underwritten by insurance companies, they can offer certain features Original Medicare cannot, such as out-of-pocket spending caps.
Whether you stay with Original Medicare or add a Medicare Advantage Plan depends on your unique circumstances, healthcare needs, and budget. Read on to learn about Medicare Advantage Plans, providers, benefits, and eligibility criteria.
Who is Eligible for Medicare Part C?
If you’re eligible for Original Medicare, you’re eligible for Medicare Advantage. Individuals who are 65 and older are eligible for Medicare, as are individuals younger than 65 with qualifying conditions. If you already have Medicare Part A and Part B, you are most likely eligible for Medicare Part C. You can also use Medicare’s online tool to determine your eligibility for Medicare. Note: individuals who have Medicare Supplemental Insurance, also known as Medigap, cannot enroll in a Medicare Advantage Plan unless they drop their Medigap coverage.
What Does Medicare Part C Cover?
While Original Medicare plans have fixed costs for premiums, deductibles, and coinsurance, the costs associated with Medicare Advantage Plans vary based on the insurance provider and plan.
When it comes to the cost of Medicare Part C plans, there are a few other things to keep in mind. Many Medicare Advantage Plans do not have deductibles, but those that do can vary widely. Regardless of the deductible, most Medicare Advantage Plans use copayments or coinsurance.
Copayments tell you upfront how much you’ll pay after you meet your deductible. Coinsurance, what you pay out-of-pocket beyond the deductible, depends on the overall cost of the service provided. Many Medicare Advantage Plans use deductibles for prescription drug coverage.
Also, Medicare Advantage plans, unlike Original Medicare plans, have an out-of-pocket spending cap. Once you reach that limit for the year, all other costs for Part A and Part B services will be 100% covered.
How Does Medicare Part C Work?
If you enroll in a Medicare Advantage Plan, you will have a few different types of plans to choose from. The exact availability of plans will depend on the health insurance provider and your geographic location. Some of these plan types may be familiar to you if you previously had private health insurance through an employer. Your needs will ultimately determine which type of plan is right for you.
A Health Maintenance Organization (HMO) plan gives users access to certain doctors and hospitals within its network. This provider network agrees to give HMO customers lower rates. However, if you visit a non-network provider, it will likely not be covered. You will have to pay those fees out of pocket. With some Medicare Advantage HMO plans, out-of-network exceptions may be made for emergency care, out-of-area urgent care, and out-of-area dialysis.
Medicare HMO Plan Key Facts
|Overview||Some HMO plans have a Point-of-Service (POS) option, which lets customers go out-of-network for certain services, although in-network services may be less expensive. HMO plans usually offer benefits not included in Original Medicare, although these benefits may cost extra.|
|Prescription Drug Coverage?||Prescription drugs are typically covered with HMO plans, but confirm with the plan. If you choose an HMO plan without drug coverage, you will not be allowed to join a stand-alone Part D plan.|
|Primary Care Doctor?||For most HMO plans, you must choose an in-network primary care doctor.|
|Referrals?||In most cases, you must have a referral to see a specialist, although certain services (like yearly mammogram screenings) do not require a referral.|
|Out-of-Network Care?||If you get healthcare outside of your plan’s network, you may be responsible for the full cost of the services.|
A Preferred Provider Organization (PPO) plan works similarly to an HMO. There is a network of approved providers, but customers have more flexibility to go outside of that network for care. Additionally, a PPO plan may cover some of the cost if you see a non-network provider. Compared to HMO plans, a PPO plan may have a higher premium and deductible.
Medicare PPO Plan Key Facts
|Overview||PPO plans usually offer additional benefits not included with Original Medicare plans, although these benefits may cost extra.|
|Prescription Drug Coverage?||Prescription drugs are typically covered with PPO plans, but confirm with the plan. If you choose a PPO plan without drug coverage, you will not be allowed to join a stand-alone Part D plan.|
|Primary Care Doctor?||You do not need to choose a primary care doctor with a PPO plan.|
|Referrals?||In most cases, you do not need to get a referral to see a specialist with a PPO plan. However, if you use in-network specialists, your costs will be lower than using out-of-network specialists.|
|Out-of-Network Coverage?||With a PPO plan, you can go to in-network or out-of-network healthcare providers, although the out-of-network providers will typically cost more.|
Medicare Private Fee-For-Service (PFFS) plans offer flexibility, in that they do not require primary care doctors or referrals. However, because of the way PFFS plans’ reimbursement structure works, doctors and other healthcare providers may choose not to accept patients with a PFFS plan. With a PFFS plan, the insurance company determines how much it will pay doctors and healthcare providers, and how much the customer will pay within the limits set by CMS.
