Medicare Part C (Medicare Advantage) Explained: How It Works and What It Covers

Medicare Part C, also called Medicare Advantage, is an alternative way to get your Medicare benefits. Instead of getting coverage through Original Medicare, you enroll in a plan offered by a private insurance company approved by Medicare.

Medicare Advantage plans combine Parts A and B into one plan. Most plans also include Part D prescription drug coverage and extra benefits like dental, vision, and hearing. This guide explains how Medicare Advantage works, what it covers, and how it compares to Original Medicare.

How Medicare Advantage Works

Medicare Advantage plans are offered by private insurance companies that contract with Medicare. To enroll, you must have Medicare Part A and Part B and live in the plan's service area. You continue to pay your Part B premium, and you may also pay a premium for the MA plan itself.

When you enroll in a Medicare Advantage plan, Medicare pays the insurance company a set amount each month to cover your care. The plan must cover all services that Original Medicare covers. Many plans add extra benefits and may have lower out-of-pocket costs than Original Medicare.

Medicare Advantage plans usually have networks of doctors and hospitals. Depending on the plan type, you may need to use network providers or get referrals to see specialists. Always check that your doctors are in the plan's network before enrolling.

What Medicare Advantage Covers

All Medicare Advantage plans must cover the same services as Original Medicare. This includes hospital care, doctor visits, lab tests, preventive services, and durable medical equipment. Plans may have different rules about how you access care, such as requiring referrals or using specific providers.

Prescription Drug Coverage

Most Medicare Advantage plans include Part D prescription drug coverage. If your plan includes drug coverage, you cannot also enroll in a standalone Part D plan. If your MA plan does not include drug coverage, you can add a separate Part D plan.

Each plan has its own formulary, or list of covered drugs. Check the formulary before enrolling to make sure your medications are covered. Some drugs require prior authorization or step therapy.

Extra Benefits

Many Medicare Advantage plans offer extra benefits that Original Medicare does not cover. These may include dental, vision, hearing, fitness memberships, over-the-counter allowances, and transportation to medical appointments.

Extra benefits vary by plan. Some plans offer extensive dental coverage, while others provide only basic cleanings. Review each plan's benefits carefully to see what is included and what you will pay out of pocket.

Types of Medicare Advantage Plans

Medicare Advantage plans come in several types. Each type has different rules about networks and referrals.

HMO Plans

Health Maintenance Organization plans require you to use doctors and hospitals in the plan's network. You must choose a primary care doctor who coordinates your care. You need a referral from your primary care doctor to see a specialist, except in emergencies.

HMO plans often have lower premiums and out-of-pocket costs. However, they are less flexible because you must stay in the network. If you see an out-of-network provider, you will pay the full cost except in emergencies.

PPO Plans

Preferred Provider Organization plans let you see any doctor or hospital that accepts Medicare, but you pay less if you use network providers. You do not need a referral to see a specialist. PPO plans offer more flexibility but usually have higher premiums and out-of-pocket costs.

If you see out-of-network doctors, you will pay a higher coinsurance or copayment. The plan will still cover part of the cost, unlike HMO plans, which may not cover out-of-network care at all.

Other Plan Types

Other Medicare Advantage plan types include HMO-POS, PFFS, and SNP plans. Each has different rules and is designed for specific groups of people.

• HMO-POS plans work like HMOs but allow some out-of-network care for higher costs.
• PFFS plans let you see any provider that accepts the plan's payment terms.
• SNP plans are for people with specific diseases or characteristics, such as dual eligibility for Medicare and Medicaid.

Medicare Advantage Costs

Monthly Premiums

You must continue paying your Part B premium even if you enroll in Medicare Advantage. Some MA plans have an additional monthly premium, while others have a zero-dollar premium. The premium varies by plan and location.

A zero-premium plan does not mean the plan is free. You still pay for Part B, and you will pay copayments and coinsurance when you use services. Compare total costs, not just premiums, when choosing a plan.

Deductibles and Cost Sharing

Medicare Advantage plans may have deductibles for medical services or prescription drugs. After you meet the deductible, you pay copayments or coinsurance for services. Copayments are fixed amounts, like $20 for a doctor visit. Coinsurance is a percentage of the cost, like 20%.

Cost sharing varies by plan. Some plans have low copayments for primary care but high costs for specialists or hospital stays. Review the plan's cost sharing before enrolling to estimate your total expenses.

Out-of-Pocket Maximum

All Medicare Advantage plans have a yearly out-of-pocket maximum. Once you reach this limit, the plan covers 100% of your Medicare-covered services for the rest of the year. This limit does not include your premiums or services the plan does not cover.

The out-of-pocket maximum varies by plan but cannot exceed federal limits set by CMS each year. For 2026, the maximum for in-network services is $9,350. Plans may set lower maximums. Original Medicare does not have an out-of-pocket maximum.

Medicare Advantage Star Ratings

Medicare rates all Medicare Advantage plans on a scale of 1 to 5 stars. Star ratings measure plan quality and performance. The ratings are based on customer service, health care quality, member satisfaction, and how well the plan manages chronic conditions.

Plans with 4 or 5 stars are considered high-performing. Plans with 3 stars are average, and plans with 1 or 2 stars are below average. You can find star ratings on Medicare.gov when comparing plans. Higher-rated plans may offer better care and customer service.

CMS updates star ratings each year. Plans that consistently receive low ratings may lose their contracts with Medicare. Always check the most recent ratings before enrolling or switching plans.

Medicare Advantage vs. Original Medicare

Pros of Medicare Advantage

Medicare Advantage plans offer several benefits that Original Medicare does not.

• All-in-one coverage: MA plans bundle Parts A, B, and often D into one plan.
• Out-of-pocket maximum: MA plans cap your yearly costs for covered services.
• Extra benefits: Many plans offer dental, vision, hearing, and fitness benefits.
• Lower premiums: Some MA plans have zero-dollar premiums, though you still pay for Part B.

Cons of Medicare Advantage

Medicare Advantage plans also have drawbacks compared to Original Medicare.

• Network restrictions: You may need to use specific doctors and hospitals.
• Referrals required: HMO plans require referrals to see specialists.
• Plan changes: Networks and benefits can change each year.
• Travel limitations: Coverage may be limited outside your service area.
• No Medigap: You cannot use a Medigap plan with Medicare Advantage.

How to Enroll in Medicare Advantage

You can enroll in a Medicare Advantage plan during several enrollment periods.

• Initial Enrollment Period: The 7-month period when you first become eligible for Medicare.
• Annual Enrollment Period: October 15 to December 7 each year. Coverage starts January 1.
• Medicare Advantage Open Enrollment Period: January 1 to March 31. You can switch MA plans or return to Original Medicare.
• Special Enrollment Periods: Available if you move, lose coverage, or qualify for Extra Help.

You can enroll online through Medicare.gov, by calling the plan directly, or by working with a licensed insurance agent. Compare plans carefully using the Medicare Plan Finder tool at Medicare.gov.

Key Takeaways

Medicare Advantage plans combine Parts A, B, and often D into one plan offered by private insurers. Most plans include extra benefits like dental, vision, and hearing. All MA plans have an out-of-pocket maximum to protect you from high costs.

Medicare Advantage works best for people who want all-in-one coverage, extra benefits, and predictable costs. However, you must use network providers and follow plan rules. Compare plans using Medicare.gov and check star ratings to find a high-quality plan in your area.

You can switch between Medicare Advantage and Original Medicare during enrollment periods each year. Make sure your doctors are in the plan's network before enrolling to avoid unexpected costs.