Do you have questions about Medicare part C? Medicare breaks down into four different parts. Original Medicare includes Part A and Part B, but there’s also Medicare Part C, which is known as Medicare Advantage. Medicare Part D is prescription drug coverage.
Medicare Part C is one of the better plans to go with if you’re in need of healthcare and want a more affordable, government-sponsored option that provides more than what original Medicare offers. There are various plans that qualify as Medicare Advantage. But you need to understand how these plans work in order to get the best plan for your healthcare needs and budget.
Medicare Advantage is different from original Medicare (Parts A and B), but it still provides you with the same services, facilities and access to doctors you would receive if you had traditional Medicare. There are different plan types for Medicare Advantage. HMO plans are the most popular, but there are also PPO, PFFS and Special Needs Plans.
This guide will walk you through Medicare Part C so that you can pick a plan that works for you during open enrollment this year, which starts on October 15.
What is Medicare Part C?
Medicare was created as a way to provide basic healthcare needs to senior citizens and those with certain disabilities who could not afford private health insurance. Parts A and B form original Medicare. Medicare Part C, which is also called Medicare Advantage, is a combination of A and B with various extras depending on plan type. Part C is sold through private companies, but it’s also partially sponsored by the government. If you want all the benefits and features of original Medicare with added services and coverage, then Medicare Advantage can be a great choice.
Medicare Part C plans have to offer at least the same services as you would find in Medicare Parts A and B. Medicare Advantage plans typically cover prescription drugs as well, but it’s not a guarantee. Check with the plan ahead of time to make sure.
You may be enrolled in Medicare Advantage plans with a private company, but you are still a part of Medicare and can take advantage of Medicare rights and protections. This means that you can’t be denied coverage, and preventive care must be included in the basic services of any Medicare Advantage Plan.
Before the Affordable Care Act was signed into law, insurance companies could deny applicants based on a variety of factors, including sex, health status and age. These and other factors are now protected under the ACA. The National Women’s Law Center offers an overview of the nondiscrimination section of the new health care law. Suffice it to say that you’re now protected under the law from being denied coverage based on certain factors, like your age and race. Since Medicare Advantage plans are federally funded in part, they have to abide by this law.
What is covered under Medicare Part C?
Medicare Part C plans have the benefit of being administered by private companies, which means that they can add more services. As a rule, these plans must offer the same coverage as you would receive under original Medicare. Certain services must be covered, which include the following:
- Hospital stays
- Home healthcare
- Skilled nursing facilities
- Part A benefits, except hospice care
- Doctor’s visits
- Outpatient care
- Lab tests
- All benefits of Part B
Most Medicare Advantage plans do not offer hospice care, which is available under original Medicare. The same goes with prescription drug coverage. While many plans will include this benefit, they do not have to include Part D in any plan. You can still purchase Part D separately if you want prescription drug coverage. Vision, dental and hearing care may be included, but these are considered extras. Premiums may be higher with added services, like wellness programs, nurse helplines and dental care.
When you look at a plan’s benefits, check for extra services as well as the plan’s rating. Many higher-rated plans will feature additional benefits along with a higher customer satisfaction rating. Medicare keeps track of Advantage plans and rates them based on different factors, with 5-star plans being the best. The Medicare Plan Finder tool lets you find and compare plans with good scores so that you know what you’re buying ahead of time.
Not every insurer offers Medicare Advantage plans, and some companies don’t offer them upfront to qualified beneficiaries. If you want an MA plan, you’ll have to ask. Make sure you find out ahead of time what the plans cover and what the costs are so there aren’t any surprises down the road.
What isn’t covered in Medicare Advantage Plans?
While Medicare Part C must cover the same services as original Medicare, it doesn’t have to provide coverage for hospice care. But even if your plan doesn’t cover this, it’s still included as part of your Medicare coverage. That’s because you’re still technically enrolled in Medicare when you have a Medicare Part C plan. You can still have Medicare Advantage and continue to receive hospice care through original Medicare.