Medicare Plan PFFS Key Facts
|Overview||Doctors, hospitals, and other healthcare providers can decide on a case-by-case basis whether to accept your PFFS plan.|
|Prescription Drug Coverage?||It depends on the plan. If your plan does not include prescription drug coverage, you can get coverage through Medicare Prescription Drug Plan Part D.|
|Primary Care Doctor?||You do not need to choose a primary care doctor.|
|Referrals?||You do not need referrals to see specialists.|
|Out-of-Network Coverage?||Depending on the PFFS plan, there may be a network of healthcare providers who have agreed to always treat plan members. In that case, they must accept you for treatment and their charges will be lower than out-of-network providers. Other plans may not have a network, but allow customers to get care from any doctor or healthcare provider who accepts the plan’s terms.|
Special Needs Plans (SNP) are specifically designed for people with specific diseases or characteristics. These types of plans allow users to tailor their benefits, provider choices, and drug formularies to best meet their needs. Eligibility for SNPs is restricted, compared to HMO and PPO plans that are open to anyone who meets the basic eligibility criteria for Medicare. The availability of Medicare SNPs varies by location.
Medicare SNP Plan Key Facts
|Overview||Medicare SNPs are required to cover the same Medicare services as all Medicare Advantage plans, but also include extra services tailored to the specific needs of the customers they serve, based on their conditions.|
|Prescription Drug Coverage?||All SNPs provide Medicare prescription drug coverage.|
|Primary Care Doctor?||In most cases, an SNP will require that you have a primary care doctor, or a care coordinator to help oversee your healthcare.|
|Referrals?||In most cases, an SNP will require that you get referrals for specialist care, although certain services, like yearly mammogram screenings, are exempt.|
|Out-of-Network Coverage?||Generally, SNP members must get care from doctors or hospitals in the Medicare SNP network, although certain services, like emergency or urgent care, and out-of-area dialysis for ESRD patients, are exempt.|
A Medicare Medical Savings Account (MSA) is similar to a Health Savings Account (HSA). This type of plan combines a high-deductible insurance plan with a medical savings account that customers can use to pay healthcare costs. Medicare provides the money that goes into your medical savings account. Once you reach your deductible, the plan will pay for your Medicare-covered services. However, if you run out of money in your medical savings account before you reach your deductible, you must pay the difference for healthcare costs out-of-pocket.
Medicare MSA Plan Key Facts
|Overview||Unused funds in your medical savings account roll over from year to year.|
|Prescription Drug Coverage?||Medicare MSA plans do not include prescription drug coverage. Customers must join a Medicare Part D prescription drug plan for this type of coverage.|
|Primary Care Doctor?||Dependent on the individual plan.|
|Referrals?||Dependent on the individual plan.|
|Out-of-Network Coverage?||Dependent on the individual plan.|
How to Apply for Medicare Part C
First, you must be enrolled in Original Medicare Parts A and B before you can enroll in a Medicare Advantage Plan. Those eligible to enroll in Original Medicare include:
- Individuals turning 65: The Initial Enrollment Period (IEP) is the three months prior to turning 65, the month you turn 65, and the three months after you turn 65.
- Individuals under 65 with a disability and receiving disability payments through Social Security or the Railroad Retirement Board.
- Individuals with End-Stage Renal Disease (ESRD)
For most people, Medicare Advantage Plan enrollment occurs at the same time as their Initial Enrollment Period to Original Medicare. That said, there are additional enrollment periods throughout the year to be aware of:
- Annual Enrollment Period (October 15 to December 7): During this period, a person on Original Medicare with no Advantage plan can enroll in an Advantage plan, or those currently enrolled in an Advantage plan can switch to another Advantage plan or return to Original Medicare.
- Medicare Advantage Open Enrollment Period (January 1 to March 31): During this period, those currently enrolled in a Medicare Advantage plan can switch plans or return to Original Medicare. Those on Original Medicare cannot join an Advantage plan during this period.
- General Enrollment Period (April 1-June 30): This period is for enrollment in Original Medicare for those who missed their Initial Enrollment Period (IEP). Enrollment in Medicare Advantage can coordinate with this period.
You may face penalties if you don’t sign up for Medicare benefits during these time frames. There are exceptions if you’re actively employed and receiving health insurance from your employer or involved in qualified overseas volunteerism. If you are approaching age 65 and are still working, consult with your employer to find out if your coverage will continue, or if you will need to switch to a Medicare plan. You will also be able to join Original Medicare or Medicare Advantage during a special enrollment period if your employment situation changes.
Again, because Medicare Advantage Plans are offered by individual insurance companies, the enrollment processes will differ depending on the carrier. Generally, you can follow the steps below to enroll in a Medicare Advantage plan:
- Visit Medicare’s Plan Finder to find available plans in your area.
