What is Medicare Part C?

Hey, Casey Peterson here. You know, we’ve been doing a series of videos to try and kind of give the real basics of Medicare. We’ve talked about Medicare, um, Medicare supplement policies. We’ve talked a little bit about the basics of Medicare Part A and Part B, and I want to talk briefly about Medicare Part C. So remember, Medicare A and B is what we call original Medicare, and that comes from the federal government. A is hospital, B is medical. And we’ve talked about Medicare supplements or Medigap plans. The Medicare Advantage plans are a different type of insurance. These are private insurance companies and they’re all over the United States. They’re not in every county, in every state. And so that’s a really important factor to understand. You need to make sure that you look and talk to somebody and find out what plans are available where you live.

But Medicare Advantage plans are private insurance companies. And these private insurance companies, they go to the federal government and they go to Medicare and say, “Hey, we want to offer insurance policy, insurance plans, to people who are eligible for Medicare A and B and who live in a certain geographic area.” Normally, it’s county by county. In some states, it’s been zip code by zip code. But in most places, it’s county by county. So, if you live in one county, you might have a list of different Medicare Advantage options from various insurance companies. If you live or move to a new county, there might be a new list of options or there may not be any Medicare Advantage plans. The reason for that– let me kind of explain how a Medicare Advantage plan works.

So, let’s say that the name of the Medicare Advantage plan company you’re looking at is XYZ Insurance. Let’s say you get a hold of XYZ Insurance. You say, “Okay, I want to sign up for a plan and I live in X County,” and you go to them and you talk to us or you talk to another insurance agent and you get information about that plan.

The way that these Medicare Advantage plans work is, again, they’re county specific. And so you live in X County and you go and sign up for a plan from XYZ Insurance company. And you when you do that, you’re telling the federal government that you want XYZ Insurance company to be your insurance. Now, remember, I told you, you have to have Medicare A and B and you have to keep paying your Medicare Part B premium.

When you sign up for a Medicare Advantage plan, you have to keep paying your Medicare Part B premium. You have to be enrolled A and B, and you have to pay that Part B premium. But, you go and you sign up for a Medicare Advantage plan from XYZ Insurance. They may have an additional monthly premium that you would pay them, but they become your insurance.

And the way that they get paid is that every single month that you’re on that plan, whether you use it or not, Medicare is going to send XYZ Insurance company a flat amount of money. And that amount of money is based off your health, your age, and where you live. So, you may be on a plan in one county and have some friends in another part of the state or another state altogether on a similar plan, paying a different monthly premium. It can– it is based off your health, your age, and where you live is how those companies get reimbursed for Medicare every month. And so that is one of the factors that sets those monthly premiums. But as I said, these plans are specific to the county you live in and they are contracted with Medicare. What does that mean?

That means that you– the plan, XYZ Insurance company or any other one, has to cover everything that Medicare would cover. They are a contract with Medicare that says they have to cover and give you coverage as good, if not better, than what Medicare would cover. So, if Medicare covers an annual wellness exam at a zero copay and you go to a doctor that’s in the plan, that– we’re going to talk about networks in just a second– but in the network of that new XYZ Insurance policy you signed up for, well, that XYZ Insurance company has to cover a wellness exam just like Medicare at a zero co-pay. So that’s some real peace of mind. You’d know that if Medicare was going to cover a hip surgery, the Medicare Advantage plan would have to cover the hip surgery.

Okay. Now, there are some factors to keep in mind with Medicare Advantage plans. They come in a couple of different forms, a few different forms, actually, PPO, which stands for preferred provider organization, HMO, which stands for health maintenance organization, PFFS, private fee for service, and then there’s some other plans in various parts of the country– medical savings plans– there’s, there’s some other ones. But where we work and where we sell plans, in the six states that we sell plans, we don’t have other options. And there’s– those other options are very few and far between. We can talk more about those another, another video. So let’s talk about PPO, HMO and PFFS.

First of all, I want you to think of a big circle. On a PPO or an HMO, you have a circle, and you have to see doctors, hospitals and providers that are in that circle. That circle is called the network of providers. So XYZ Insurance company, before you’ve ever walked in the door, has gone to a primary care doctor, a specialist, a hospital, a chemotherapy therapy treatment center, and they’ve got a contract with them of how much XYZ Insurance company is going to pay the doctor or the provider. Okay?

