What Is Medicare Part C – Part C might be one of the most confusing parts of Medicare. But, don’t let that deter you from learning about it because it’s a great fit for many Medicare beneficiaries. As long as you understand how Part C works and take care to read your plan’s summary of benefits, Part C can offer great benefits.
So, what is Medicare Part C? In this article, we will review how Part C works and what kind of coverage and benefits you might be able to find in one of these plans.
How does Medicare Part C work?
First, you should know that Part C is also referred to as Medicare Advantage or simply MA. (Or MAPD if it includes prescription drug coverage, but we’ll get into that later.)
The federal government pays private insurers to offer Part C plans, as long as they meet certain requirements. This most important requirement is that they offer at least as much coverage as Original Medicare (Parts A and B), except for the hospice coverage.
The reason the government pays carriers to do this is that it reduces some of their financial burdens. See, if you choose to enroll in Part C with a private insurance company, all of your medical expenses will be paid by the insurance company, not the Medicare program.
You will still be responsible for the Part A and B premiums, even if you choose Part C. (Most beneficiaries receive premium-free Part A, but everyone pays for Part B.) The good news is many Medicare Advantage plans offer very affordable monthly premiums, some ever as low as $0 per month.
How are the insurance companies able to offer such low premiums? Aside from the payment they receive from the government, the insurance company keeps healthcare costs low by using managed care plans. These plans focus heavily on preventive care and have rules that regulate how individuals receive treatment.
One important thing to know when it comes to how Medicare Advantage plans work is what kind of provider networks they operate on. Let’s look at one type of Medicare Advantage plan, a Health Maintenace Organization (HMO).
If you enroll in an HMO plan, you’ll choose a primary care physician (PCP) and receive all of your care from providers and facilities who participate in the plan’s network. If you need to see a specialist, your PCP will refer you to one. If you seek care outside of the network, you’ll have to pay for the entire bill out-of-pocket. This is one limitation of some Medicare Advantage plans, but also one that helps keep their premiums so low.
These $0 premiums do not mean that Medicare Advantage plans are free. Let’s take a look at your coverage and benefits and what your out-of-pocket costs could be within a Part C plan.
Part C Coverage and Benefits
Part C coverage is not cut-and-dry. There are hundreds of Part C plans across the country, each one with different coverage levels. You’ll have to look closely at each plan’s summary of benefits to find out exactly what your coverage entails and how much you’ll pay out-of-pocket. To give you an idea, though, let’s look at some common costs within Medicare Advantage plans.
First, you may have an annual deductible. This is the amount you must pay before the plan begins paying for any benefits. Second, you’ll have copayments and coinsurance costs. These are typically broken down by what kind of service you’re getting. For example, you might have a $250 copay for each nice in a hospital stay for the first five days. Or, you might have a $100 copay per night, but for the first ten days – it all depends on the plan. This same type of out-of-pocket cost applies to things like doctor visits, x-rays, lab tests, etc.
Another attractive feature of Part C plans are the extra benefits they often have. Original Medicare does not include prescription drug coverage or routine dental, vision, and hearing services. You can usually find some or all of these benefits in a Part C plan.
If your plan does include coverage for prescription drugs, you’ll need to check the drug formulary to make sure your current medications are covered. That portion of the Medicare Advantage plan works like the stand-alone Part D plans. You might have a separate deductible and then coinsurance costs for each drug. How much you’ll pay depends on the formulary. If your Advantage plan includes drug coverage, it’s referred to as an MAPD plan.
In regards to the other additional benefits we mentioned, the same rules will apply as they will for the other benefits. For example, your dentist will need to participate with whatever type of plan you enrolled in and with that company. If you enrolled in an HMO plan with Company X, your dentist would need to be in-network with Company X.
You might also find meal delivery, transportation to and from medical appointments, and gym memberships as part of your Medicare Advantage plan. Again, you’ll have to consult the plan’s summary of benefits to find out which extra benefits yours includes.