Medicare Part C and Medicare Part D: Which Is Better for You?
Key takeaways:
Medicare Part C (Medicare Advantage) combines hospital and medical coverage, while Medicare Part D is a separate plan just for prescription medication coverage.
Part C and Part D policies are only provided by private insurers.
When deciding between Part C and Part D, consider whether you need coverage for various medical services and if you already have insurance that covers your prescription medications.
If you’re enrolled in Medicare, there are two ways that you can get prescription medication coverage. You can choose a stand-alone Part D plan in addition to your Original Medicare, which includes Part A and Part B. Or you can enroll in a Medicare Advantage (MA) plan — also known as Medicare Part C — that includes prescription drug benefits.
Given the cost of prescription medications, it's a good idea to consider getting prescription coverage through one of these plans, even if you don't currently spend a lot on your medications. Learning how Medicare drug coverage works can help you choose the right plan.
What is Medicare Part C?
Medicare Part C — or Medicare Advantage — is an alternative to Original Medicare. With Original Medicare, you get Part A and Part B. Part A covers hospital stays, and Part B covers visits with your healthcare providers and other outpatient care.
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With Medicare Part C, you get your benefits through private health insurance companies. These companies have contracts with Medicare to provide all your Part A and Part B benefits.
What does Medicare Part C cover?
Medicare Part C plans must cover all the services that Original Medicare does. But they can do so with different rules. For example, each MA plan can charge different out-of-pocket costs.
Medicare Part C plans may also offer extra benefits that Original Medicare does not, including coverage for:
The type of Part C plan you choose will determine what’s covered. For example, health maintenance organization (HMO) and preferred provider organization (PPO) plans offered through Part C typically include prescription medication coverage. And if you have an HMO or PPO plan through Part C, you can’t purchase a stand-alone Part D plan. If your Part C plan is a private fee-for-service plan, it may or may not provide medication coverage.
With Medicare Part C, you usually receive your care from healthcare providers who are in-network with your plan. If you go out of network, your costs may be higher. Original Medicare allows you to see any provider who accepts Medicare.
Medicare Part C eligibility
To join a Medicare Part C plan, you must:
Be enrolled in Medicare Part A and Part B
Live in the service area of the Part C plan you want to join
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You can enroll in a Medicare Part C plan when you first become eligible for Medicare, during your initial enrollment period. This period starts 3 months before your 65th birthday and lasts for 7 months.
Alternatively, you can change from Original Medicare to a Part C plan during the annual open enrollment period, from October 15 to December 7. Medicare Part C plans also have an additional enrollment period between January 1 and March 31, when you can change Part C plans or return to Original Medicare. You may also be eligible for a special enrollment period if you experience certain life events.
What is Medicare Part D?
Medicare Part D is prescription drug coverage. It helps people enrolled in Original Medicare (Part A and Part B) pay for prescription medications. Part D plans are offered by private insurance companies approved by Medicare.
What does Medicare Part D cover?
Medicare Part D covers a wide range of prescription medications. For example, it covers:
Prescription medications you get at the pharmacy or through mail order
Vaccines like shingles and Tdap (tetanus-diphtheria-pertussis)
Each Part D plan has its own list of covered medications called a formulary. This formulary includes generic and brand-name prescription medications. The medications on the formulary are organized into different tiers, and the cost for each medication depends on its tier. Typically, medication in lower tiers have more affordable out-of-pocket costs, while medications in higher tiers may cost more.
Medicare Part D eligibility
To join a Medicare Part D prescription plan, you must:
Be enrolled in Medicare Part A or Part B
Live in the area where the Part D plan you want to enroll in is offered
Like with Medicare Parts A and B, it's important to sign up for Part D as soon as you’re eligible to avoid paying a penalty. But if you already have qualified prescription medication coverage through your job, spouse, or partner, the penalty will not apply as long as you sign up for Part D during your special enrollment period after your coverage ends.
The annual open enrollment happens each year from October 15 to December 7. This is when you can join a new Medicare Part D plan, change to a different plan, or drop your Part D coverage.
What do Medicare Part C and Part D have in common?
Medicare Parts C and D have several similarities:
Both are private insurance. The federal government offers Original Medicare, which includes Part A (hospital insurance) and Part B (medical insurance). By contrast, Medicare Parts C and D are approved by Medicare but offered through private insurers.
Both have premiums and out-of-pocket costs. In this way, Medicare Parts C and D are like most other types of health insurance.
Both have an open enrollment period. During the shared open enrollment period for Part C and Part D — October 15 through December 7 — you can enroll in a new plan or switch plans. Part C has an additional open enrollment period — January 1 through March 31 — when enrollees can change plans.
Neither plan covers medications when you are outside of the U.S.. If you plan to travel abroad, consider getting travel insurance that will cover your drug costs.
How is Medicare Advantage different from Part D?
The table below shows the difference between Medicare Advantage and Medicare Part D.