That’s called a network. These are contracted facilities with XYZ Insurance company. On a PPO, if you go to doctors in that first big circle, you get a discounted rate. But what if I have a doctor out of state? But if I want to see a doctor in Seattle or in Utah or in Idaho and I don’t live in one of those states? On a PPO, you can see providers outside of that circle. You can go outside of that circle and see doctors in other states. But, you’re going to pay a higher amount of the cost of the care to see those providers because you’re out of the network, okay? So that’s the real freedom of a PPO– preferred provider organization– it allows you to stay in that network or go out of the network.

An HMO, or health maintenance organization, means you’ve got to stay in doctors that are in that circle. You’ve got to stay with doctors and providers and hospitals that are in the network. They’re contracted with XYZ Insurance company, or whatever one you signed up for. Okay. Now, a lot of people get nervous about that. They say, “Well, I don’t want to be restricted. I want to go to the doctor I want to go to.” And that’s a great question to ask whoever you’re meeting with. And it’s something that we’ll review with you when we meet with you. But seeing doctors, hospitals, specialists, treatment centers, physical therapy centers, that’s really important to people. And I get that. And I don’t try to move– change people’s minds on that. But what we found in most areas, the networks are pretty good. And Medicare requires these insurance companies to have a specific number of providers that are available and accessible to the people who are on the insurance plans, these Medicare Advantage Plans.

So, over the last four or five or six years, we’ve seen a tremendous growth in the number of providers that accept those plans in most places. Again, if you’re in a rural county or in a county that does not offer Medicare Advantage plans, that might be a challenge, and so maybe a Medicare supplement or Medigap plan would be better for you. But the first thing we’ll do, along with looking up your prescription drug coverage, is to make sure the doctors you want to see and the providers you want to see, your contract, what are– whatever plans we’re looking at, okay? So PPO, HMO. PPO gives you little more freedom. HMO can be a little more restrictive. You need to understand the network and what doctors and providers are accepted.

The last is what’s known as private fee for service plan or PFFS. Now, private fee for service plans are still around. They’re not as available as they used to be. They were really popular for a number of years because it gave you access to big lists of doctors and hospitals and you could go quite a few places. But the number of places that take– or, excuse me– the number of insurance companies that sell private fee for service plans in most states, in most counties, is pretty limited. There’s quite a few in rural Wyoming, or Montana. But anyway, the way that they work is when you go see a doctor or provider, they have to agree to accept the contracted amount that they would get paid. Okay? And so they can be a little bit more restrictive, but there’s not a lot of them out there. We can talk more about private fee for services, private fee for service plans, if it’s an option for you.

Let’s talk about all three options, however. In an emergency, on any of these Medicare Advantage plans, it doesn’t matter if you’re in Idaho, Washington, Utah, New York, California, North Dakota– if you’re in an emergency situation, you can go to any emergency room anywhere in the country, and in most plans, anywhere in the world. Now, some plans have restrictions on how much they cover when you’re out of country, but if you’re in the United States and you’re on a Medicare Advantage plan, you have emergency room coverage anywhere in the world and in urgent care facilities as well in the United States. But there are some restrictions when you’re out of the country as far as medical transportation to bring you home on a medical transport.

So, there’s a lot to know about these Medicare Advantage plans. Some things that are great to know about them and why they’ve really become very popular the last five or seven years: they have to cover everything that Medicare covers, but they’re allowed to cover more. And so in the last few years, we’ve seen some extra benefits be added to these plans all over the country. Things like preventative dental can be included or added at a low cost, help with eyeglasses and routine eye exams– Medicare doesn’t cover routine eye exams– help with routine hearing exams and help with hearing aids. One of the things that people really like is a basic gym membership. So if you’re going to a local gym that’s in the network of the Medicare Advantage plan that you’ve chosen, then a lot of times they’ll pay either all of your basic gym membership fee or most of it, and that’s a real great benefit.

In some plans, they cover chiropractic outside of the narrow definition of chiropractic care that Medicare covers. So they’ll cover routine chiropractic. Some plans cover acupuncture. We’ve seen them cover meal plans. We’ve seen them cover, heck, in the Midwest, I’ve heard of a plan that’s covering iPads. So, I mean, there’s some great benefits and there’s more to talk about, over the counter items like vitamins and supplements and Band-Aids and toothbrushes, all kinds of stuff.

