How to Shop for Medicare Part C Coverage

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It would be nice if Medicare Parts A and B, known as Original Medicare, were enough to cover your health insurance needs, but they're not. Original Medicare alone would leave you responsible for some pretty expensive copays if that’s all you had. For that reason, you need either Medicare Part C coverage or a Medigap policy to fill the gaps in coverage that could leave you paying tens of thousands of dollars out of pocket for hospital stays and medical procedures.

What Is Medicare Part C Coverage?

First, a quick rundown of how Medicare works. Part A, known as hospital insurance, pays for your hospital stay. You pay the first $1,484 and after that, the first 60 days are covered, as of 2021. After 60 days you pay $371 per day and after 90 days, you pay $742 per day. That’s the first of the coverage gaps that could leave you paying a lot of money with Original Medicare alone.

Part B is the piece of Medicare that covers the actual care you receive. The standard monthly premium is $148.50 per month for the coverage in 2021 (more for those with higher income), and your deductible is a mere $203. After you pay the deductible, you pay 20% of all costs but there’s no limit. If your medical bills are $100,000, you pay $20,000. Yet another coverage gap.

Finally, Part D covers prescription drugs. Because of the “donut hole,” a lapse in coverage leaves you paying 25% of the costs of your prescription drugs after you’ve spent $4,130 on covered drugs, in 2021. Your coverage doesn’t kick back in at lower rates until you reach $6,550 in covered expenses.

Put all of this together and you can see why Original Medicare will leave you on the hook for a lot of out-of-pocket expenses. That’s where a Medicare Advantage plan, also known as Medicare Part C coverage, is essential to keeping your healthcare costs manageable. But how do you buy one?

Medicare Part C Shopping Guide

Because Medicare Part C coverage is administered through private insurance companies, shopping for coverage means comparing a variety of different plans. The task is made a little easier because Medicare Part C plans are required to provide everything you would receive with Original Medicare with the exception of certain hospice care options.

Much like other types of health insurance, there are certain types of plans—some are more expensive than others and offer more benefits. You simply choose the plan that gives you the options you want at the price you can afford.

Health Maintenance Plans- Also known as HMOs, these are the most restrictive types of policies because you generally have to see doctors in the plan’s network and you will need a referral from your primary care doctor to get care from a specialist. If you really like your current doctors, an HMO may require you to switch but in terms of affordability, an HMO is the most affordable.

Preferred Provider Organization- Also called a PPO, these plans also have a preferred network of physicians but you can pick doctors outside the network as long as you’re willing to pay a little bit more in copays. This is the most common type of insurance plan but often more expensive.

Medical Savings Account- Your health insurance has a higher deductible that other plans but Medicare deposits money into a bank account that pays some of your out of pocket expenses until the full insurance kicks in.

There are a few other less common account types but we'll stick with these three for now.

Other Considerations

When shopping for Medicare Part C Coverage, you’ll first want an accurate list of any prescription drugs you're taking and the doctors you currently see (that you like.) You don’t want to evaluate plans that don’t cover your drugs and won’t allow you to see your preferred physicians unless you can’t afford a plan that gives you these options.

Next, go to Medicare’s Plan Finder. You can do a quick search that doesn’t require you to enter all of your Medicare information, or a more detailed search that asks for more information but provides targeted results.

The plan finder will ask you a series of questions including whether you want a plan that not only covers Original Medicare while adding additional benefits but also provides prescription drug coverage. If you elect to receive quotes that include drug coverage, the plan finder will ask you for a list of your drugs. Take the time to enter each so you don’t consider plans that don’t cover your current drugs.

Last, pick which type of plan you would like and whether you receive help with your Medicare premiums. The last thing to do is to evaluate the list of options. You’ll find that some include limited coverage for vision, hearing, and dental. Pay particular attention to the plan’s star rating. The higher the rating, the better the plan scored in a variety of metrics.