Medicare Advantage plans will take care of all benefits that aren’t related to your hospice care. Some plans may include extras, like vision and dental, but these benefits are not required by law. They’re considered extra costs and may only be available in certain areas.
Each plan has different limits as well. To ensure that you find the best plan, it’s important to compare as many options as you can to see which plan works best for your health care needs.
How much does Medicare Advantage cost?
Medicare still costs money even though it’s funded through the government via taxes. The government sponsors Medicare Part C, and extra services may be included in the plan, which can drive up costs. In general, costs break down as follows:
- Under Medicare Part C, you must qualify for Part A and Part B, which means that you must at least pay a Part B premium. In 2017, the standard Part B premium is $134 per month for new beneficiaries. This is expected to increase in 2018.
- The cutoff amount for the standard premium is an income of $85,000 or less per year. If you have a higher income, you will generally pay a higher premium.
- The deductible is $183 per year in 2017, which may rise in 2018.
- You also pay a 20 percent coinsurance or 20 percent of all medical costs after meeting the deductible for Part B.
- Medicare Part C has additional costs, which mean that you pay a monthly premium for it as well. These premiums vary but can be as low as $46 per month. The Centers for Medicare and Medicaid Services (CMS) announced that MA premiums for 2018 would average out to about $30 a month, a decrease over 2017.
While premiums typically increase each year no matter what kind of health insurance you have, Advantage premiums are actually expected to decrease slightly in 2018. The added costs of Medicare Part C are in proportion to the extras that you receive for a private health insurance plan. Most plans include prescription drug coverage, vision and dental, as well as wellness programs and hearing care.
How flexible are Medicare Advantage Plans?
Most private health insurance companies that offer Medicare Part C do their best to give members multiple choices when it comes to plans, but certain plans are only available in specific service areas. This means that not all plan types may be available throughout the country, especially in rural areas. In these cases, you may want to go with original Medicare if you can’t find the plan that you want. Most companies will offer different types of plans, including:
- Medicare HMO – Health Maintenance Organization
- Medicare PPO – Preferred Provider Organization
- Medicare PFFS – Pay-Fee-For-Service
- Medicare SNP – Special Needs Plans
The most flexible of these plans is likely the PPO, which does not require you to pick a primary care provider or stay within network. In general, PPOs charge a higher fee when you go out of network and may have a higher monthly cost than an HMO. These plans do allow you to go out of network, which is beneficial if you have a chronic health condition or need to see a special doctor. If you already have a primary care doctor you like, a PPO may also be the best option.
PFFS plans are also flexible, but these plans are not accepted everywhere. In addition, there are not many PFFS plans available in regions throughout the United States. While you can see any doctor or go to any facility, the doctor or facility must recognize and accept your plan before choosing to admit you. That could be an issue if you don’t speak to your doctor first about the type of insurance that you have.
An HMO is not a flexible option. For one, you have to pick a primary care provider, and you can’t see doctors or facilities outside of the network. You also need a referral to see a specialist. If you have to get urgent care, you need to make sure that your facility is in your network or else you will pay out of pocket.
SNPs are only for individuals with specific illnesses and disabilities. It’s the least flexible plan, but it is designed to provide the best care for individuals who need specific treatments and services. This plan requires individuals to have a primary care provider and referrals to see a specialist.
How to enroll in Medicare Advantage
Signing up for Medicare is an important step to saving money on your health insurance every year. With Medicare Advantage, you can still get plans for zero or little cost per month, but they are sold through private health insurance companies. You can enroll in Medicare Advantage during your initial eligibility period for Medicare as well as during Open Enrollment Periods (OEPs). The following section discusses how to sign up and what to understand about these enrollment periods.
When can you sign up for Medicare Advantage?
