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Medicare Advantage (Part C)

Medicare Advantage (MA), also known as Medicare Part C, combines Part A and Part B and is offered by Medicare-Approved private insurance companies. To meet customers preferences and needs, carriers offer many plans varying design and pricing of:

Additional coverage beyond what is covered by original Medicare such as dental, vision, hearing, additional inpatient days, etc.
Cost sharing
Out of pocket limits
Network aspects for access to care
Care coordination model

There are many types of MA plans, but HMO and PPO are dominant. A popular feature is the Medicare Advantage with Prescription Drugs coverage (MAPD). To enroll in an MA plan, you must have Part A and Part B, and live in the Plan service area.

Part C Premium

The Part C premium varies by Plan and it depends on how the insurance company redesign the cost sharing, the benefits added, the In-and-Out-of Network cost, etc.

Medicare Prescription Drugs (Part D)

This program offers prescription drug coverage through private insurers approved by CMS. You can have coverage through a standalone plan (PDP) or through and MAPD plan. You must have Medicare Part A and / or Part B to enroll in Part D.

Part D Premium

The Part D monthly premium varies by plan and higher-income consumers may pay more. Similar to Part B, a beneficiary will pay an additional Part D premium based on the Income Related Monthly Adjustment Amount (IRMAA).

Part D Deductible and Coinsurance

The deductible under the standard benefit for 2025 is $590 ($545 in 2024). Plan can design the PDP coverage to lower or eliminate the deductible but cannot charge a deductible more than this amount. Starting in 2025, per the Inflation Reduction Act (IRA), the following changes are implemented:

The coverage gap also known as "donut hole" is eliminated
The maximum you pay out-of-pocket including third party payments on your behalf is capped to $2,000. These payments are also referred to as True Out Of Pocket (TrOOP). The TrOOP includes deductible, copay, coinsurance, and manufacturer discount. Once this threshold is reached, the beneficiary enters the catastrophic phase and pays nothing.
A payment plan option called "Medicare Prescription Payment Plan" allows you to spread your payments throughout the year by mean of monthly installments instead of making full payment at the pharmacy.

Premium and non-covered drugs do not count toward the annual cap of $2,000.

Under the standard Part D benefits, the beneficiary has 3 payments phases in 2025:

Deductible phase. The enrollee pays 100% of the drug costs until the deductible amount of $590 is met.
Initial coverage phase. The enrollee pays 25% of the Part D covered drugs, the manufacturer pays 10% of brand drugs and the carrier pays the remaining 65% or 75% depending on the drug type.
The catastrophic phase which starts when the TrOOP reaches $2,000. During this phase the enrollee pays nothing. The carrier pays 60%, the manufacturer pays 20% on applicable brand drugs and the federal government pays the remaining 20% or 40%.

For more details, click here to access the Part-D redesigned fact-sheet document released by the Center of Medicare & Medicaid Services (CMS).

Part D Late Enrollment Penalty

You may owe a late enrollment penalty if, for any continuous period of 63 days or more after your Initial Enrollment Period is over, you go without one of these:

In general, you’ll have to pay this penalty for as long as you have a Medicare drug plan. The penalty is 1% of the national base beneficiary premium times the number of months you stayed without acceptable prescription drug coverage. For 2025, the national base beneficiary premium is $36.78