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Comparing Part C, Medicare Advantage plans

7 Surprising Things You Didn't Know About Part C, Medicare Advantage Plans. Aetna Medicare, Anthem, Alignment Health Plan, Wellabe, Blue Cross Blue Shield, Clover Health, Devoted Health, Essence Healthcare, GTL - Guarantee Trust Life Insurance Company, Humana Medicare, Kelsey Seybold, Molina Healthcare, Mutual of Omaha, Physician Mutual, SCAN Health Plan, AARP United Healthcare, Wellcare, and Zing Health.

7 Surprising Things You Didn’t Know About Medicare Advantage Plans

Key Takeaways

Understanding these lesser-known Medicare Advantage facts can help you make more informed decisions about your healthcare coverage and avoid costly mistakes.

• Medicare Part C and Medicare Advantage are identical – both bundle hospital, medical, and often prescription coverage into one plan with extra benefits like dental and vision

• You cannot legally hold both Medigap and Medicare Advantage simultaneously, and switching back to Original Medicare may require medical underwriting for new Medigap policies

• Medicare Advantage plans include annual out-of-pocket maximums (averaging $5,421 in 2026) that cap your spending, unlike Original Medicare, which has no spending limit

• Plans can change networks, benefits, and costs annually, so review your Annual Notice of Change each September to avoid surprises

• Medicare pays your plan a fixed monthly amount based on county benchmarks and your health risk score, which explains how plans offer extra benefits at low costs

• Travel coverage varies significantly – emergency care is covered nationwide, but routine care outside your plan’s service area may cost you full price

The key to maximizing Medicare Advantage benefits lies in understanding these nuances and reviewing your coverage annually during enrollment periods to ensure your plan continues to meet your healthcare needs and budget. Medicare Part C is one of the most misunderstood parts of Medicare coverage, even though it offers benefits many people don’t know about. Private companies approved by Medicare offer Medicare Advantage, also known as Medicare Part C. Medicare pays these companies a fixed amount each month for your care ^[27]. Plan premiums can range from $0 to $200, depending on the coverage level and benefits offered ^[28]. I’ll walk you through seven surprising facts about Medicare Advantage Part C in this piece that could change how you think about your coverage options.

Medicare Part C is the Same as Medicare Advantage

The terms Medicare Advantage and Medicare Part C refer to the same coverage option. Private insurance companies approved by Medicare offer these plans as an alternative to getting your benefits directly from the federal government through Original Medicare.

What Medicare Part C covers

Medicare Part C bundles hospital coverage (Part A) and medical coverage (Part B) into a single plan. Nearly 9 in 10 Medicare Advantage plans included prescription coverage^[29] by 2025, which means you get Part D drug benefits without purchasing a separate plan. This bundled approach is different from Original Medicare, where you need to add a standalone Part D plan for prescriptions.

Medicare Advantage Part C plans can include benefits beyond the standard coverage provided by Original Medicare. These extras often include routine dental care with X-rays and exams, vision care for glasses and contacts, and hearing tests with hearing aids. Wellness programs and fitness center memberships may also be part of the package. The specific extra benefits vary by plan and provider, so what’s available depends on which company offers the plan in your area.

You must already have both Part A and Part B if you want to join a Medicare Part C plan. The plan takes over providing these benefits rather than replacing them. You can enroll even if you have a pre-existing condition. Most people with End-Stage Renal Disease can now also join these plans.

How Part C is different from Parts A and B

Original Medicare (Parts A and B) operates as a fee-for-service program administered by the federal government. You can see any doctor or hospital nationwide that accepts Medicare without needing referrals or prior authorization. Medicare Part C and D together create a managed care structure with different rules.

Medicare Part C plans use provider networks, which means you pay more when going outside the network for non-emergency care. Most Medicare Advantage Part C plans operate as HMOs or PPOs. They require referrals to see specialists or charge higher rates for out-of-network visits. Prior authorization is required for certain services ^[29].

Cost structures work differently, too. Medicare Part C plans charge copayments for services instead of the coinsurance percentages you pay with Original Medicare. Many Part C plans have zero-dollar premiums, though you still pay the Part B premium. These plans include an annual out-of-pocket maximum, which Original Medicare lacks.

You Can’t Have Medigap and Medicare Advantage Together

Federal law prohibits you from holding both a Medigap policy and a Medicare Advantage Part C plan at the same time. Insurance companies face legal consequences if they sell you a Medigap policy while you’re enrolled in Medicare Part C^[30].

