Medicare Part C

In 1965, President Lyndon Johnson signed the Medicare Law, which established the Medicare and Medicaid programs. Original Medicare is a government-managed program that provides health insurance to qualifying individuals. Many Medicare enrollees are at least 65 years old, but coverage is available at an earlier age if you have end-stage renal disease or a qualifying disability. Since the program was established in 1965, many changes have been made to Original Medicare, including the introduction of Medicare Part C.

Although Medicare costs less than many other types of insurance, it’s important to understand that it’s not completely free. Depending on which plan you choose, you may need to pay a monthly premium and make a copay or coinsurance payment each time you receive medical care. Many plans also have deductibles that apply to each calendar year or benefit period.

Medicare Part C can help you manage your Medicare costs by bundling several types of coverage into a single plan. This guide provides a detailed overview of Medicare Part C, including what it is, what types of plans are available and how to enroll. You’ll be able to use this information to determine if you should enroll in Original Medicare or Medicare Part C, find ways to reduce your out-of-pocket costs, and choose the right Medicare Part C plan for your needs.

Now that you know why the Medicare program was created, it’s important to understand what Medicare Part C is and how it differs from Original Medicare. Medicare Part C, also known as Medicare Advantage, is a type of Medicare coverage that combines both parts of Original Medicare — Part A and Part B — into a single plan. One of the main differences between Original Medicare and Medicare Part C is that Medicare Advantage Plans are sold by private insurance companies, while Original Medicare is managed by the federal government. Because Medicare Part C is sold by private insurers, premiums vary based on where you live, what type of plan you select and what benefits each plan offers.

Insurance companies that offer Medicare Part C plans must follow rules established by the Centers for Medicare & Medicaid Services. Every Medicare Advantage Plan on the market must provide at least the same level of coverage as Original Medicare, but insurers are allowed to cover additional services to make their plans more attractive. For example, Original Medicare doesn’t pay for routine dental and vision care, but some Medicare Part C plans cover things like eye exams for glasses, routine dental cleanings, and dentures.

Another major difference between Original Medicare and Medicare Part C is that most Medicare Advantage Plans include prescription drug coverage. Original Medicare only covers drugs administered by a health care professional, such as the IV antibiotics you receive while admitted to a hospital or the immunizations administered at your doctor’s office. It doesn’t cover medications that you purchase from a pharmacy and take at home.

If you enroll in Medicare Part C, you may also have lower out-of-pocket costs than someone who signs up for Original Medicare. This is because insurance companies are allowed to set their own copays, deductibles and annual out-of-pocket limits. For example, you may have to pay a $10 copay when you see a doctor, which is less than the 20% coinsurance amount you’d pay if you had Original Medicare.

Health Maintenance Organizations (HMOs)

If you’ve ever had a group health plan, you may have heard of a health maintenance organization (HMO). When you belong to an HMO, you must receive medical care from providers in the HMO network, with a few exceptions. An HMO plan will cover out-of-network services if you need emergency medical care, out-of-area kidney dialysis or out-of-area urgent care. Otherwise, if you decide to go to a provider who isn’t in the plan’s network, the HMO may not cover any of the cost.

HMOs have a few other restrictions in place to keep costs down. For example, if you choose a Medicare Part C HMO plan, you’ll most likely need to choose a primary care provider. A PCP is a general practitioner who manages your medical care. You’ll also need to ask your PCP for a referral if you want to see a specialist. To minimize your out-of-pocket expenses on an HMO plan, it’s important to follow all the rules regarding referrals and prior approvals for medical services.

Preferred Provider Organizations (PPOs)

Preferred provider organizations (PPOs) offer more flexibility than HMO plans. Although it’s less expensive to see a preferred provider, you can usually go to any doctor or hospital of your choice. This is helpful if you want to see a well-regarded specialist who isn’t part of your plan’s network. In most cases, you don’t need referrals for specialists, although choosing a specialist within the plan’s network can help you save money. Another advantage of choosing a PPO plan is that you don’t have to choose a PCP, giving you more freedom when managing your health.

Private Fee-for-Service Plans (PFFS Plans)

A private fee-for-service plan is a Medicare Part C plan that pays providers a predetermined amount for each service. If you enroll in a plan with a PFFS network, you can reduce your out-of-pocket expenses by seeing providers in the network. You can also see an out-of-network provider, but it usually costs more to do so. Nonnetwork providers must also agree to treat you and accept the reimbursement offered by your plan. There’s no need to choose a PCP or ask for a referral to see a specialist, making PFFS plans a little more flexible than HMO plans.

