How much does Medicare Part C cost?
Medicare Part C, or Medicare Advantage, is a bundled alternative to Original Medicare that includes Parts A and B.
People with Medicare Part C still have to pay their monthly premium for Part B. However, they may get Part A without a monthly charge. A stand-alone Part C premium may also apply.
A person’s options for Part C plans will vary based on where they live and which services are available in that area.
This article explains the potential costs and premiums of Medicare Part C, including the possible monthly fees, the out-of-pocket costs, and how to incorporate drug costs into coverage.
Glossary of Medicare terms
We may use a few terms in this article that can be helpful to understand when selecting the best insurance plan:
Out-of-pocket costs: An out-of-pocket cost is the amount a person must pay for medical care when Medicare does not pay the total cost or offer coverage. These costs can include deductibles, coinsurance, copayments, and premiums.
Deductible: This is an annual amount a person must spend out of pocket within a certain period before an insurer starts to fund their treatments.
Coinsurance: This is the percentage of treatment costs that a person must self-fund. For Medicare Part B, this is 20%.
Copayment: This is a fixed dollar amount a person with insurance pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Monthly costs for Medicare Part C
This article originally appeared on Medical News Today
A person with Medicare Part C will still pay a monthly Medicare Part B premium. They will also need to fund coinsurance payments and deductibles, depending on the healthcare services they use.
As Part C is a bundled plan, it is important to consider the costs of each service available.
Medicare Part A
Most people with Medicare receive Part A for free. Part A covers inpatient hospital services. A person must still pay a $1,632 deductible each benefit period when they need inpatient care.
They are also subject to paying coinsurance if they require an extended hospital or inpatient stay. The coinsurance payments are as follows:
Days 61-90: $408 per day
Days after 91 (lifetime reserve days): $816 per day
Learn more about Medicare Part A.
Medicare Part B
A person with Medicare Part C will still need to pay the monthly Part B premium, which amounts to $174.70 for 2024. However, those with higher incomes may pay a higher premium.
If a person has Medicare Advantage (Part C), their plan will outline how much they pay for medical services under Part B.
For example, Medicare has contracts with specific local providers to offer medical services. Some plans charge a higher copayment if a person visits an out-of-network provider.
Each Medicare Advantage plan has an out-of-pocket maximum spending limit. Once a person reaches this, they will not be responsible for any coinsurance or copayments for the rest of that enrollment year.
In 2024, this limit, depending on the type of policy a person has, cannot be more than $8,850.
Learn more about Medicare Part B.
Medicare Part C premiums
A person with Medicare Part C pays a monthly premium in addition to the Part B deductible. Some premiums are $0, and the monthly premium varies depending on the type of plan and the coverage offered.
For 2024, the average monthly premium cost for all Medicare Advantage plan types is $18.50.
Different Medicare Advantage plan types are available. They vary by deductible, coinsurance, and out-of-pocket limits.
A person may wish to review their last year’s healthcare costs to determine the cost-effectiveness of a Medicare Part C plan. They may also wish to consider how much they could afford to pay if they suddenly needed significant medical care.
For targeted cost estimates based on a person’s local services, they can visit the Medicare Part C search engine on Medicare.gov.
Read about Medicare Part C vs. Part B.
Combining Medicare Parts C and D
In 2023, more than half of all Medicare Advantage enrollees chose to add a Medicare Part D benefit through their plan, according to the Kaiser Family Foundation (KFF).
Medicare Part D is the portion of Medicare that funds prescription drugs.
The Centers for Medicare and Medicaid Services (CMS) require that all people ages 65 years old and over have “creditable drug coverage” for their prescriptions. This means that each person must have prescription drug coverage that meets a minimum set of qualifications set by Medicare.
A person can meet this requirement by having Medicare Part D. If they do not have Part D, they may have to pay late enrollment penalty fees if they choose to sign up for it later.
If a person does not choose to cover prescription drugs through their Medicare Part C plan, they will need to purchase a separate prescription drug policy. If a person already has prescription drug coverage through Medicare Part C, they do not need an additional prescription drug plan.
In 2024, Part D costs take the following shape:
Payment type | Definition |
|---|---|
A person will need to meet the Part D deductible that their Medicare Advantage plan sets. The deductible cannot be more than $545 but varies between plans. Some drug plans may not have a deductible. | |
Once a person meets their deductible, they will pay coinsurance for medications. This coinsurance payment will be no more than 25% of the cost of prescription drugs. | |
Once a person reaches the $5,030 spending limit, they become responsible for their drug costs. This coverage gap is known as the “donut hole.” However, Medicare has an arrangement with drug manufacturers to provide these medications at no more than 25% of the original cost. | |
Once a person spends $8,000 in the donut hole, they enter catastrophic coverage and will pay nothing for their prescriptions for the rest of the year. |
Each Medicare Part C plan has a different list of drugs, called a formulary. This list separates medications into categories, including generic, brand name, and premium drugs.
If a doctor prescribes generic drugs under a person’s Medicare Part C plan, the person will save on medication costs.
Why do I need Medicare Part C?
Medicare Part C is an alternative to Original Medicare. Some people may choose a Medicare Part C plan for the following reasons:
They have a medical condition that requires specific services and medications. Medicare Part C offers Special Needs Plans for people with specific conditions, such as congestive heart failure or diabetes. These targeted plans may provide cost savings to a person.
They need additional services that Medicare does not offer, such as hearing or vision care.
They receive benefits under a group plan. Some employers and unions offer their retired employees a group plan under Medicare Advantage. These firms may provide additional services at a lower cost to their former employees.
People often choose Part C over Original Medicare if they are seeking greater cost savings, expanded coverage, or both.
Learn more about Original Medicare vs. Medicare Advantage.
Medicare resources
For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.
Summary
Some people prefer Medicare Part C for its potential cost savings or expanded coverage. For others, Medicare Part C is not as cost-effective as Original Medicare.
A person’s overall health, geographical location, and specific medical needs usually factor into whether or not a plan is cost-effective.
Because so many Medicare Part C plans are now available, a person should thoroughly compare and consider each before making their selection.
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