Medicare Supplement Plan C - What Is It?

Medicare Supplement Plan C is one of the most comprehensive plans. The only benefit not covered by Plan C is Medicare Part B excess charges. It's important to keep in mind you can not enroll in Plan C after January 1, 2021. Watch this short video to learn more about Medicare Supplement Plan C!

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Medicare Advantage (Medicare Part C, MA) is a capitated program for providing Medicare benefits in the United States. Under Part C, Medicare pays a private-sector health insurer a fixed payment. The insurer then pays for the health care expenses of enrollees. Insurers are allowed to vary the benefits from those provided by Medicare's other parts.

Part C plans are required to offer coverage that meets or exceeds the standards set by the other parts, but they do not have to cover every benefit in the same way (actuarial equivalence is required). Plans must be approved by the Centers for Medicare and Medicaid Services (CMS). If a MA plan reduces some benefits, the savings may be passed along to consumers by lowering co-payments for doctor visits (or any other plus or minus aggregation approved by CMS). Coverage must include inpatient hospital (Part A) and outpatient (Part B) services. Typically, the plan also includes prescription drug (Part D) coverage. Many plans also offer additional benefits, such as dental coverage or gym membership. Such plans typically require a higher premium.

Those who do not enroll in a Part C plan receive coverage for Part A and Part B services. Many purchase supplemental coverage (Medigap) to cover services not covered by Medicare, and enroll in Part D for coverage of prescription drugs.

Most MA plans are managed care plans (e.g., PPOs or HMOs) with limited provider networks. About 40% of Medicare Advantage enrollees with prescription drug benefits pay an additional premium. MA plans typically include an annual out-of-pocket spending limit.

Original Medicare and Medicare Advantage pay healthcare providers differently. Original Medicare typically reimburses healthcare providers with a fee for each service. This fee is often calculated with a standard formula (for example, the prospective payment system for hospital services). Providers either accept Medicare's reimbursement rates or opt out of the program. Medicare Advantage plans negotiate payment rates and form networks with healthcare providers, similar to other private health insurance plans.

As of 2022, about 48% of Medicare beneficiaries were covered under Medicare Advantage plans. Nearly all Medicare beneficiaries have access to at least one Medicare Advantage plan; on average, 39 plans per county were available. Medicare Advantage plan costs in 2008 averaged 12% more than Original Medicare.

Other plan types, such as 1876 Cost plans, are available in some areas. Cost plans are not Medicare Advantage plans and are not capitated. Instead, beneficiaries keep their Original Medicare benefits while the plan sponsor administers their Part A and Part B benefits. The sponsor of a Part C plan could be an integrated health delivery system or spin-out, a union, a religious organization, an insurance company or other type of organization.