Medicare 101: Part C

Medicare was first signed into law in 1965, in an attempt to help older Americans access healthcare even after retiring and leaving behind a workplace insurance policy. For over three decades, Medicare consisted of hospital insurance (Part A) and outpatient insurance (Part B). But, in 1997, a new aspect of Medicare was introduced: Medicare Part C.

What is Medicare Part C? Keep reading! And, be sure to check out the other articles in the Medicare 101 series to learn more about Medicare Part A, Part B, and Part D.

Medicare Part C: The Basics

The first thing to know about Medicare Part C is that it’s not an “extra” which you can have in addition to Parts A and B—it’s a replacement. Instead of choosing to receive Medicare Part A and Part B from the federal government, you can instead choose the “Part C” option, which means you receive all of your inpatient and outpatient coverage from a private insurer. Private companies that offer Part C plans are legally required to ensure that this coverage is at or above what a person would receive with Original Medicare.

Medicare Part C is also called Medicare Advantage, because many of the private plans available offer additional services over what you’d get from a traditional, federally administered Medicare plan—such as vision, dental, holistic wellness and so on. Of course, with extra coverage comes extra costs. People who choose a Medicare Advantage “Part C” plan may be looking at additional premiums, higher deductibles, or higher copays for services.

How to Enroll

If you’re new to Medicare, you can choose to immediately enroll in a Medicare Advantage plan instead of joining Original Medicare. Medicare’s online plan finder tool can help you compare plans and see what Medicare Advantage plans are available in your area.

For people who were previously signed up with Original Medicare and wish to change to “Part C”, the open enrollment period to join a Medicare Advantage plan runs from October 15 to December 7 every year. If you’re already signed up to a Medicare Advantage plan but wish to switch to a different plan, or go back to Original Medicare, you can do this from January 1 to March 31. Special enrollment periods also allow you to sign up at other times of the year, following a major life event such as moving or changing jobs, or another incident that affects your coverage.

Premiums

The monthly cost of a Medicare Advantage plan can vary widely depending on your chosen provider and which plan you select.

While Original Medicare requires a monthly Part B premium for outpatient care ($164.90 in 2023), some Medicare Advantage plans are $0 premium. While this may be tempting, keep in mind that a low cost or nonexistent premium may come with sky-high deductibles or copays, or offer limited coverage for vision, dental and so on. Check all out-of-pocket costs and available services before choosing a plan.

Also, keep in mind even if your Medicare Advantage plan has no premium, you are still responsible for paying the Part B premium every month. Some Medicare Advantage plans offer financial assistance with making this payment as a benefit of the plan.

Deductibles & Copays

As with premiums, the cost of deductibles and copays for Medicare Part C depends on which plan you choose. One point to note is that with Original Medicare, there is no out-of-pocket limit; whereas with a Medicare Advantage plan, you can expect an average out-of-pocket limit of around $5,000. This means that in any given year, you won’t pay more than that figure. However, limits are higher when including out-of-network services such as healthcare providers or facilities not listed with your insurer. In general, a plan with less expensive deductibles and copays will come with a smaller network of providers.

Drug Coverage

Original Medicare offers limited coverage for prescription drugs. In order to receive drug coverage, recipients needs to enroll with Medicare Part D. However, by choosing a Medicare Advantage Plan, Medicare recipients can roll prescription drug coverage into their inpatient and outpatient care. There may be an additional premium or specific deductibles for drug coverage with Medicare Part C.

Do I Need Medicare Part C?

The decision to choose a Medicare Advantage plan instead of Original Medicare often comes down to what plans are available in your state, and if your preferred doctors or healthcare facilities will be covered. You can explore Medicare health plans online to understand more about what coverage is available and what kinds of costs you can expect, whether you choose Medicare Part C or not.