Medicare Part C, officially called Medicare Advantage, is a bundled alternative to Original Medicare offered by private insurance companies that Medicare has approved. Instead of getting your hospital coverage (Part A) and medical coverage (Part B) directly from the federal government, you get both through a single private plan. Most Medicare Advantage plans also include prescription drug coverage (Part D), so everything is wrapped into one plan with one card. As of February 2025, 34.4 million people are enrolled in Medicare Advantage, representing 55 percent of all eligible Medicare beneficiaries.
How Part C Differs From Original Medicare
The biggest practical difference is how you access care. With Original Medicare, you can see any doctor or hospital in the country that accepts Medicare, and you rarely need a referral to see a specialist. With Medicare Advantage, you typically need to use doctors and hospitals within the plan’s network for non-emergency care. Some plans cover out-of-network providers, but at a higher cost.
Medicare Advantage plans also require prior authorization more often. Before the plan covers certain services or supplies, you may need approval from the plan first. Original Medicare rarely requires this step.
The financial structure is different too, and this is where Part C has a clear advantage for some people. Original Medicare has no annual cap on what you pay out of pocket, which means a serious illness or injury can lead to very high costs unless you carry supplemental insurance. Medicare Advantage plans are required to set a yearly out-of-pocket maximum. In 2025, that cap cannot exceed $9,350 for in-network services or $14,000 for in-network and out-of-network services combined. Once you hit that limit, the plan covers 100 percent of your Medicare-covered services for the rest of the year.
One important trade-off: if you’re in a Medicare Advantage plan, you cannot buy a Medigap (Medicare Supplement) policy to help cover your remaining costs. Medigap is only available to people in Original Medicare.
Extra Benefits Beyond Original Medicare
Many Medicare Advantage plans offer supplemental benefits that Original Medicare does not cover at all. The most common additions are dental, vision, and hearing coverage. Original Medicare, for example, does not cover hearing aids or the exams needed to fit them. Many Part C plans do. Some plans also include fitness programs, meal delivery after hospital stays, or transportation to medical appointments. These extras vary widely from plan to plan, so comparing the specific benefits in your area matters.
Types of Medicare Advantage Plans
Not all Part C plans work the same way. The plan type determines how much flexibility you have in choosing providers and whether you need referrals.
- HMO (Health Maintenance Organization): You generally must use in-network providers for everything except emergency or urgent care. You need a referral from your primary care doctor to see a specialist. Some HMO plans have a “point-of-service” option that allows limited out-of-network care at higher cost.
- PPO (Preferred Provider Organization): You can see any provider in or out of the network without a referral, though out-of-network care costs more. PPOs offer the most flexibility among common plan types.
- PFFS (Private Fee-for-Service): You can go to any Medicare-approved provider who accepts the plan’s payment terms. No referrals required. If the plan has a network, out-of-network providers who accept the terms may charge you more.
- SNP (Special Needs Plan): Designed for people with specific chronic conditions, those who qualify for both Medicare and Medicaid, or those in certain institutional settings. SNPs can be structured as HMOs or PPOs, so their referral and network rules depend on the underlying plan type.
How Prescription Drug Coverage Works
Most Medicare Advantage plans bundle prescription drug coverage directly into the plan. These are called MA-PD plans. When drug coverage is included, you don’t need to enroll in a separate standalone Part D plan, and doing so would actually disenroll you from your Medicare Advantage plan.
The drug coverage within Medicare Advantage follows the same basic Part D structure, including formularies (the list of covered drugs) and tiered cost-sharing. Recent changes from the Inflation Reduction Act have reshaped Part D benefits significantly: the coverage gap (sometimes called the “donut hole”) has been eliminated, and there’s a reduced annual out-of-pocket cap on drug spending. These changes apply whether you get Part D through a standalone plan or through your Medicare Advantage plan.
Who Can Enroll
To join a Medicare Advantage plan, you must be enrolled in both Medicare Part A and Part B. You also need to live in the plan’s service area, since these plans are regional. Most people enroll during the Annual Open Enrollment Period, which runs from October 15 through December 7 each year. Changes made during this window take effect on January 1.
There’s also a separate Medicare Advantage Open Enrollment Period from January 1 through March 31, during which people already in a Medicare Advantage plan can switch to a different plan or return to Original Medicare. If you’re newly eligible for Medicare, you can choose a Medicare Advantage plan during your Initial Enrollment Period, which is tied to the months surrounding your 65th birthday or the start of your disability benefits.
Star Ratings and Plan Quality
The Centers for Medicare and Medicaid Services rates Medicare Advantage plans on a one-to-five star scale each year. These ratings evaluate plans across five categories: health outcomes, intermediate health outcomes, care processes, patient experience, and access to care. Plans are measured on up to 43 different quality indicators. A plan with four or more stars is generally considered high quality. Higher-rated plans may receive bonus payments from Medicare, which they can use to offer lower premiums or richer benefits, so star ratings have a direct effect on what you pay and what you get.
Key Trade-Offs to Consider
Medicare Advantage works well for people who prefer a single plan managing all their coverage, want an out-of-pocket spending cap, and don’t mind staying within a provider network. Many enrollees pay $0 in additional monthly premiums beyond their standard Part B premium, though this varies by plan and region.
The drawbacks center on restrictions. Network limitations mean your preferred doctors may not be covered, especially if you travel frequently or split time between states. Prior authorization requirements can delay certain treatments. And if you leave Medicare Advantage to return to Original Medicare, you may not be able to purchase a Medigap policy at the same rates you would have gotten when you first enrolled in Medicare, depending on your state’s rules. That makes the initial choice between Original Medicare and Part C worth careful consideration.