Why does this restriction exist

The restriction exists due to how each program operates within the Medicare structure. Medicare Advantage Part C replaces Original Medicare in full, while Medigap supplements Original Medicare by filling coverage gaps^[31]. These two approaches can’t work together because they serve different purposes in your healthcare coverage.

Your Medigap policy becomes useless if you join Medicare Part C. The Medigap plan can’t pay any Medicare Advantage Plan deductibles, copayments, coinsurance, or premiums^[32]. You’re paying for supplemental coverage that provides zero benefit. Most people drop their Medigap policy after enrolling in the Mass. Medicare Advantage Plan C for this reason.

The programs also operate under different payment systems. Medicare Part C plans receive a fixed monthly payment from Medicare to manage your care. Medigap policies work alongside Original Medicare’s fee-for-service structure. You can’t combine them because this creates administrative conflicts that make claims processing impossible.

What happens if you switch coverage

You can switch from Medigap to Medicare Advantage Part C without much trouble. You can make this change during the Medicare Open Enrollment Period each year, and insurance companies will accept your application without health screenings ^[33]. But switching back proves more complicated.

Timing becomes critical if you want to return from Medicare Part C to Original Medicare with Medigap. You must apply for a Medigap policy within 60 days before your Medicare Advantage coverage ends, or no more than 63 days after it ends^[30]. You could face medical underwriting and higher premiums if you miss this window.

Keep in mind that you gain special protections if you previously held a Medigap before joining Medicare Part C. You have the right to return to your previous Medigap policy if you’ve been enrolled in Medicare Advantage for less than a year, provided the same insurer still offers it ^[34]^[35]. You must act within 63 days of leaving your Medicare Advantage Part C plan to exercise this right^[35].

Your new Medigap coverage can’t start until your Medicare Part C coverage ends^[30]. Plan this transition with care to avoid gaps in your supplemental coverage.

Medicare Advantage Plans Have Annual Out-of-Pocket Maximums

Unlike Original Medicare, Medicare Part C plans cap your annual spending on covered services. Federal law has mandated this protection since 2011 and provides enrollees with financial certainty that Original Medicare beneficiaries lack ^[6].

How the spending cap works

You pay nothing for covered Part A and Part B services for the rest of the year once you reach your plan’s out-of-pocket maximum ^[7]. The plan covers 100% of the costs after you hit this limit ^[8]. Medicare Advantage Part C plans cannot exceed $9,250 for in-network services in 2026, though many plans set lower limits^[6].

This cap varies by plan. The average out-of-pocket limit for Medicare Advantage Part C enrollees is $5,421 for in-network services in 2026^[9]. Plans compete for members and offer lower maximums than federal regulations require. Agent Broker James O’Neal has been helping families with Medicare, Health, Life, Dental, Vision, and Cancer/Critical Illness Insurance for over 38 years. Quote Plans Online, Compare, and Enroll in a Medicare Health Insurance Plan, or visit us online at www.ONealInsuranceGroup.com.

Comparing caps for different plan types

HMOs and PPOs handle out-of-pocket maximums differently. HMO plans cover services only from in-network providers, with an average in-network limit of $4,636 in 2026^[9]. Enrollees in HMOs pay 100% of the costs for out-of-network care, so these plans don’t set limits on out-of-network services ^[9].

PPO plans offer more flexibility, but with two separate limits. The average in-network limit for PPOs is $6,592^[9]. PPOs also set a combined limit for both in-network and out-of-network services, averaging $9,825 in 2026 ^[9]. The maximum allowed for combined services is $13,900^[6].

What costs count toward your maximum

The out-of-pocket costs that help you reach your maximum include:

Deductibles for Part A and Part B covered services
Copayments for doctor visits and procedures
Coinsurance for hospital stays and medical services

These costs must come from in-network providers to count toward your limit^[6]. Part D prescription drug spending doesn’t count toward your Medicare Advantage Part C maximum^[6]. Part D has a separate out-of-pocket limit of $2,100 in 2026^[9]. Your monthly premiums also don’t count^[10].

Plans Can Change Their Networks and Benefits Every Year

Your Medicare Part C plan can adjust its provider networks, coverage details, and cost structure annually^[7]^[11]. These changes occur because private insurers continually negotiate contracts with healthcare providers and adjust their offerings based on costs and market conditions.

What changes can plans make?