There are specific times during the year when you can sign up for a Medicare Advantage plan. These are HMO and PPO plans or Part D coverage plans that you can sign up for with a private health insurance carrier. In addition, you can only make changes to your coverage during certain parts of the year. Initial enrollment periods are as follows:
|If you’re…||And you want to…||You can do it…|
|Turning 65 for the first time||Enroll in a Medicare Advantage plan for the first time||During the 7-month period surrounding your 65th birthday (three months before you turn 65, the month you turn 65, and three months after you turn 65)|
|Under 65 and disabled||Enroll in a Medicare Advantage plan for the first time||Beginning 21 months after you start receiving SSI or Railroad Retirement benefits and ending the 28th month you get those benefits|
|Already enrolled in Medicare due to disability and you turn 65||Enroll in a Medicare Advantage plan for the first time -OR-
Switch from one MA plan to a different one -OR-
Drop your Advantage plan entirely
|During the 7-month period surrounding your 65th birthday (three months before you turn 65, the month you turn 65, and three months after you turn 65)|
|Already enrolled in Medicare Part A but sign up for a Part B plan for the first time during the Part B general enrollment period (Jan. 31 through March 31)||Enroll in a Medicare Advantage plan for the first time||From April 1 through June 30|
The above table is for initial enrollment periods. There are other times when you can make changes to your Medicare Advantage plans or enroll in an MA plan from an existing original Medicare plan. Alternate enrollment periods are as follows:
|Enrollment Period||What You Can Do|
|October 15 through December 7||Switch from original Medicare to Medicare Advantage
Switch from an MA plan back to original Medicare
Switch to a new MA plan from an existing MA plan
Change from a Medicare Advantage plan without drug coverage to one that does offer drug coverage
Change from a Medicare Advantage plan with drug coverage to one that doesn’t offer drug coverage
Join Medicare Part D
Switch from one Part D plan to a different one
Drop Part D drug coverage altogether
|January 1 through February 14||Drop your Medicare Advantage plan and enroll in original Medicare instead|
October 15 through December 7 is the open enrollment period for Medicare, so it’s a big time for beneficiaries. The other enrollment period is referred to as the “Medicare Advantage Disenrollment Period,” and it’s specifically set out for people who want to drop MA coverage and return to original Medicare. If you drop an MA plan during this period, your original Medicare coverage will start on the first of the month after you enroll. If you add Part D coverage when you make the switch, then that coverage starts on the first of the month after the plan gets your enrollment form.
Note that the disenrollment period is not for making changes to Medicare Advantage plans other than dropping them and switching to original Medicare. You can’t use this period to make any other changes. The primary enrollment period starting in October is your chance to change your coverage unless you qualify for a special enrollment period (SEP). Medicare offers a chart detailing SEPs and the circumstances that might qualify you for an additional sign-up period.
Five important myths about Medicare Advantage
Many Americans don’t realize what Medicare is or understand how Medicare Advantage works. In particular, they have questions when it comes to private health insurance companies providing a supplement to a government healthcare program. These myths and facts provide some further insight into the current state of Medicare Advantage and how it benefits Americans.
- Medicare Advantage means “Vouchercare.”
There aren’t any laws or reforms being proposed that would create vouchers for Medicare recipients so that they would have a fixed dollar amount on a check or other slip of paper. You still carry an insurance card for a Medicare Advantage plan that is issued through a licensed health insurance carrier approved by Medicare.
- Medicare Advantage promotes competition, which makes health insurance more expensive.
Evidence has shown otherwise. The model for Medicare actually creates a premium support plan that allows beneficiaries to pay an average of $30 a month in premiums. Competition and new laws for transparency on pricing have placed pressure on health insurance companies to keep costs low and provide more services. In addition, Medicare Advantage plans offer extra services, like vision, dental and wellness programs, that you don’t receive with original Medicare through the government. Competitive plans drive down prices, and added services keep seniors healthier, further driving down healthcare costs.
- Private health insurance companies don’t have to offer the same benefits as original Medicare.
This is one of the biggest myths about Medicare Advantage. There are guaranteed benefits with Medicare that have only been strengthened by current reforms. Now, all health insurance plans, including Medicare and Medicare Part C, must include preventive care services. In addition, private Medicare Advantage plans must include all services available in original Medicare (except for hospice). The government rates them as well. You can view Medicare plan ratings on Medicare.gov.