So, these Medicare Advantage plans have become very popular, for those reasons and others. One of the other reasons is the– you know, when you look at a Medicare supplement policy plan, those plans can be anywhere from $100 to $200 a month, just for the medical and hospital coverage. And then you still have to pay for a prescription drug plan on top of that. With Medicare Advantage plans, most of them, matter of fact, a lot of them, cover your prescription or your Part D prescription drug coverage, included. And in some areas, the plan is zero premium a month. Of course, you still pay your Medicare Part B premium, but you might pay XYZ, the insurance company, no monthly premium or have a zero premium.

In a lot of places there is a $20 or $30 premium, so they’re very reasonable on the monthly premium. However, keep in mind with the Medicare Advantage plan, you’re going to have co-pays and co-insurance. So you may pay $5 or $10 to see a primary care doctor. You may pay $35 to $50 for a specialist co-pay. You may have a hospital co-pay of between $100 to $300 a day for, you know, 2 to 5 days, outpatient procedure, chemotherapy, radiation– you’re going to have co-pays and coinsurance for just about everything you have done. And for most people, that’s very comfortable. They’ve been paying co-pays or co-insurance on their employer plan when they were working for a company or on their individual plan.

One of the great pieces of news on these Medicare Advantage plans is the plans that we represent do not have a medical or hospital deductible. So day one, when you go and start using your new Medicare Advantage plan, you pay a co-pay or co-insurance, and XYZ Insurance company starts covering the rest. And so, there’s no period of time at the beginning where you have to pay your– you have to pay something towards the hospital before they’ll pay anything. Doesn’t work like that. And so that’s a big change from group insurance that you might have gotten from your employer or from an individual plan.

The other real safety net is that Medicare requires these plans, these Medicare Advantage plans, to have what’s called an annual maximum out-of-pocket limit. What does that mean? That means that during the year, January through December, whenever you come on the plan, so if my birthday was in July and I started in July, from July till the end of December, you have a maximum out-of-pocket limit. What that means is that there’s a limit to how much you may have to pay out of your pocket for medical and hospital coverage that other Medicare A and B. And that’s a real safety net. So if it’s an HMO and you’re in the network, that number is $6700 or less. A lot of plans are $3000 or $5900. So that, you know, if you have a terrible health year, the most you could spend is going to be that maximum out-of-pocket limit number. If you’re out of network on a PPO, typically it’s $10,000. So again, I’m giving you numbers that are going to be different depending on where you live and what policies you look at, what companies you look at, what’s available to you. But the basics of a Medicare Advantage plan are what we’ve described.

And so, what we look at when you come and meet with myself or anyone else at Generations Insurance is, we’re going to sit down, and we’re going to do a complete review of your options. We’re first going to talk about, who are your doctors? Who are your specialists? What does your upcoming treatments look like? Not because we want to know for qualifications for the plan– and we’ll talk about qualifications in another video– but because we want to make sure we get coverage for the things that are important to you. I’ve had people who said, “Hey, I go to XYZ gym every single day of the week. I’m paying $60, $70 a month for that benefit. I don’t see the doctor very often. I’m only on minimal prescriptions, or none at all, and that gym membership is a big deal to me.” And so, that can be a factor for you. Some people are on very expensive prescriptions for diabetes or rheumatoid arthritis or cancer treatment, and that can be a big deal. So, when you come in and meet with us, we’re going to do a review of all of those things and much, much more. And we’re going to review the options that are– might be best fit for you, and make a recommendation off of that information. Keep in mind that I’ve given you the basics, and there’s no way in 15 minutes that we can sit and talk about Medicare Advantage plans and go through every single detail.

There’s a couple of things to know as far as qualifications. Again, going back to what I said the very beginning, you have to have Medicare Part A and Part B, you have to keep your Medicare Part B and keep paying that Medicare Part B premium, and you have to live in the area that’s called the service area where the plan is available, six months or more out of the year. And up until the end of this year, the only health question we’ll ask is, do you have end stage renal disease? And that is talking about kidney dialysis. Other than that, there’s no preexisting conditions that we can exclude you for, or the plan can, and so those are some really important things to understand. My advice is to do your research, make sure you’re looking at plans that cover all of the things that are important to you, and then when you come in to meet with us, we’ll go over all the information and lay it out for you.