Medicare Advantage Part C insurers can modify premiums, deductibles, and copayments each year^[1]. Plans can raise or lower your maximum out-of-pocket costs, change drugs between coverage tiers on their formulary, and add or remove supplemental benefits^[1]. Network adjustments happen more frequently. Plans can add or remove doctors, hospitals, and pharmacies from their networks at any time during the year ^[12].

Your healthcare providers can also leave your plan’s network on their own. At the time this happens, your plan must give you at least 30 days’ notice so you can select a new provider^[12]. If CMS determines that the network change significantly affects members, you might qualify for a Special Enrollment Period to switch plans in rare instances^[13].

When you can switch if you don’t like changes

Two main enrollment windows let you respond to unwelcome changes. The Annual Enrollment Period runs from October 15 through December 7 and lets you switch Medicare Part C plans or return to Original Medicare with coverage starting January 1^[14]^[15]. The Medicare Advantage Open Enrollment Period runs from January 1 through March 31 and gives current Medicare Part C enrollees one opportunity to switch plans or return to Original Medicare^[14]^[16].

How to prepare for annual changes

Your plan mails an Annual Notice of Change before September 30 each year^[7]^[1]. This document details modifications to your coverage, costs, provider networks, and drug formulary for the upcoming year^[1]. Review this notice carefully, even if you’re satisfied with your current plan, as your health needs or your plan’s offerings may have changed ^[2].

Medicare Pays Your Plan a Fixed Amount Each Month

You enroll in a Medicare Advantage Part C plan, and Medicare doesn’t pay for your services directly. The government instead pays your insurance company a fixed monthly amount to cover your care. These payments totaled $453 billion in 2023^[3].

How Medicare calculates payments to plans

The payment process starts with county-level benchmarks. Medicare establishes these benchmarks at 95%, 100%, 107.5%, or 115% of projected fee-for-service spending in your county^[3]. Rural areas receive higher benchmark percentages than urban areas.

Insurance companies submit annual bids estimating the cost of providing Part A and Part B benefits to someone with average health in each county they serve ^[3]. Medicare compares each bid against the county benchmark. Medicare pays the bid amount plus a rebate if a plan bids below the benchmark^[3]. Plans that bid at or above the benchmark receive the benchmark amount, and you pay the difference as an additional premium^[3].

Rebates vary based on plan quality ratings. Plans receive 50%, 65%, or 70% of the difference between their bid and the benchmark, depending on their star rating ^[3]. Plans must use these rebate dollars to reduce your costs or to add supplemental benefits such as dental and vision coverage.

Why this matters for your coverage

This payment structure explains how Medicare Advantage Part C plans offer extra benefits while keeping premiums low or at zero. Plans that operate efficiently and bid below their county benchmark receive rebate money. They convert it into additional member benefits.

The role of risk adjustment

Medicare adjusts payments based on your health status through a process called risk adjustment^[17]. Each enrollee receives a risk score that reflects predicted healthcare costs relative to the average Medicare beneficiary ^[18]. Higher risk scores lead to higher monthly payments for plans^[17]. Federal law requires a 5.9% reduction across all risk scores to account for coding differences between Medicare Advantage and Original Medicare ^[17].

Some Plans Cover You When Traveling to Specific States

Coverage during travel depends on your Medicare Part C plan’s service area and network structure. Service area refers to the geographic region within which your plan provides medical services to members ^[19]. You must choose one location as your primary residence for enrollment and to base your plan^[20].

How travel coverage works in Medicare Advantage

Plans may or may not cover care outside their service area^[19]. You’ll pay the full cost out of pocket if you use doctors or hospitals outside your plan’s network^[19]. Your plan may impose restrictions, such as prior authorization, when you travel within the U.S.^[19].

Most plans disenroll you if you travel outside their service area for more than six months ^[19]. But some plans offer special benefits that allow you to remain enrolled if you travel within the U.S. or its territories for up to 12 months^[19].

Which plans offer multi-state coverage

Some Medicare Part C plans have doctors in many parts of the country^[5]. Aetna offers plans with a visitor travel program called Travel Advantage. This lets you remain on your plan for an extra 6 months beyond the standard limit while you live outside your service area^[5].

Emergency vs. non-emergency travel coverage

Plans are required to cover emergency and urgent care anywhere in the U.S. without imposing additional costs or coverage rules^[19]. Non-emergency care while traveling may not be covered and may require higher out-of-pocket payments ^[21].