- Medicare Advantage covers all of my medical expenses.
Unfortunately, this isn’t true. Original Medicare and Medicare Part C do not cover all of the bases when it comes to your healthcare. Only about half of medical and skilled nursing expenses are included in Medicare benefits. Among the services and items that may not be covered under Medicare Advantage are:
- Long-term care
- Routine dental care
- Cosmetic surgery
- Hearing aids
- Exams for hearing aid fittings
While some Medicare Advantage plans include extras, like hearing aids, it’s important that you specifically ask the health insurance carrier what extras they provide. However, if you are looking for long-term care, you won’t be able to find any Medicare plan with this coverage.
- Medicare Advantage is free.
If a company tells you that Medicare Advantage is entirely free, you should be suspicious. You typically have to pay a monthly premium for Medicare with a deductible. You also have to cover coinsurance and copayments for any medical services that you receive.
Medicare Part A is premium-free for most enrollees. However, there is a deductible of $1,316 in 2017.
Medicare Part B has a standard monthly premium of $134 for new enrollees in 2017 with a yearly deductible of $183. You also have to pay a 20 percent copay in some cases.
Medicare Part C costs vary depending on the company, but you may have to pay an additional premium per month.
Medicare Part D costs vary by company and there are additional premiums for coverage. The deductible varies, but there’s a cap put into place by Medicare each year. In 2017, the maximum annual deductible is $400. In 2018, the max deductible is $405. Copays also vary depending on company.
These myths are just a few of the reasons that people hold back from applying to Medicare every year. If you are eligible to receive Medicare benefits, it’s important that you talk to an agent or speak to a Medicare specialist if you have questions. You can also compare many of these Medicare plans online to find a healthcare plan that meets your budget and includes the services that you need each year.
How does the government rate Medicare Advantage plans?
Medicare beneficiaries who have Medicare Advantage plans are more likely to pick a plan with a higher star rating than one with one or two stars according to recent findings. Ratings have a significant impact on the plans that are most popular for Medicare recipients; they also help members pick plans with better offerings.
Studies also show that ratings make a difference to consumers because quality matters. With the creation of the online plan quality and ratings finder on Medicare.gov, anyone can quickly find top-rated Medicare Advantage plans for their service areas. However, it’s important to understand how these plans are rated and what the government looks for when determining the quality of a health insurance plan. Ratings for Medicare plans are based on the following:
- Screenings, tests and vaccines
- Long-term health condition care
- Member experience
- Member complaints, improvements, plan performance and issues getting service
- Customer service
Medicare drug plans that are separate from Medicare Advantage are rated slightly differently. These plans are rated according to the following:
- Patient safety and drug pricing accuracy
- Drug plan customer service
- Member complaints, problems with getting drugs and improvements in performance
- Member experiences with the plan
You can use the government rating of a Medicare Advantage plan to pick coverage that is best for your budget and needs. Ratings are based on satisfaction surveys, healthcare providers and plan options. Plans receive ratings from 1 to 5. If a plan has a 5-star rating, that means it’s an excellent plan. Ratings are updated every fall.
Plan ratings are based on the previous year’s performance as well. Plans in your area can also be compared to original Medicare to see if they are offering you the best value for the premium that you will pay. If your plan receives low ratings year after year, you may want to switch to a better plan. Plans are limited to the service area, however, which means you may not have access to higher quality plans if there aren’t any available in your region.
In this case, if you cannot find a high-rated plan in your service area, it may be best to go with original Medicare and supplemental coverage. This is especially true if you have serious medical care needs and costs. For individuals with ESRD, original Medicare will be the only option available since you cannot enroll in a Medicare Advantage plan if you have end-stage renal disease.
Medicare Advantage special enrollment for 5-Star plans
You can switch to a 5-star Medicare Advantage plan or other supplemental plan offered by a private health insurance company during a Special Enrollment Period from November 30 to December 8 each year. Many plans are rated just under 5 stars but still offer great benefits and have excellent customer satisfaction.
