Medicare Advantage Plans: Medicare Part C

Most Americans, upon reaching the age of 65, will become eligible for Medicare. Through this program, participants receive coverage that helps them pay for hospital visits, doctors’ services, and other health care needs. While Medicare does not provide care directly to enrollees, it does offer reimbursement to providers and/or participants for the cost of certain health care services and procedures.

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There are four parts to Medicare coverage. These include:

  • Part A – Hospitalization Coverage – Medicare Part A helps to cover inpatient care that is received in a hospital, as well as certain services that are received in a skilled nursing facility. Most participants who are enrolled in Medicare Part A are not required to pay a monthly premium for this coverage.
  • Part B – Doctors’ Services Coverage – The cost of health care services such as doctor visits, as well as some outpatient hospital procedures, are covered by Medicare Part B. This part of Medicare offers coverage for services that are considered to be medically necessary for the participant. It also covers certain preventive health care services. Medicare Part B participation requires a monthly premium. Those who are enrolled in both Medicare Part A and B are said to be in “Original Medicare.”
  • Part C – Managed Care Coverage – Medicare Part C provides the same coverage as Medicare Parts A and B. It also provides some additional benefits that are not included in Original Medicare. These plans are not offered directly through Medicare but rather via insurance companies that have been approved by Medicare. Medicare Part C is also referred to as Medicare Advantage.
  • Part D – Prescription Drug Coverage – Medicare Part D offers coverage for prescription drugs. This coverage can help to substantially lower the out-of-pocket cost of medications for participants. Having Medicare Part D can also help participants to gain greater access to prescription medications that could help prevent the complications from various health conditions. There is a monthly premium required for participation in Medicare Part D.

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What is Medicare Advantage?

Medicare Part C is also referred to as Medicare Advantage. These plans can be purchased through private insurance companies that are approved by Medicare. Most Medicare Advantage plans are operated as managed care plans. This means that they work in a similar fashion to HMOs (Health Maintenance Organizations) or PPOs (Preferred Provider Organizations).

The Medicare Advantage plans that are offered are required to provide the same benefits and services as “Original Medicare” (Medicare Parts A and B). Therefore, an individual who is enrolled in a Medicare Advantage plan will not also need to be enrolled in Medicare Part A or Part B.

How Do Medicare Advantage Plans Work?

When an individual joins a Medicare Advantage plan, they will be provided with all of their Medicare Part A and Part B coverage – as well as other services such as emergency and urgent care coverage. Medicare Advantage plans will also typically provide other additional benefits over those provided by Original Medicare. These may include dental, vision, and/or wellness programs.

Because these plans are offered by private insurers, each Medicare Advantage plan may have different rules for how their enrollees may obtain services, such as requiring a referral in order to see a specialist. Additionally, plan providers may change their coverage rules each year.

How Does Medicare Advantage Differ from Medicare Parts A and B?

Those who are enrolled in a Medicare Advantage plan still technically have Medicare. The difference is that these individuals simply get their Medicare Part A (hospital coverage) and Medicare Part B (doctors’ services) from the Medicare Advantage plan and not from Original Medicare.

Because Medicare Advantage plans can offer a number of different options, they may be more directly suited to a participant’s specific health care needs. And, while there may be certain rules for obtaining coverage via a Medicare Advantage plan as versus Original Medicare, the premiums and/or the cost of services such as copayments are often lower with a Medicare Advantage plan versus Medicare Parts A and B.

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What are the Different Types of Medicare Advantage Plans?

There are several different types of Medicare Advantage plans, and each differs somewhat in the way that services are offered and obtained. These plans include:

  • HMO – Health Maintenance Organization – In an HMO plan, enrollees are required to obtain their health care services from providers and hospitals that are included in a specific network. In addition, it may also be required that participants obtain a referral from their primary care provider in order to visit a specialist.
  • PPO – Preferred Provider Organization – In a PPO Medicare Advantage plan, participants may use providers and hospitals that are within a particular network, as well as those that are not. However, when obtaining health care services from providers and hospitals that are outside of the network, the charges will likely be higher.
  • PFFS – Private Fee-for-Service – Private-Fee-for-Service plans allow their participants to go to any Medicare-approved health care provider or hospital that accepts Medicare. Therefore, in a PFFS plan, participants are not limited to health care providers and facilities that are in a particular network. However, there is no guarantee that the providers who are chosen will accept the enrollee’s particular Medicare Advantage insurance plan. In this case, it is the Medicare Advantage plan rather than Medicare itself that actually determines how much will be covered by the participant’s plan.
  • SNP – Special Needs Plans – In a Special Needs Medicare Advantage plan, enrollees must obtain their health care services from specific providers and facilities that are included in the plan’s network. Special Needs plans are designed to offer more focused care to their enrollees and their specific health conditions. These plans limit their membership to specific groups  such as:
    • Those who have certain chronic illnesses
    • Those who reside in a skilled nursing facility
    • Those who are receiving home health care services.

