You can think of Medicare Part C, more commonly known as Medicare Advantage, as "managed care Medicare". Enrollees receive their Original Medicare benefits from private insurance companies with a Medicare contract.
Usually, the plan also gives its members extra benefits like Part D drug coverage or help paying for dental care.
Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) are the most common forms of Medicare Advantage.
HMOs tend to have smaller provider networks and more cost controls such as needing a referral before seeing a specialist. PPOs tend to have larger networks and few if any referral requirements.
Because they use so many managed care techniques to control costs, HMOs often have lower monthly premiums and more generous benefits than Medicare Advantage PPOs.
On average, someone with Medicare gets to choose from 33 plan options. Most options are in the form of HMOs, followed by different kinds of PPOs.
Some plans even cater to the specific needs of special populations like those with diabetes or people who live in nursing homes.
The number of plan options has increased since 2014, when most communities had access to 18 Medicare Advantage plans. Today there are not only more options but each of those plans also has more coverage.
Medicare Advantage plans are appealing because they offer extra benefits for little or no extra cost. Insurance companies do this because of the way the Medicare program pays them.
More than half of all plans help their members pay for eye exams, fitness classes, hearing exams and dental care. Many plans also give enrollees a monthly allowance for over the counter health care supplies like vitamins, heating pads and mouthwash or toothpaste.
Fewer plans have benefits for things like bathroom safety devices, adult day care and even home pest control.
Medicare Advantage plans have a monthly premium plus copays or coinsurance for most covered services. In 2021, those premiums ranged from as little as $0 to as much as $351.
Because so many private Medicare plans have no monthly premium, the national average is just $28.
HMOs almost never charge a monthly fee. Enrollees still pay their Medicare Part B premium but the rest of their cost sharing is in the form of deductibles and copays.
PPOs often have an extra premium but many of them do not.
Plans having a monthly premium tend to be designed for enrollees with special needs; on average, it's $25 each month. But because so many of those plans cater to low income people with Medicaid benefits, it is unusual for the member to pay the extra premium out of his or her own pocket.