What is Medicare Part C? - Budget Seniors

Medicare Part C — officially known as Medicare Advantage — is a privately run alternative to Original Medicare that bundles your hospital coverage (Part A), medical services (Part B), and usually prescription drugs (Part D) into a single, streamlined plan. With approximately 35.5 million beneficiaries enrolled as of February 2026, it now covers more than half of all eligible Medicare recipients nationwide.

Key Takeaways: Medicare Part C in 2026 💡

What is Medicare Part C? It’s a private insurance alternative to Original Medicare that rolls Parts A, B, and often D into one plan — offered by companies like UnitedHealthcare, Humana, and Aetna.

Is Medicare Part C free? Not entirely. While many plans charge $0 in additional monthly premiums, you still must pay the $202.90/month Part B premium required by all Medicare beneficiaries in 2026.

What does it cover for seniors? Everything Original Medicare covers plus extras like dental, vision, hearing, and fitness programs — though benefit levels are shrinking in 2026.

Who is eligible? Anyone enrolled in Medicare Parts A and B who lives within a plan’s service area and is a U.S. citizen or legal permanent resident for at least five consecutive years.

How much does it really cost? The average monthly premium dropped to $14.00 in 2026, but copays, deductibles, and the $9,250 in-network out-of-pocket maximum add up fast.

What does Part D cover? Prescription drugs with a $2,100 annual out-of-pocket cap for 2026 — and newly negotiated lower prices on 10 high-cost medications.

What does Part B cover? Doctor visits, outpatient care, preventive services, and durable medical equipment — with a standard premium of $202.90/month and a $283 annual deductible.

Why would I need Part C over Original Medicare? For the out-of-pocket spending cap — Original Medicare has no annual limit, meaning one serious illness could devastate your finances.

What’s the biggest 2026 risk? About 2.9 million enrollees are being forced to find new plans as insurers exit markets at an alarming rate.

Can I switch back to Original Medicare? Yes, during the Medicare Advantage Open Enrollment Period (January 1 – March 31) or the Annual Election Period (October 15 – December 7).

🏥 1. Medicare Part C is a Private “All-in-One” Replacement for Original Medicare

Think of Medicare Part C as the bundled package deal of the Medicare world. Instead of juggling separate Part A hospital insurance, Part B medical insurance, and a standalone Part D drug plan, Medicare Advantage wraps everything into a single plan administered by a private insurer that’s been approved by the Centers for Medicare and Medicaid Services (CMS).

Medicare Part C is a private insurance option that covers hospital and medical costs, but it goes well beyond that basic description. Most plans in 2026 also fold in prescription drug coverage and supplemental benefits that Original Medicare simply doesn’t offer.

Here’s what most articles gloss over: you’re not leaving Medicare when you join Part C. You’re still a Medicare beneficiary — the government still pays the private insurer a fixed monthly amount for your care. The insurer then manages your coverage, builds provider networks, and decides how your benefits are structured within federal guidelines.

Feature	Original Medicare (A + B)	Medicare Advantage (Part C)	💡 Tip
Administered by	Federal government	Private insurance companies	Part C plans must follow CMS rules 📋
Hospital + medical coverage	Yes (separate Parts A & B)	Yes (combined in one plan)	Both cover the same core benefits 🏥
Prescription drug coverage	No (need separate Part D)	Usually included	Check your plan’s formulary carefully 💊
Dental, vision, hearing	Not covered	Often included	Benefits are shrinking in 2026 — verify extras 👀
Out-of-pocket maximum	None	$9,250 in-network (2026)	This is Part C’s biggest financial safety net 🛡️
Provider choice	Any Medicare-accepting provider	Network-restricted (HMO/PPO)	PPOs offer more flexibility but higher premiums 🗺️

💡 Critical Insider Tip: The absence of an out-of-pocket maximum in Original Medicare is the single most dangerous gap most seniors don’t realize until it’s too late. One extended hospital stay under Original Medicare with 20% coinsurance on Part B services can spiral into tens of thousands of dollars with no cap in sight — unless you also carry a Medigap supplemental policy.

💰 2. Medicare Part C is Not “Free” — But the Real Costs are Hidden in the Fine Print

One of the most common misconceptions surrounding Medicare Advantage is that it’s a free upgrade. The average monthly Medicare Advantage/Part C premiums decreased to $14.00 in 2026, down from $16.40 in 2025. And yes, nearly all Medicare beneficiaries (98%) have access to a Medicare Advantage plan with no additional monthly premium in 2026. Sounds incredible, right?