In addition, Medicare Advantage also offers some less common plan options, including:

  • MSA – Medical Savings Account – Medicare Advantage MSA plans combine a health insurance policy that has a high deductible with a type of savings account whereby funds in the account may be used to pay for services such as deductibles and copayments that are not covered by the Medicare Advantage plan.
  • HMOPOS – HMO Point of Service – An HMO Point of Service plan works in a similar manner to the regular Medicare Advantage HMO plans, while also providing some services via out-of-network providers for a higher cost.

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Can Medicare Advantage Participants Get Prescription Drug Coverage?

In most cases, an enrollee in a Medicare Advantage plan will have prescription drug coverage (Medicare Part D) included directly through the plan. However, there are some Medicare Advantage plans that do not include coverage for prescription drugs. In these cases, an individual would need to purchase a separate Medicare Part D prescription drug plan if they want such coverage.

It is important to note, however, that an individual cannot be enrolled in both Medicare Advantage and a Medicare Part D prescription drug plan. Therefore, if an individual wishes to enroll in Medicare Part D, then he or she will need to obtain their Medicare coverage via Original Medicare (Medicare Parts A and B).

What is the Difference Between Medicare Advantage and Medicare Supplement Insurance?

Medicare supplement insurance offers benefits that are designed to fill in the “gaps” in Medicare Part A and B coverage such as out-of-pocket copayments and deductibles. These plans are only supplemental to what Original Medicare covers. Therefore, these plans do not provide coverage for services that are not already covered by Medicare Part A or B such as non-essential cosmetic surgery.

A Medicare supplement policy may be purchased through a private insurer that offers such coverage. There are a number of different Medicare Supplement plan options to choose from, and all correspond to a letter of the alphabet – with Plan A offering the most basic set of benefits.

Because Medicare Supplement insurance works in conjunction with the coverage gaps that are left by Medicare Parts A and B, it is not necessary for an individual who has Medicare Advantage to also have coverage through a Medicare Supplement insurance policy.

How Much Do Medicare Advantage Plans Cost?

Due to the fact that Medicare Advantage plans are offered through different companies and in different demographic areas, the premium for this type of coverage will differ among plans. In addition, each Medicare Advantage plan may also charge different out-of-pocket costs to enrollees.

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How Do You Qualify for Medicare Advantage?

In order to qualify for a Medicare Advantage plan, an individual must meet certain criteria, including:

    • They must live in the service area of the Medicare Advantage plan that they wish to join. (It is important to note that those who live in another state for a part of each year will need to determine whether or not the Medicare Advantage plan will cover them in the other state.)
    • They must already be eligible for Medicare Parts A and B (Original Medicare).
    • They must not have End-Stage Renal Disease.

When Can an Individual Join, Change, or Cancel Their Medicare Advantage Plan?

In order to enroll in a Medicare Advantage plan, individuals must do so within certain time frames called enrollment periods. The most common time for someone to enroll in Medicare Advantage is three months prior to his or her 65th birthday.

Some individuals under age 65 receive Medicare due to disability.  They may be able to enroll in a Medicare Advantage plan either during the three months prior to or the three months following the 25th month of the onset of the disability.

For those who are already enrolled in Medicare Advantage and want to switch to a different Medicare Advantage plan, it is possible to simply join the new plan during one of the open enrollment periods.

When the coverage from the new Medicare Advantage plan begins, individuals will automatically be removed from their previous plan. Those who wish to leave their Medicare Advantage plan in order to switch back to Original Medicare should contact Medicare directly in order to do so.

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How Can You Purchase a Medicare Advantage Plan?

Once an individual has decided on a Medicare Advantage plan to join, the following steps will be necessary in order to enroll:

  • Contact the plan provider of choice and obtain an application. Physical paper enrollment forms may be requested, or many plans also offer online application forms via their website.
  • Complete the required form(s) and submit them to the insurance company.

In order to purchase a Medicare Advantage plan, it will be necessary to provide the insurer with your current Medicare identification number, as well as the date that your Medicare Part A and/or your Medicare Part B began. All of this information may be located on your Medicare identification card.

By Susan Wright

Susan Wright

About the author
Susan Wright has been working in the insurance and financial services industries for over 20 years. She earned her MBA degree from St. Louis University, and her BA degree from Michigan State University. Susan has been licensed as an insurance agent and FINRA securities broker. In addition, she has earned nine professional designations, including:
– CLU (Chartered Life Underwriter)
– ChFC (Chartered Financial Consultant)
– RHU (Registered Health Underwriter)
– REBC (Registered Employee Benefits Consultant)
– CSA (Certified Senior Advisor)
– CLTC (Certified in Long-Term Care)
– CCFC (Certified Cash Flow Consultant)
– CSS (Certified Seniors Specialist in Real Estate)
– ADPA (Accredited Domestic Partnership Advisor)
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