What Are Medicare Advantage (Part C) Plans and How Do They Work?
- Medicare Advantage (Part C) plans are different from traditional Medicare in several distinct ways. Many plans offer prescription drug coverage and dental, hearing and vision benefits, which Original Medicare doesn't offer.
Beneficiaries enrolled in Medicare have a choice in how their benefits are delivered.
While most Medicare enrollees get their benefits covered by Original Medicare (Medicare Part A and Part B), a large and growing number of beneficiaries opt into Medicare Advantage as an alternative path to full Medicare coverage.
Medicare Advantage plans, also known as Medicare Part C, are provided by private insurance companies and offer the same benefits as Medicare Parts A and B, and most plans provide some additional benefits that Original Medicare doesn’t cover, such as prescription drug coverage and routine dental, hearing and vision benefits.
What Is Medicare Advantage?
Medicare Advantage (MA) plans all provide full coverage for inpatient and outpatient services, and many include prescription medication coverage.
Medicare Part C plans are issued by private insurance carriers that are authorized to bill Medicare for reimbursement of costs.
Plans vary by carrier and geographic area, and coverage limits are different from one plan to another, even within a single provider company’s offerings. Because of this variation, it's always best to speak with a plan representative before making a major decision about switching Medicare plans.
Types of Medicare Advantage Plans
Because MA plans are issued by private companies, they have a wide latitude in how benefits can be structured.
- Many Part C plans are packaged as HMO options, which combine health insurance and provider services into a single unified structure.
Part C HMO plans operate much like any other HMO, with a primary care physician assigned to each member to coordinate referrals for specialist care and other services.
- Part C plans can also be offered as PPO, PFFS or other types of plans.
Each of these structures offer benefits for some enrollees, such as private fee-for-service plans that can be highly portable and pay for out-of-network care or care while a senior is traveling with a minimum of extra paperwork.
- Beneficiaries with chronic health conditions or who are eligible for both Medicare and Medicaid may be able to apply for a Medicare special needs plan (SNP).
An SNP focuses services for beneficiaries on condition-specific care.
Not all plan options are offered in all areas, and some rural regions may have only a single Part C provider, which might offer only a single type of Medicare Advantage coverage option.
What Does Medicare Advantage Pay For?
Part C providers are required by law to offer all of the benefits enrollees would otherwise have with Original Medicare Parts A and B. All of the same inpatient and outpatient services are included in any Part C package, though insurers may offer extra services some seniors are willing to shop for.
Services not covered by Original Medicare include routine dental and vision benefits, hearing aid services and routine foot care. Some MA plans do offer some or all of these services, though they may potentially charge a higher monthly premium or larger coinsurance/copays.
What Does Medicare Part C Cost?
The cost of Medicare Part C coverage may vary by location, the type of plan offered and by the plan’s coverage limits.
Though Medicare Advantage insurance companies are usually not permitted to use traditional underwriting standards for care and cost decisions, plans can charge group rates that fall across a wide spectrum.
Some beneficiaries may be able to get a Medicare Advantage plan with $0 monthly premiums. Other Part C plans can charge a monthly premium, with a full, partial or no deductible for services, depending on plan details.
Enrollment Periods for Medicare Advantage
As with most Medicare coverage options, the first time most seniors can enroll in an MA plan is during their Initial Enrollment Period (IEP).
This seven-month period begins on the first day of the month, three months before an enrollee’s 65th birthday, and it ends on the last day of the month, three months after the birthday.
Thus, a senior whose 65th birthday is on May 11 can first sign up for a Part C plan on February 1 and may still apply without penalties as late as August 31 of the same year.
In addition to the initial enrollment window, Medicare beneficiaries have two annual windows for making changes to their coverage. These two different enrollment periods run from January 1 to March 31 and from October 15 to December 7 of each year, respectively.
- During Medicare Advantage Open Enrollment Period from Jan. 1–March 31, existing MA beneficiaries may switch their coverage to another Part C plan or go back to Original Medicare. Original Medicare beneficiaries may not change from Original Medicare to Medicare Advantage during this window.
- During the fall Medicare Open Enrollment Period for Medicare Advantage and prescription drug plans (also called the Annual Enrollment Period, or AEP) from Oct. 15–Dec.7, enrollees have the option to make plan changes to their Part C coverage, as well as to switch into a Part C plan from Original Medicare.
In most states, seniors can test their new Part C coverage during a month-long “try-out” period, and then switch back without incurring a penalty rate.
Under some circumstances, Medicare beneficiaries can choose a Part C plan outside of the normal enrollment windows. Special enrollment periods (SEP) can result for a number of different reasons and circumstances, which can include:
- Residence changes
- Enrollment in Medicare Extra Help
- Admission to a skilled nursing facility or other long-term care hospital
A licensed insurance agent or a Medicare counselor can help you determine if you qualify for a Medicare special enrollment period.
How to Find a Medicare Advantage Plan
Seniors interested in a Part C plan can find a list of Medicare Advantage plans and their plan details by using the Medicare.gov Plan Finder tool.
Beneficiaries who are eligible for Medicare can also browse insurance providers’ websites for plans, compare costs at their state’s health exchange website or speak with a Medicare planner about options available locally. Seniors can also call a plan representative or broker and ask about Medicare Advantage plans.