Special Needs Plans (SNPs)

Special needs plans (SNPs) are designed for people who need regular medical care to manage a chronic illness. Each SNP is designed to meet the needs of members with a specific health concern, such as heart disease or diabetes. If you qualify for an SNP, you typically need to get care from providers within the SNP network, except if you need emergency care, urgent care or out-of-area dialysis or if you have end-stage renal disease. You may also be required to choose a PCP or ask for referrals for many services.

Medical Savings Accounts (MSAs)

Medical savings accounts (MSAs) are similar to the health savings accounts (HSAs) offered by many employers, except they’re part of the Medicare Part C program. With an MSA, you get a high-deductible Medicare plan that doesn’t start paying for your medical care until you meet the deductible. This plan is paired with a medical savings account that can be used to pay your health care expenses until the annual deductible has been met. Unlike other types of Medicare Part C plans, MSAs don’t include prescription coverage.

Once you determine which type of plan you prefer, it’s important to understand what Medicare Part C covers. Part C is known as an all-in-one version of Medicare. Unlike Original Medicare, which separates inpatient care and outpatient care, Medicare Part C bundles hospital insurance and medical insurance together, giving you coverage for a wide range of medical services and supplies. Most Medicare Part C plans also include prescription coverage, which isn’t included in Original Medicare. Depending on the plan you choose, your Medicare Part C provider may even cover extra services that wouldn’t be covered if you selected Original Medicare. For example, some plans cover the cost of getting to your medical appointments, a major benefit for anyone who doesn’t drive.

Because Medicare Part C combines hospital insurance, medical insurance, prescription coverage and extra services in one plan, it covers many of the services and medical supplies you’ll need to stay healthy and address any acute or chronic health problems, including the following:

• Lab tests
• X-rays
• Surgery
• Immunizations
• Preventive screenings
• Doctor visits
• Durable medical equipment
• Cardiac rehabilitation
• Emergency care
• Splints and casts
• Prosthetic devices

In addition to hospital care, preventive care and treatments for illnesses and injuries, Medicare Part C covers several types of senior care.

Skilled Nursing

Although Medicare Part C doesn’t cover custodial care, or care that someone can provide without any professional training, it may cover a stay in a skilled nursing facility (SNF). For Medicare Advantage to pay for your stay in an SNF, you must have a qualifying hospital stay, and a doctor must determine that you need daily skilled care when you’re discharged. Skilled care is different from custodial care because it must be provided by a nurse, a therapist or another individual with professional skills and training. You must also receive skilled care in a Medicare-certified SNF if you want to use your Medicare Part C benefits to pay for your stay.

Medicare Part C may pay for the following services during your stay at an SNF:

• Physical and occupational therapy
• Health-related social services
• Ambulance transportation (if medically necessary)
• Speech-language pathology services
• Services provided by a registered dietitian
• Medications

Home Health Care

Medicare Part C pays for home health services that can help you preserve your independence and stay in your own home as long as possible. If you have a chronic disease, you may need home health services to monitor your progress on a new treatment plan or make sure that your condition is as stable as possible. Medicare Part C also pays for physical therapy, occupational therapy, wound care, health-related education and injections.

Hospice Care

If you have a terminal illness, Medicare Part C pays for hospice care to keep you comfortable. To qualify for hospice care under Medicare Part C, your doctor must certify that you have a life expectancy of no more than six months. You must also sign a document acknowledging that you want hospice care instead of other services intended to treat your illness. If you qualify for hospice care under the Medicare Part C guidelines, your plan will cover medications, nursing care, durable medical equipment and other services and supplies needed to relieve pain and manage your other symptoms.

If you think Medicare Part C is right for you, it’s important to understand the eligibility requirements. To qualify for Medicare, you must be at least 65 years old or have a qualifying disability. For most disabilities, you need to receive disability benefits for 24 months before you qualify for Medicare; however, you can qualify sooner if you have amyotrophic lateral sclerosis (Lou Gehrig’s disease) or end-stage renal disease requiring dialysis or a kidney transplant.

You must also be a U.S. citizen or a lawful permanent resident of the United States. If you’re a lawful permanent resident, you must have lived in the United States for at least five years in a row. Finally, you must be enrolled in Medicare Part A and Medicare Part B to qualify for a Medicare Part C plan.

To summarize, you must meet the following requirements to enroll in Medicare Part C:

• U.S. citizen or lawful permanent resident
• At least 65 years or have a qualifying disability
• Enrolled in Medicare Part A and Medicare Part B

Now that you’re ready to enroll in Medicare Part C, you need to know when you can sign up for coverage. Your first opportunity to enroll is during the seven-month period surrounding your 65th birthday. This initial enrollment period starts three months before you turn 65 and ends three months after you turn 65. During this period, you can sign up for Medicare Advantage or enroll in a prescription drug plan (Medicare Part D) to go along with Original Medicare coverage.