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But here’s the financial reality nobody puts on the brochure: you still owe the Part B premium no matter what. The standard monthly premium for Medicare Part B enrollees is $202.90 for 2026, an increase of $17.90 from $185.00 in 2025. That’s your baseline cost just to be eligible for Part C.

Then come the costs that hit when you actually use your coverage — copays for doctor visits, coinsurance for procedures, and deductibles that have been climbing steadily. The average medical deductible for Medicare Advantage plans substantially increased from $33 in 2025 to $47 in 2026, a more than 40% jump — and that’s on top of potential Part D drug deductibles of up to $615.

2026 Cost Category	Amount	Who Pays	💡 Reality Check
Part B premium (required)	$202.90/month	Every Medicare beneficiary	This applies even with a $0 Part C premium 💸
Average Part C plan premium	$14.00/month	Enrollee (many plans are $0)	$0 premiums often mean higher copays ⚖️
In-network out-of-pocket max	$9,250/year	Enrollee	Down slightly from $9,350 in 2025 📉
Out-of-network MOOP	$13,900/year	Enrollee	Only applies to PPO plans 🚨
Part D drug deductible (max)	$615/year	Enrollee	Many plans waive or reduce this 💊
Part D out-of-pocket cap	$2,100/year	Enrollee	After this, $0 for covered drugs all year ✅
Part A hospital deductible	$1,736/benefit period	Under Original Medicare	Part C plans set their own hospital copays 🏥

💡 Critical Insider Tip: If you earn above $109,000 as an individual (or $218,000 as a couple) in 2026, you’ll also pay an Income-Related Monthly Adjustment Amount (IRMAA) surcharge on top of your Part B and Part D premiums. This catches many retirees off guard — especially those who sold a home or cashed out investments two years prior, since the surcharge is based on tax returns from two years ago.

🩺 3. Medicare Part C Covers Everything Original Medicare Does — Plus Extras That Are Now Shrinking

By federal law, every Medicare Advantage plan must cover at least everything that Original Medicare Parts A and B cover. That’s the floor, not the ceiling. Most plans then layer on supplemental benefits to attract enrollees.

Medicare Advantage Plans cover all benefits of Original Medicare Parts A and B, including hospitalization and outpatient care, and many plans offer additional benefits such as routine dental, vision, and hearing care, which Original Medicare does not cover.

But here’s the 2026 development that should concern every current and prospective enrollee: insurers are systematically reducing those extra benefits to protect their profit margins. All broad benefit categories — inpatient, outpatient, professional, other Medicare-covered, and non-Medicare-covered — had decreased benefit values relative to 2025, with non-Medicare-covered benefits being by far the largest single driver of reduced value.

What Part C typically covers in 2026:

Hospital stays (inpatient care, surgeries, skilled nursing)
Doctor visits and specialist care (with copays instead of 20% coinsurance)
Preventive services (wellness visits, screenings, vaccinations at $0)
Emergency and urgent care (covered even out-of-network)
Prescription drugs (most plans include Part D coverage)
Dental care (routine cleanings, exams — sometimes major work)
Vision care (eye exams, eyeglasses or contact allowances)
Hearing services (hearing exams, hearing aid allowances)
Fitness programs (SilverSneakers or similar gym memberships)
Telehealth services (though availability is declining — only 48% of plans offer remote access technologies in 2026, down from 53%)
Meal delivery and transportation (for qualifying chronic conditions)

Benefit Type	Original Medicare	Medicare Advantage (Part C)	💡 Watch Out
Routine dental	❌ Not covered	✅ Most plans include it	Coverage caps vary — check annual maximums 🦷
Vision/eyeglasses	❌ Not covered	✅ Most plans include it	Allowance amounts are dropping in 2026 👓
Hearing aids	❌ Not covered	✅ Most plans include it	Some plans cap at $500-$1,000/year 👂
Fitness/gym membership	❌ Not covered	✅ Many plans include it	SilverSneakers availability varies by plan 🏋️
Insulin costs	20% coinsurance (Part B)	Capped annually in 2026	No deductible applies to insulin purchases 💉
Mental health parity	Standard cost-sharing	Must match or improve upon Original Medicare in 2026	New CMS requirement for behavioral health 🧠

💡 Critical Insider Tip: Most UnitedHealthcare members will be required to obtain referrals starting in January 2026, which represents a major shift in how care is accessed. If you value specialist access without jumping through hoops, double-check whether your plan now requires referrals that it didn’t before.

