What Is Medicare Part C? (Medicare Advantage)
The Balanced Budget Act of 1997 opened the door for Medicare beneficiaries to receive Medicare benefits via capitated insurance plans designated as Medicare Part C. As an alternative to the traditional fee for service payment system known as Original Medicare, Medicare Part C expanded coverage.
This type of plan was offered as early as the 1970s and came to be known as Medicare+Choice in 1997. These plans evolved and were renamed Medicare Advantage plans in 2003 just as the oldest baby boomers began considering retirement.
Medicare Part C plans have grown in popularity over the years. They are essentially insurance plans provided by private insurance companies that offer the same benefits as original Medicare with the added bonus of supplemental coverage.
While Medicare Advantage plans don’t have to cover every benefit offered by Original Medicare in exactly the same way, the coverage must be deemed to meet or exceed Original Medicare’s standards. Medicare Advantage is more customizable to Medicare recipients and has grown in popularity accordingly by offering a wider variety of services such as prescription drugs, dental coverage and other sought-after benefits.
Medicare Advantage plans offer Medicare benefits administered via health insurers that operate in the private sector. The majority of Part C plans are health maintenance organizations (HMOs) that operate with primary care physicians that manage a patient’s health care regiment. Other Part C plans are preferred provider organizations (PPOs) which are typically more flexible than HMOs.
How to Join a Medicare Part C (Medicare Advantage Plan)
There are three periods of time when boomers can officially sign up for a Medicare Advantage Plan.
It is important to remember that if you choose Medicare Advantage, you still have to sign up for Part A and Part B first.
The Initial Enrollment Period
This is the first period of time you are eligible to sign up for Medicare as you approach your 65th birthday. The initial enrollment period starts three months prior to your birthday. It also includes the month of your birthday and three months after your birthday, covering a seven-month period.
Open Enrollment Period
This period covers the dates between October 15th and December 7th, annually. During this period each year, you can sign up for a Medicare Advantage Plan, switch plans or drop your plan.
Medicare Advantage Open Enrollment Period
This is an annual enrollment period that lasts from January 1st through March 31st every year. This period allows seniors already signed up for Medicare Advantage the ability to change Advantage Plans or switch to Original Medicare and sign up for a Medicare drug plan.
What does Medicare Part C cover?
As mentioned above, Medicare Advantage covers all the same expenses as Medicare Parts A and B do, with some extra benefits added specifically to that particular plan.
Required coverage:
Hospital expenses
- inpatient hospital services including mental health care
- inpatient rehabilitation services
- home healthcare (limited time period)
- hospice care
- skilled nursing facility care (limited time period)
Outpatient coverage
- doctor’s and specialist’s visits
- ambulance transportation for approved emergencies
- durable medical equipment (for example: in-home oxygen equipment and wheelchairs)
- lab tests (for example: urinalysis and blood tests)
- physical, occupational and speech therapy
- imaging tests (for example X-rays and MRIs)
- vaccinations (flu, pneumococcal disease, and hepatitis B)
- emergency room services
- mental health services
Optional coverage depending on the Medicare Advantage plan
- vision
- dental
- prescription or drug benefits
- telehealth
- gym memberships
- transportation to and from doctor’s appointments
The Cost of Medicare Part C
There are many variables that impact the cost of Medicare Advantage plans. That’s why it is so important for baby boomers interested in enrolling in a Medicare Advantage plan to carefully examine their personal situation and the many plans’ details before making a decision.
For example, people who travel regularly might discover that it is difficult to visit physicians in-network which means they will pay more for medical bills.
Below are the variables related to cost that must be considered. When evaluating these costs, it is important to remember that these items can quickly add up for some people, depending on lifestyle and medical needs.
1. Income
The amount of income earned can impact how much you’ll pay for Medicare Part C costs. For people with lower income, there are designated programs provided to assist in lowering Medicare-related expenses.
2. Premiums
While many Medicare Part C plans do not charge a premium, you may still be charged a Part B premium.
3. Copayments
A large number of Medicare Part C plans charge a small amount for every office visit and prescription drug prescribed.
4. Deductibles
Typically, Medicare Advantage plans include a plan deductible and also expect payment to meet a drug deductible. Many of the free Medicare Advantage plans do not impose a deductible.
5. Coinsurance
Once your deductible is met, then coinsurance is charged. These out-of-pocket expenses are usually a set percentage of total charges as defined by the plan.
6. Lifestyle
If you travel regularly, then many of the Medicare Advantage plans might cost more if you incur medical expenses that are out-of-network when you are out of town.
7. Out-of-pocket limits
There is an out-of-pocket maximum for most Medicare Advantage plans that limit how much an enrollee has to pay out-of-pocket annually.
Conclusion
Baby boomers have a lot of options when it is time to sign up for Medicare Advantage Plans. There is no one-size-fits-all plan that works for everyone. Understanding the details of each plan is crucial for making an informed decision.