- Comparison shop plans based on your needs and budget.
- When you select your plan, follow their instructions for completing an enrollment application. Many plans will allow you to fill out the application online, although all plans are required to offer an option for a paper enrollment form.
When you sign up for a Medicare Advantage Plan, you will need to provide your Medicare number, as well as the date your Medicare Part A and Part B coverage began.
Should I get Medicare Part C?
Whether you should enroll in a Medicare Part C plan depends on a variety of factors that are unique to you. Keep in mind that it’s possible to switch Medicare Advantage plans during enrollment periods if you find your current plan does not meet your needs.
Here are some things to consider when deciding if Medicare Part C is right for you:
|Original Medicare||Medicare Advantage|
|Administrator||The federal government||Private insurance companies|
|Coverage||— Medical costs
— Hospital costs
|— Medical costs
— Hospital costs
— Many cover prescription drugs
— May also include dental, vision, and hearing
|Premium||— No premium for Part A if you or your spouse meet certain criteria
— If you do not meet the criteria, the Part A monthly premium ranges from $259 to $471 per month in 2021
— Standard Part B premium is $148.5 in 2021
|— Premium amounts vary by plan; contact your insurance provider for more information|
|Deductible||— Part A deductible: $1,484 per benefit period
— Part B deductible: $203 per year
|— Deductible amounts vary by plan; contact insurance provider for more information|
|Out-of-pocket costs||— No spending caps on out-of-pocket costs
— Limit on number of days covered for hospital stays and skilled nursing facilities
|— Spending caps on out-of-pocket costs|
|Coinsurance vs. copayments||— Uses coinsurance; customers pay a percentage of the total cost of care.
— Out-of-pocket costs fluctuate based on the cost of the service provided; on average, you’ll pay 20% of all Medicare-covered services.
|— Uses copayments and coinsurance; customers will have set prices for different types of care and services provided
— Out-of-pocket costs are fixed, regardless of the cost of the service provided
|Network||— No networks. Customers can go to any doctor, hospital, or healthcare provider that accepts Medicare.||— Most, but not all, plans have a network of providers that customers must use. Using an out-of-network doctor or hospital can result in higher out-of-pocket costs.|
|Travel||— With few exceptions, does not cover any services, even emergency care, that are administered outside the U.S.||— Some plans may offer coverage for emergency care that customers receive outside the U.S.|
How to choose the best Medicare Advantage Plan for your needs
Step 1: Find plans available in your area
The Medicare Advantage Plans available to you depend on where you live. The best place to start your selection process is the Medicare Advantage Plan Finder Tool where you can see your options.
Once you enter your zip code and answer a few questions, the Plan Finder will show you all the available Medicare Advantage Plans in your area.
Step 2: Identify your healthcare needs and priorities
Identify your specific needs and priorities when shopping for plans. The following questions can help you determine what your health care needs and priorities are:
- How is your overall health? Do you have chronic conditions that require specialists’ care and medications, or are you generally healthy and just need routine preventive care?
- What prescription drugs do you currently take?
- Do you want or need a plan that includes dental, vision, and/or hearing coverage?
- Do you want or need a plan that includes services like fitness memberships, ambulance services, coverage outside the U.S., and other perks?
Step 3: Determine your budget
Medicare Advantage plan costs can vary widely based on your state, the plan provider, plan type, and plan benefits.
Costs associated with Medicare Advantage Plans include premiums, deductibles, copays, and coinsurance. For plans that include prescription drug coverage, you’ll pay additional deductibles, copays, and coinsurance costs. All plans of out-of-pocket spending limits.
The Plan Finder Tool lets you sort plans based on lowest monthly premium, drug deductible, health plan deductible, and drug and premium cost.
Expert Tip: If you aren’t up to the task of digging through plans on your own, find a qualified Medicare broker or agent to help you navigate your choices. Find one with at least two to five years of experience with Medicare insurance and be sure they are contracted to sell multiple plans available in your area, which allows them to work for you. In most cases, there is no charge for a broker’s services, but always check before scheduling an appointment.
Step 4: Look for networks that include your doctors
When you are looking at plans through the Plan Finder Tool, you will be able to view a directory of in-network providers for each individual plan. If you already have doctors that you would like to continue seeing, verify they are within the plan’s network of providers so you can avoid paying out-of-network costs to see them.
Step 5: Decide which kind of plan you want
Medicare Advantage offers several different types of plans, including HMO, PPO, PFFS, SNP, and MSA plans. Price, services, and networks will all vary by plan. Whether your doctors are in-network or out-of-network may also influence your decision of which type of plan works best for you.