Switching Back to Original Medicare May Affect Medigap Access

Leaving Medicare Advantage Part C to return to Original Medicare creates complications if you want to purchase Medigap coverage. Insurance companies can deny you a policy or charge higher premiums based on your health history outside of protected enrollment periods^[22].

Medical underwriting for Medigap policies

Medical underwriting reviews your health status, medical history, and risk factors before issuing coverage^[23]. Companies assess the likelihood of future claims and use it to determine premiums and eligibility ^[23]. Insurers can deny applicants with conditions like Alzheimer’s disease, asthma requiring inhalers, cancer, congestive heart failure, diabetes with complications, End-Stage Renal Disease, hypertension, or stroke^[24]. All but one of every ten Medicare Advantage enrollees ages 65 and older, or 22.4 million people, face medical underwriting if they apply for Medigap outside protected periods^[24].

Guaranteed issue rights apply at specific times.

You get guaranteed issue protections during your 6-month Medigap open enrollment period at the time you turn 65 and enroll in Part B^[4]. Companies must sell you coverage at standard rates, whatever your health conditions^[4]. You also qualify if you joined Medicare Advantage at first eligibility and disenroll within 12 months^[4]. Agent Broker James O’Neal has been helping people and Families for over 38 years with Medicare, Health, Life, Dental, Vision, and Cancer/Critical Illness Insurance. Quote Plans Online, Compare, and Enroll in a Medicare Health Insurance Plan, or visit us online at www.ONealInsuranceGroup.com. Apply within 63 days of losing coverage to maintain these rights^[4].

Plan your coverage changes with care.

Connecticut and New York prohibit medical underwriting for Medigap enrollment at any time ^[25]. Several other states offer limited guaranteed-issue opportunities^[25]. Contact insurers to verify acceptance before switching from Medicare Part C^[26].

Conclusion

Medicare Advantage Part C offers compelling benefits that Original Medicare doesn’t provide, but these plans require careful evaluation each year. The bundled coverage, out-of-pocket maximums, and extra benefits make Medicare Part C attractive to many people. But network restrictions and annual changes mean you need to review your options regularly. Returning to Medigap coverage can also be difficult.

Agent Broker James O’Neal has been helping individuals and families with Medicare, Health, Life, Dental, Vision, and Cancer/Critical Illness Insurance for over 38 years. Quote Plans Online, Compare, and Enroll in a Medicare Health Insurance Plan, or visit us online at www.ONealInsuranceGroup.com. Please like and share on Facebook and YouTube. Also, visit my Google Business. Please leave us a Five-Star Review.

FAQs

Q1. Is Medicare Part C the same thing as Medicare Advantage? Yes, Medicare Part C and Medicare Advantage are two names for the same coverage option. These plans are offered by private insurance companies approved by Medicare and bundle hospital coverage (Part A) and medical coverage (Part B) into a single plan, often including prescription drug coverage as well.

Q2. Can I keep my Medigap policy if I switch to a Medicare Advantage plan? No, federal law prohibits holding both a Medigap policy and a Medicare Advantage plan at the same time. If you join Medicare Advantage, your Medigap policy becomes useless since it cannot pay any Medicare Advantage deductibles, copayments, or coinsurance, so most people drop their Medigap coverage after enrolling in Medicare Advantage.

Q3. Do Medicare Advantage plans have a limit on out-of-pocket costs? Yes, all Medicare Advantage plans include an annual out-of-pocket maximum. Once you reach this limit, the plan covers 100% of costs for covered Part A and Part B services for the rest of the year. In 2026, the out-of-pocket maximum for in-network services cannot exceed $9,250, though many plans set lower limits.

Q4. Can my Medicare Advantage plan change its doctors and benefits each year? Yes, Medicare Advantage plans can adjust their provider networks, coverage details, premiums, deductibles, and copayments annually. Plans can add or remove doctors, hospitals, and pharmacies from their networks at any point during the year, and you’ll receive an Annual Notice of Change before September 30 detailing any modifications.

Q5. Will I have trouble getting Medigap coverage if I switch back from Medicare Advantage? Potentially yes. Outside of protected enrollment periods, insurance companies can use medical underwriting to deny you a Medigap policy or charge higher premiums based on your health history. However, you have guaranteed issue rights if you joined Medicare Advantage when first eligible and disenroll within 12 months, as long as you apply within 63 days of losing coverage.

References

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