Medicare Part C allows you to obtain health care through a "Medicare Advantage Plan," a private insurance plan, rather than deal with Medicare directly.
Medicare Part C Basics
First, the basics. Medicare is a federal program that guarantees health insurance for people age 65 or older, people under 65 with certain disabilities, and people of any age with End-Stage Renal Disease requiring dialysis or kidney transplant.
Medicare is comprised of four distinct programs. Medicare recipients may choose to obtain their health care either through the “Original” Medicare Parts A and B or through private insurance plans, called Medicare Advantage Plans (MA Plans), under Medicare Part C. Medicare Part D provides prescription drug coverage.
Under Part C, Medicare Advantage Plans must offer its enrollees, at a minimum, the same Medicare-eligible health care services available to beneficiaries under Original Medicare Parts A and B. In addition, MA Plan enrollees are entitled to additional services not generally available to beneficiaries under Original Medicare without additional charge to the enrollee. This may include coverage for vision, dental, or hearing services. In exchange for receiving the additional coverage at no extra charge, the enrollee is generally required to obtain health care services from providers within the MA Plan’s network. MA Plan enrollees are covered for out-of-network care, however, when they require emergency and/or urgent care.
For those who don't want managed care, an alternative to an MA Plan is to buy Medigap insurance to pay for services not covered by Medicare.
Who Is Eligible for Medicare Part C Coverage?
You'll need to compare the rules and eligibility requirements for each MA Plan that you are considering. These are found in the MA Plan documents; you can also go to Medicare’s web site at www.Medicare.gov or call 800-MEDICARE to find out about the eligibility for a particular plan.
There are several types of MA Plans available to Medicare beneficiaries.
Health Maintenance Organizations (HMOs). Most Medicare beneficiaries participate in an HMO Plan. In most HMOs, you are “locked-in” to receiving your routine care from the HMO’s contracted providers, except in emergency or urgent care situations. You will have a primary care physician who acts as a “gatekeeper” from whom you will need to get a referral before seeing a specialist. If you go outside of the network for your routine care without a prior authorization or a referral from your Plan, you may be liable for the entire cost of your care. Some HMOs have a Point of Service Plan (HMO POS) that may allow you to receive some services, such as a visit to an out-of-network specialist, for a higher cost.
Preferred Provider Organization (PPOs) Plans. These plans give you the option to see a provider within the Plan’s network at a lower cost, or go outside of the network at a higher out-of-pocket cost to you. You have the option to go to a non-preferred provider, such as a specialist, without a prior referral from your primary care physician, but your co-payment will be higher than if you had received care from a preferred provider.
Private Fee for Service (PFFS) Plans. These plans allow you to go to any Medicare-approved provider that accepts the plan’s payment terms and agrees to treat you. Not all providers will agree to accept the plan’s terms and payments, so you will need to make sure your doctor will agree to contact and bill the PFFS plan, not Medicare.
Special Needs Plans (SNPs). These plans are limited to people who have certain chronic diseases or disabling conditions, who live in nursing homes or other institutional settings, or who are covered by both Medicare and Medicaid. Medicare.gov has more information on Medicare Special Needs Plans.
Medicare Medical Savings Account Plans (MSAs). These plans are not widely available. They combine a high deductible health plan that covers Medicare Parts A and B services with a bank account funded by Medicare deposits. You can use the money to pay for your health care services during the year. The amount deposited by Medicare is usually less than the deductible. Medicare.gov has more information on Medicare MSAs.
How Much Does an MA Plan Cost?
Your out-of-pocket costs will vary depending upon the MA Plan. Carefully review the Plan materials and keep in mind some of the following points to determine your potential out-of-pocket costs:
- Premiums. Are you required to pay a monthly premium to the Plan in addition to your Part B premium?
- Deductibles. Are you responsible for a yearly deductible? Are there any other services which require a deductible to be met?
- Co-payments and Co-insurance. What is your share of the cost for a medical service? The co-payment is usually a set amount, such as $20 for each doctor visit or prescription. The co-insurance is generally a percentage you pay after any deductibles, such as 20% for a test.
- Yearly cap. What is the yearly cap on how much you pay out-of-pocket for Part A and Part B services during the year?
- Out-of-Network Costs. What is your cost if you go out of your plan’s network to receive routine medical services or supplies? Particularly if you travel widely, have a second home, or spend a great deal of time out of your service area, find out your options for receiving routine care when away from your home.
- Prescription Drug Costs. Does your plan include Medicare Part D Prescription Drug Coverage? If so, does it include the prescription drugs you are currently taking and at what cost?
How Do I Join a Medicare Part C Plan?
You must choose to join, or opt in to, a Medicare Part C Plan. You can only join a plan at certain times of the year and generally will stay enrolled in the Plan for the entire year. There are special dates you can change plans.
For more information on joining a plan, visit www.medicare.gov/publications to view the fact sheet Understanding Medicare Enrollment Periods. You can also order a copy can be mailed to you online, or call 800-MEDICARE.
Where to Get Additional Information
To find a plan, visit the Medicare website, which has information on finding MA Plans in your area. Look under Sign Up/Change Plans and About Health Plans for more information on finding and choosing a MA Plan. Then, call or visit the websites of the MA Plans you are thinking about and request copies of enrollment materials and plan literature for review.
For more information on whether an MA plan is the right choice for you and tips on finding the right plan, read our articles Medicare Managed Care Plans: An Alternative to Medigap Insurance and Medicare Managed Care: Choosing a Plan.