Plans should also be compared based on their customer satisfaction and reviews. You can read reviews and compare plans based on customer service, pricing, benefits, extra services and ease of use.
How do I choose the right Medicare Advantage Plan?
Before the open enrollment season, check out as many Part C plans as you can to determine which options work for your budget and health needs. Each year, from October 15 to December 7, open enrollment allows you to change, switch or initially enroll in a Medicare Advantage plan. The right choice may save you thousands of dollars every year and make it easier to get the help you need when you need it the most.
A Medicare Advantage plan must cover the same services as traditional Medicare plans. These plans also should take care of some costs that would normally come out-of-pocket, without supplemental coverage. Medicare Part C plans usually require that you use healthcare facilities, doctors, physicians and other professionals already existing in the health insurance plan’s network.
However, most plans offer you either HMO or PPO options. If you choose an HMO Medicare Advantage plan, you will have to choose a primary care physician and receive care within the network. If you go with a PPO, then you may have more of a choice with out-of-network doctors and still receive coverage. Regardless of what you choose, you’ll most likely have out-of-pocket costs in the form of copayments and coinsurance, which depend on carrier and plan type.
Typically, the total premiums that you pay with Medicare Advantage are much lower than the total premiums that you would pay for traditional Medicare plans with supplemental coverage. This is because you have to pay separately for Part B, prescription drug coverage and Medigap if you have supplemental coverage. With Medicare Advantage, you pay a Part B premium and a premium for your Medicare Advantage plan. Average premiums for Medicare Advantage are around $30 in 2018, but if you qualify, you may be able to receive a zero- or low-cost premium plan.
The state of your health matters most when choosing a plan. Lower medical premiums with Medicare Advantage plans are best when you don’t need medical insurance. But if you have a significant health problem, you may want the flexibility to select different doctors and healthcare providers outside your network.
Changes to Medicare Advantage under Obamacare
In 2014, the Affordable Care Act changed the healthcare system in America and also changed small parts of Medicare. The only real change that most people noticed is that now Medicare and Medicare Advantage plans must include preventive care and cannot reject anyone for pre-existing conditions.
There was also an initial drop in the number of Medicare Advantage plans being offered. An Avalere Health analysis found a 5 percent drop in the availability of Medicare Advantage plans. In addition, the variety of plan types also dropped, with more Medicare Advantage providers offering only HMO policies instead of PPO, PFFS and Special Needs Plans.
For the 2018 enrollment season, Medicare Advantage customers will actually see an increase in plan options nationwide. In 2017, there were about 2,700 plans being offered. That number has increased to 3,100 for next year according to the Centers for Medicare and Medicaid Services. Most Advantage members will be able to pick from 10 or more plan options in 2018.
The donut hole, which is a coverage gap in Medicare, will continue to shrink over time as directed by the ACA. In 2017, Medicare beneficiaries received a 60 percent discount on brand name drugs in the donut hole. The subsidy for generic drugs is 49 percent in 2017. In 2018, Medicare recipients will receive a 65 percent discount on brand name drugs while in the donut hole and a 56 percent discount on generic drugs.
What to expect from Medicare Advantage in the future
If you depend on Medicare for your healthcare, then you must compare plans each year before the open enrollment period begins on October 15. Researching your options well in advance ensures that you’ll get the best value for your budget and needs. As HMO plans are on the rise with Medicare Advantage, you also may think about switching back to original Medicare if you prefer a wider selection of doctors.
Overall, Medicare Advantage continues to be the lower-cost option, with more value for those who need to cover basic and more serious healthcare needs.
There are a few other types of plans that you’ll find sponsored by the government under Medicare Part C. It’s best to choose a plan based on your specific needs and always look for the plan that offers the most services for the premium that you pay. If your budget isn’t that big, you may want to stick to basic services or choose a PFFS plan.
Enrolling in Medicare Part C can only be done at certain times of the year or when you first become eligible for Medicare. Please visit HealthNetwork.com to compare Medicare Advantage plans and get connected with a licensed sales agent that can provide you more information on your Medicare options.