Step 6: Compare ratings for plans
The Centers for Medicare and Medicaid Services (CMS) does an annual review of Medicare Part C and Part D plans. Plans are scored on a five-star scale. These scores can help you assess the quality of plans you are considering. The CMS Five-Star Rating System evaluates plans on the following points:
- Availability of health screenings, tests, and vaccines
- Management of chronic health conditions
- Member experience with health plan
- Plan performance and member complaints
- Customer service availability and experience
- Drug pricing, safety, and accuracy
Each plan receives a score for each of these categories, an individual star rating for Part C and Part D, and an overall score. Checking these scores can help you confirm the quality of the plan you select.
Step 7: Select a plan, and follow instructions for enrollment
Once you have found a plan that works for your needs and budget, follow the provider’s instructions for enrollment. This typically involves completing an online or paper enrollment form. Remember, if you have questions about a plan or its coverage, you should contact a representative to get all your questions answered before signing up for a Medicare Advantage Plan.
Highly-Rated Medicare Advantage Plans
|Aetna||All 50 states|
|Cigna||AL, AR, AZ, CO, DE, FL, GA, IL, KS, MD, MO, MS, NC, NJ, PA, SC, TN, TX, District of Columbia|
|Highmark||DE, PA, WV|
|Humana||All 50 states, District of Columbia, and Puerto Rico|
|Kaiser Permanente||CA, CO, GA, HI, MD, OR, VA, WA, District of Columbia|
|UnitedHealthcare||All 50 states, District of Columbia, and U.S. territories|
Medicare Advantage Plan availability varies within individual states. To confirm which companies provide plans in your area, see the Medicare Plan Finder, contact the company directly, or visit their website and search by your zip code. Plan availability can change each year.
Aetna is a comprehensive health insurance provider that serves customers throughout the U.S. Their Medicare Advantage Plan offerings include HMO, HMO-PPS, PPO, and SNP plans. Most plans include dental, vision, and hearing care, as well as extra benefits like prescription home delivery, SilverSneakers® fitness membership, and 24/7 teleaccess to nurses.
Cigna’s Medicare Advantage plans include a variety of programs and services, including behavioral health, case management preventative care, and discounts for health and wellness programs. Several low-premium plans are available. Cigna customers get access to a holistic, team-based approach to healthcare, in which Cigna’s case managers and pharmacists work closely with doctors and specialists to create successful healthcare and treatment plans. Cigna plans are available in 18 states, plus the District of Columbia. Exact plan types vary by location.
Although Highmark‘s Medicare Advantage availability is limited to a few Mid-Atlantic states, it is an option worth considering if you’re in the service area. You can choose between an HMO or PPO plan. All Highmark plans come with exclusive benefits like on-call registered nurses for 24/7 care, a once-a-year house call from a licensed healthcare provider, as well as a home visit program for those dealing with serious medical conditions, and SilverSneakers® fitness memberships.
With availability in all 50 states, the District of Columbia, and Puerto Rico, Humana is one of the most flexible Medicare Advantage providers. Humana offers several Medicare Advantage options, including HMO, PPO, PFFS, and SNP plans, which meet a range of customer needs for affordability, flexibility, and scope of care. Many Humana plans include routine dental, vision, and hearing care. Customers can also take advantage of Humana’s pharmacy plan for discounts and mail-delivery service.
Kaiser Permanente‘s highly-rated Medicare Advantage HMO plans are available mainly to customers on the West Coast, although they do offer plans in some Mid-Atlantic and Southern states as well. A number of plans have $0 co-pays for preventive care services, and prescription drug coverage is included with all plans. Customers can choose to add dental, hearing, and vision benefits as well. Another benefit of Kaiser Permanente is their extensive network of doctors and specialists.
Another health insurance provider that operates in all 50 states and U.S. territories, UnitedHealthcare offers its Medicare Advantage members a variety of benefits. These include $0 co-pays on primary care doctor visits, as well as common prescriptions; free preventive dental and vision exams, 24/7 virtual telehealth visits, and gym memberships. UnitedHealthcare offers HMO and SNP plans, as well as supplemental insurance and Medicare Part D prescription drug coverage.
Learn More From Our Sources
- Medicare | Who is eligible for Medicare?
- Medicare | What Part A covers
- Medicare | What Part B covers
- Medicare | Estimate my Medicare eligibility and premium
- Medicare | What’s Medicare Supplement Insurance (Medigap)?
- Medicare | Medicare costs at a glance
- HealthCare.gov | Coinsurance
- HealthCare.gov | Copayment
- HealthCare.gov | Deductible
- Medicare | HMO
- Medicare | PPO
- Medicare | PFFS
- Medicare | SNP
- Medicare | How Medicare Special Needs Plans Work
- Medicare | MSA
- Medicare | How to join a Medicare Advantage Plan
- Medicare | Find a Medicare plan
- CMS | Part C and D Performance Data