If you don’t sign up during your initial enrollment period, you’ll have another opportunity during your plan’s open enrollment period. Since Medicare Part C plans are offered by private insurers, there’s no single open enrollment period for every plan. Therefore, it’s important to compare plans carefully and note when your preferred plan has its next enrollment period scheduled. The enrollment period lasts for at least one month, but some plans give you extra time to sign up.

You may qualify for a special enrollment period if you’re dropped by your Medicare Part C plan or if you move out of your plan’s service area. In some cases, insurance companies decide to stop serving certain markets. If you live in one of those markets, you’ll receive a notice to let you know that the plan will no longer be available in your area. When this happens, you have two options. The first is to switch from Medicare Part C to Original Medicare. If you do this, you’ll have an opportunity to buy Medicare Supplement Insurance (Medigap) and Medicare Part D, supplemental plans that can help you lower your out-of-pocket Medicare costs. The second option is to sign up for a different Medicare Part C plan that offers coverage in your area. You’ll be able to do this between October 15 and December 7.

Each Medicare Part C plan is only available in certain geographic areas. If you move out of your plan’s service area, you have the right to join a Medicare Advantage Plan in your new city or state during the plan’s open enrollment period. If you move several months before the open enrollment period is scheduled to begin, then you’ll need to use Original Medicare until you have an opportunity to enroll in a new Medicare Part C plan.

Not every plan offers the same benefits or has the same out-of-pocket costs. If you have a chronic health issue, be sure to compare Medicare Advantage Plans carefully to determine which one provides the highest level of coverage for the doctors and services you need. Comparing plans can also help you minimize your out-of-pocket costs, making your health coverage more affordable. Before you enroll in a plan, ask these questions to determine which Medicare Part C plan is right for you.

What would my total out-of-pocket costs be if I chose this plan?

Remember that the monthly premium is only one of the costs associated with having Medicare coverage. Although many Medicare Part C plans have $0 monthly premiums, you still have to pay your Medicare Part B premium, which is $148.50 or more per month — depending on your income — in 2021. Each Medicare Advantage Plan may also require you to pay copays or coinsurance when you receive medical services. You also need to think about whether you can afford the plan’s annual deductible.

To make sure you have a clear picture of the out-of-pocket costs associated with each plan, check to see how much you would have to pay for a visit to a doctor’s office, a trip to the emergency room, physical or occupational therapy, lab tests, X-rays and other services you may need.

Is my preferred hospital a part of the plan’s network?

If you prefer one hospital over another, make sure that your preferred hospital is part of the plan’s network. This is especially important if you have a chronic health issue and need to access specialized care at a specific hospital. For example, if you have heart disease, you may want to use a local hospital that’s dedicated to treating people with cardiovascular problems.

Would the plan’s network give me access to a wide variety of specialists in my area?

At some point, you may need a specialist to provide in-depth care for one or more medical conditions. Before enrolling in a Medicare Part C plan, make sure the plan would give you access to as many specialists as possible. Check to see if the plan covers several cardiologists, gastroenterologists, nephrologists (kidney specialists) and other specialists you might need to manage your health now and in the future.

Does the plan offer extra services not covered by Original Medicare?

What makes Medicare Part C such an attractive option is that it often covers additional services that Original Medicare doesn’t cover. If you need coverage for dental care, vision care, hearing aids or other extra services, check the plan details to make sure the services you need are covered.

Can I see an out-of-network provider?

Some plans won’t cover any services provided by an out-of-network provider, while others cover out-of-network care at a lower rate than in-network care. If the plan doesn’t have a large network, you could be forced to use out-of-network doctors and hospitals, increasing your out-of-pocket costs.

How does the plan compare to what I would get if I had Original Medicare with a Medigap policy?

Original Medicare subscribers are allowed to purchase Medicare Supplement Insurance (Medigap) to reduce their out-of-pocket expenses. You can’t buy this type of plan if you sign up for Medicare Advantage, so it can be helpful to compare plans to determine which one offers the highest amount of coverage at a price that fits your budget. When you compare plans, be sure to consider the premiums, deductibles, copays, coinsurance amounts and benefits offered when deciding whether to go with Medicare Advantage or Original Medicare paired with a Medigap policy.

Does the plan cover services I receive while traveling?

Your Medicare Advantage Plan must pay for out-of-area urgent care and emergency care, but Medicare doesn’t require insurance companies to cover non-urgent care when you’re traveling. If you travel frequently to visit family members or just take in the sights at new destinations, it’s best to choose a plan that offers more coverage for services provided by doctors and hospitals outside your area.

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