November 01, 2022

What Does Medicare Part C Insurance Cover?

Presented by Theresa Rosen, CFP®, CLTC

Medicare Part C is a Medicare-approved private health insurance plan. Part C, also known as a Medicare Advantage plan, is an alternative to Original Medicare.

How—and When—Do I Enroll?

  • Initial enrollment: The initial seven-month enrollment period is the three months preceding your 65th birthday, the month of your birthday, and three months following your birthday. Note that you must first enroll in Parts A and B before choosing to receive your Medicare benefits through a Medicare Advantage plan.
  • Disabled individuals receiving social security or Railroad Retirement Board disability benefits:
    • Before age 65: The initial Part C enrollment period begins 21 months after you start receiving disability benefits and ends 28 months after you start receiving disability benefits. (Please note: Your Medicare eligibility begins 24 months after you start receiving disability benefits.)
    • At age 65: The initial seven-month enrollment period applies.
  • Annual open enrollment period: Open enrollment begins October 15 and ends December 7. During this annual open enrollment period, you can switch from Original Medicare and enroll in a Part C plan or choose a different Part C plan. Coverage under your new Part C plan begins January 1 of the following year.
  • Annual Medicare Advantage open enrollment period: The Medicare Advantage open enrollment period begins January 1 and ends March 31 every year. The choices that can be made between January 1 and March 31 are limited. Clients can only move from one Medicare Advantage plan to another or go from a Medicare Advantage plan to traditional Part A and Part B.  Since traditional Medicare does not cover prescription drugs, clients can enroll in a Part D plan if they decide to return to Part A and Part B.  
  • Special enrollment: The special enrollment period begins when you move away from a Part C plan’s service area or your health insurance coverage through an employer’s plan ends.
    • Generally, special enrollment periods are for two full months. The two-month period typically begins the month after your prior health insurance is terminated.
    • If you discontinue a Part C plan and don’t enroll in a new Part C plan within two months, you will be reenrolled automatically in traditional Part A and Part B plans.
    • If you lose employer-provided health insurance because of the COVID-19 pandemic, you have an eight-month special enrollment period to sign up for Medicare. You may choose coverage through Part C once you enroll in Parts A and B. 

What’s Covered (and What’s Not)?

The Centers for Medicare & Medicaid Services approves the plans that are offered by private insurance companies. Medicare pays a fixed amount to the private insurer for the coverage provided.

  • Part C includes Part A hospital insurance and Part B physician insurance. Part C plans usually include Part D prescription drug coverage. In addition, Part C plans may offer benefits such as dental, vision, and hearing.
  • Your out-of-pocket expenses will vary by plan. Variable costs include monthly premiums, deductibles, copayments, and out-of-network charges.
  • Although Part C covers physician insurance, you still must enroll in Part B and pay the Part B premium.
  • Part C plans cannot require prior authorization for COVID-19 tests. Also, during the national emergency declaration, Part C plans must cover fees charged by out-of-network providers if you are not able to see an in-network physician or get to an in-network hospital or pharmacy. Part C plans cannot charge enrollees for the COVID-19 vaccine.    

What Else Do I Need to Know About Medicare Part C Coverage?

When you enroll in a Part C plan, you’re still enrolled in Medicare.

  • There are five types of Part C plans:
    • Health maintenance organizations (HMOs)
    • Preferred provider organizations (PPOs)
    • Special needs plans (SNPs)
    • Private fee-for-service (PFFS)
    • Medical savings accounts (MSAs) (Please note: MSAs are available only if you have a high-deductible Medicare Advantage Plan.)
  • In addition to plan costs and service-area restrictions, there are several factors to consider when selecting a Part C plan:
    • Part C plans, particularly HMOs and PPOs, typically require you to use in-network providers or to obtain referrals prior to appointments with specialists. You must verify whether your Part C plan will cover the charges from out-of-network providers.
    • Part C plans may change providers within their networks at any time. Likewise, health care providers may choose to leave a Part C plan’s network.
    • Not all Part C plans offer prescription drug coverage. For example, MSA plans do not. If your plan does not include prescription drug coverage, you must enroll in a separate Part D plan.
    • Different Part C plans have different out-of-pocket limits. Once you meet your out-of-pocket limit, you will not incur charges for covered services for the remainder of that plan year.
  • Part C plans are available to individuals with preexisting conditions, and plans can be targeted to meet the needs of enrollees with specific conditions like end-stage renal disease. 
  • Part C plans offer a variety of telehealth services, including e-visits and virtual check-ins. 
  • You can search for Part C plans in specific locations using the online tool at www.medicare.gov/find-a-plan/questions/home.aspx. You can personalize this search by including your Medicare number and date of birth.

This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.


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