How does Medicare work?

What is Medicare Part C?

How does Medicare work?

Your Medicare information guide

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“What is Medicare Part C?”
&
“What does Medicare Part C cover?”

These are the two most common questions everybody has when it comes to their Part C benefits. A few others that always get asked and will be covered below are:

"How can I enroll in Medicare Part C?"

"How much does Medicare Part C cost?"

"Is Medicare Part C the same as Medicare Advantage?"

If you haven’t already, refer to my Medicare 101 guide, for a quick easy to read description of all of the different parts of Medicare.

Below is a guide that is not all inclusive. Should you have a question about whether or not something is covered, contact your health care provider to be certain.


Jump straight to:

What does Medicare Part C cover?

Medicare Part C is often referred to as a Medicare Advantage plan. Both refer to the exact same type of policy. The biggest difference between Medicare Advantage plans and Original Medicare is that Medicare Advantage plans are issued by private organizations, not the federal government. It covers everything that Original Medicare covers plus they often times offer additional benefits not included in your Medicare Part A and Part B coverage.

So in addition to Medicare Part A and Medicare Part B coverage, Medicare Part C may include:

  • Prescription Drug Plans
  • Hearing benefits
  • Dental benefits
  • Vision
  • Benefits
  • Gym Memberships

Coverage will vary based on the plan features of the Medicare Advantage policy you enroll in.

How much does Medicare Part C cost?

Medicare Part C generally carries a low monthly premium, or sometimes no premium at all. A lot of people confuse this with thinking Medicare Advantage plans are free. They are not. You still pay your Medicare Part B monthly premium and in turn Medicare pays the plan provider a monthly fee for assuming the risk.

Medicare Part C enrollment guide

Enrolling in a Medicare Part C Plan is a lot like enrolling in original Medicare. There are a few opportunities each year where you will be able to enroll, dis-enroll, and switch.

You can enroll during:

  • Initial Enrollment Period (IEP)
  • Annual Election Period (AEP)
  • Special Enrollment Period (SEP)

You can switch Medicare Advantage plans during:

  • Annual Election Period (AEP)
  • Open Enrollment Period (OEP)
  • Special Enrollment Period (SEP)

You can dis-enroll and return to Original Medicare during:

  • Annual Election Period (AEP)
  • Open Enrollment Period (OEP)
  • Special Enrollment Period (SEP)
  • Trial Right Period

For more detailed information on how to enroll, when you can or should enroll, and the other nuances of enrolling in a Medicare Advantage plan check out the article I wrote: “The Ultimate Guide to Medicare Enrollment” I cover topics such as the new Medicare Advantage Open Enrollment Period, your Part C Initial Coverage Election Period  (ICEP), qualifying for a Special Enrollment Period (SEP), and so much more. It’s an extremely detailed article on everything enrollment related.

Types of Medicare Advantage plans

There are different types of Medicare Part C plans that are offered and it’s important to know the difference.

Health Maintenance Organization (HMO) Plans – A majority of Medicare Advantage plans are HMO plans. This means that with the exception of an emergency situation, you generally must receive care within the network that you provider specifies. You also have to select a primary care physician (PCP) and in most cases get a referral in order to see a specialist. This may sound similar to you prior employer sponsored health plan as a majority of them are HMOs as well. There is also a type of HMO plan called HMO Point of Service Plans. They are rare to come by, but add the ability to get some services out of network for a higher cost making it similar to a PPO.

Preferred Provider Organization (PPO) Plans – Similar to the HMO plan, but you’re allowed to receive care out of network, albeit for a substantially higher charge. And guess who’s on the hook to pay it? Hint: It’s YOU!

Private Fee-for Service (PFFS) Plans – Is a type of Medicare Part C plan that is not bound by networks, instead you must receive pre authorization from the care facility that they will accept your coverage.

Special Needs Plans (SNP) – A Special Needs Plan is a type of Medicare Advantage Plan designed only for people with a specific disease, or need. The benefits, in network providers, and drug formulary selected are all designed to meet the specific needs of a particular group that the SNP targets. Much like a HMO you need to receive your care from providers that are in network unless there is a medical emergency, assign a primary care physician (PCP), and get a specialist referral. SNP plans are required to provide prescription drug coverage.

Medical Savings Account (MSA) Plans – A type of Medicare Advantage plan that combines a high deductible health plan with a medical saving account. This means that before the plan covers you, you must meet a high yearly deductible. You use your Medical Savings Account to pay for your health care costs. Although MSA Plans do not cover prescription drugs, they still may offer benefits like:

  • Dental
  • Vision
  • Long Term Care (LTC)

Medicare Advantage cost sharing guide

Although your cost sharing will vary depending on which plan and provider you choose, there are some similarities that you will have among each plan.

Your cost sharing will include:

  • An annual deductible
  • A co-payment
  • Coinsurance
  • Maximum out of pocket (MOOP) limit.

While the overall cost sharing will vary from plan to plan, the maximum out of pocket (MOOP) limit is uniformed. The MOOP is the maximum amount that you will have to spend out of pocket towards co-payments and coinsurance expenses on eligible medicare covered services during the calendar year. Currently the MOOP limit is $6700. Some plans may even choose to have a lower MOOP. Once you reach this limit, all of your covered services are paid for in full by your Medicare Part C plan. This means no more co-insurance costs, or co-payments once you reach the MOOP. Your prescription drug plan spending does not count towards the MOOP. Only Medicare Part A and Part B covered services count towards the out of pocket maximum. Original Medicare does not have an out of pocket limit. So if your out of pocket expenses for the year are $10,000, you’re on the hook for the whole amount under Original Medicare unless you have a Medicare Supplement plan. With your Medicare Advantage plan your exposure would be limited to a maximum of $6,700.

 

Advantages of Medicare Part C

  • Often comes with low or $0 monthly premiums
  • Medicare Advantage can be considered an all in one solution. You can have the convenience of having your Part A, Part B, Part D Prescription Drug Plan Coverage and often times routine dental, hearing, and vision all under one policy. This means less paperwork and companies to keep track of.
  • Out of pocket maximum caps. Limits your annual out of pocket exposure for annual co-insurance expenses.

Disadvantages of Medicare Advantage

  • Network limitations – not all hospitals and doctors accept the coverage
  • You can only enroll, dis-enroll, and change plans during specific times of the year.
  • Plan benefits are subject to change each year
  • Covered out of pocket costs not as comprehensive as Original Medicare with a Medigap Plan
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Sean Senseman

Sean Senseman

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