Feature | Medicare Advantage (Part C) | Medicare Part D |
Type of coverage | Replaces Original Medicare and becomes your hospital and medical insurance plan | Stand-alone prescription medication coverage |
What it covers | Hospital services, medical services, prescription medication, and more depending on the plan | Prescription medications, vaccines, and some medical supplies |
Eligibility requirements | Enrolled in Medicare Parts A and B Live in plan’s service area | Enrolled in Medicare Parts A and B Live in plan’s service area |
Enrollment periods | Initial enrollment when you turn 65 Annual open enrollment (October 15 - December 7) Special enrollment period if you have a qualifying life event | Initial enrollment when you turn 65 Annual open enrollment (October 15 - December 7) Special enrollment period if you have a qualifying life event |
Additional benefits | May include dental, vision, hearing, and fitness benefits | Does not offer additional benefits |
Cost | Monthly premium, copayments, deductibles, coinsurance | Monthly premium, copayments, deductibles, coinsurance |
Provider network | May be limited to a network of healthcare providers and hospitals | Wide range of approved pharmacies |
Most Part C plans include Medicare Part D, but you can also purchase Part D separately if you have a Part C plan that does not include it. For the 2023 coverage year, about 51% of the Medicare-eligible population opted for a Part C plan.
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How do factors such as deductibles and copay levels vary between Part C (Medicare Advantage) and Part D?
The amount you pay in deductibles and copays for Medicare Advantage will vary depending on the plan you choose and where you live. That said, Advantage plans typically cap your total out-of-pocket costs. For 2023, the cap was $8,300 for in-network services and $12,450 for out-of-network services, according to the Kaiser Family Foundation.
Medicare Part D premiums vary significantly based on where you live. For example, the 2023 Part D premiums ranged from less than $2 per month in the Oregon/Washington region to more than $200 per month in South Carolina.
The 2024 Part D deductible is capped at $545 but this amount varies by plan. Some Part D plans might not have a deductible at all.
Copayments for Medicare Part D plans are a bit more complicated. You’ll typically pay the cost of your medications until you reach your plan’s deductible. After the deductible, you’ll owe coinsurance or copayments until you and the plan have paid a combined set amount. Then, your coinsurance generally increases until you hit the out-of-pocket maximum.
Is the appeal process the same for Part C and Part D?
Yes. Appeals under Part C and Part D, both administered by private insurers, are filed directly with the insurer. There is a standard appeals sequence, though the exact steps in the process may vary slightly depending on the insurance company. Typically, you and your healthcare provider will work together to submit the necessary paperwork.
What coverage gaps are present in Medicare Part C and Part D?
Medicare Part D, whether purchased on its own or as part of a Medicare Advantage plan, has a coverage gap known as the “donut hole.” This means that you might have to pay more for your medications at some point.
Here’s how it works:
First, you pay a deductible and then a portion of your medication costs as copayments or coinsurance.
Once the amount that you and your plan have paid for your medications reaches a certain limit — for 2024, it’s $5,030 — you enter the donut hole. During this stage, you pay a larger share of the medication costs — typically 25% of the cost for brand-name and generic drugs.
The donut hole ends when you’ve spent a set amount out of pocket. Then you move to the next stage, known as the catastrophic stage.
In the catastrophic stage, you pay only a small coinsurance or copayment for your covered medications.
You’ll remain in the catastrophic stage for the rest of the calendar year.
How do you avoid the coverage gap?
To avoid or minimize your coverage gap:
Lower the price of your prescription medications by choosing a drug plan with a formulary that includes your prescription medications.
Shop around to see whether another pharmacy offers the same prescription for less.
Look into ordering your medications by mail, which can be cheaper than getting them at the pharmacy.
Use discounts such as those offered by GoodRx, which could bring prices down to less than your drug coverage copay.
Look for assistance from pharmaceutical companies.
Ask your healthcare provider for samples of your medication.
See if there is a State Pharmaceutical Assistance Program in your state.
Contact your local State Health Insurance Assistance Program for additional assistance.
If you have Medicare Part D and are struggling to pay for your prescription medications, you may qualify for Extra Help, a federal subsidy for low-income Medicare recipients. People who have Medicare Advantage policies are not eligible for Extra Help.
The bottom line
Before choosing between Medicare Part C and Part D, it’s important to consider your other coverage options. If you want additional coverage for expenses like dental or vision care, you can enroll in a Medicare Advantage plan that includes a prescription medication benefit.
If you opt for Original Medicare and don’t have existing medication coverage, you may want a stand-alone Part D prescription drug plan that will limit your medication costs.
Either way, you can keep costs down by selecting a drug plan with a formulary that covers your prescription medications or by using discount programs.
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References
Kaiser Family Foundation. (2022). An overview of the Medicare Part D prescription drug benefit.
Medicare.gov. (n.d.). Find a Pharmaceutical Assistance Program for the drugs you take. Centers for Medicare & Medicaid Services.
Medicare.gov. (n.d.). Medicare Advantage Plans cover all Medicare services. Centers for Medicare & Medicaid Services.
Medicare.gov. (n.d.). Special enrollment periods. Centers for Medicare & Medicaid Services.
Medicare.gov. (n.d.).Travel outside the U.S.
Medicare.gov. (n.d.). What Medicare Part D drug plans cover. Centers for Medicare & Medicaid Services.
Medicare.gov. (n.d.). Yearly deductible for drug plans. Centers for Medicare & Medicaid Services.
Medicare Interactive. (n.d.). Extra Help basics.
Medicare Interactive. (n.d.). Introduction to Part D appeals.
National Conference of State Legislatures. (n.d.). State Pharmaceutical Assistance Programs.
Ochieng, N., et al. (2023). Medicare Advantage in 2023: Enrollment update and key trends. Kaiser Family Foundation.
Ochieng, N., et al. (2023). Medicare Advantage in 2023: Premiums, out-of-pocket limits, cost sharing, supplemental benefits, prior authorization, and star ratings. Kaiser Family Foundation.
State Health Insurance Assistance Program. (n.d.). Regional SHIP location.