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✅ 4. You Must Meet These Specific Requirements to Qualify for Medicare Part C

Eligibility for Medicare Advantage isn’t complicated, but it does have firm guardrails that trip people up — particularly those under 65 who assume they can’t enroll, and those who don’t realize their geographic location matters enormously.

To be eligible for Medicare Part C, you must be enrolled in Medicare Part A and Part B, and be a resident of the Medicare Advantage plan’s service area. You must be a U.S. citizen or permanent legal resident for at least five consecutive years.

The four eligibility pillars:

To enroll in Original Medicare (and therefore be eligible for Part C), in general, you must qualify by being at least 65 years old, or meet one of these alternative pathways:

Disability: If you’ve received monthly Social Security or Railroad Retirement Board disability benefits for 24 months, you’re eligible for Original Medicare
Als diagnosis: If you’ve received a diagnosis of amyotrophic lateral sclerosis, you become eligible for Medicare immediately upon collecting Social Security disability insurance benefits
End-stage renal disease: If you have end-stage renal disease, you’re eligible for Medicare with coverage that could start as soon as your first month of dialysis treatment

Eligibility Requirement	Details	💡 Common Mistake
Medicare Parts A & B enrollment	Must have both active	Enrolling in Part A only won’t qualify you 🚫
Service area residency	Must live in the plan’s coverage zone	Moving to a new county may void your plan 🏠
U.S. citizenship or legal residency	5+ consecutive years	Green card holders qualify after 5 years 🇺🇸
Age 65+ or qualifying condition	Disability (24 months), ALS, or ESRD	Under-65 disability enrollees often don’t know they qualify ♿

Enrollment windows that matter in 2026:

Initial Enrollment Period: The 7-month window surrounding your 65th birthday (3 months before, your birthday month, 3 months after)
Annual Election Period: October 15 – December 7 each year (changes take effect January 1)
Medicare Advantage Open Enrollment Period: January 1 – March 31 (allows one plan change if already enrolled)
Special Enrollment Periods: Triggered by qualifying life events like moving, losing employer coverage, or — new for 2026 — discovering that plan finder directory information contained errors about your providers

💡 Critical Insider Tip: As many as 2.9 million Medicare Advantage enrollees are being forced to find new plans in 2026 following a sharp rise in insurers exiting markets across the country, according to a new analysis by researchers at the Johns Hopkins Bloomberg School of Public Health. If your plan was terminated, you may have a Special Enrollment Period to find alternative coverage — don’t wait until open enrollment if this affects you.

💊 5. Medicare Part D Prescription Drug Coverage Got a Historic Overhaul — Here’s What $2,100 Really Means for You

Whether you get Part D through a standalone plan or bundled into your Medicare Advantage coverage, the prescription drug landscape in 2026 has undergone its most dramatic transformation in years — thanks to the Inflation Reduction Act continuing to reshape how Americans pay for medications.

Part D enrollees will face a $2,100 cap on annual out-of-pocket prescription drug expenses in 2026, up from $2,000 in 2025, when the cap was introduced. Once you hit that threshold, your plan covers 100% of covered medications for the rest of the calendar year — a protection that didn’t exist before 2025, when the old cap was a staggering $8,000.

The other landmark change: the debut of new lower prices on 10 Part D drugs selected for price negotiations, with nearly 9 million Medicare Part D enrollees expected to save an estimated $1.5 billion in out-of-pocket costs. These negotiated prices cover medications for diabetes, heart disease, autoimmune conditions, and cancer.

2026 Part D Feature	Details	💡 What It Means for You
Annual out-of-pocket cap	$2,100	After this, $0 for all covered drugs the rest of the year 🎯
Maximum deductible	$615	Many plans charge less or nothing 💰
Donut hole (coverage gap)	Eliminated (since 2025)	No more surprise gap in coverage 🍩❌
Insulin cost cap	$35/month	No deductible applies to insulin purchases 💉
Negotiated drug prices	10 medications at lower costs	15 more drugs negotiated for 2027 📉
Prescription Payment Plan	Auto-renewed for 2026	Spreads costs into monthly installments 📅
Vaccines	$0 cost for all ACIP-recommended	No deductible or copay for covered vaccines 🩹

💡 Critical Insider Tip: The Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs into equal monthly installments instead of paying everything upfront at the pharmacy. New for 2026, participation in the plan will automatically renew from year to year unless you opt out. If you enrolled in 2025, you’re already in — but verify your monthly amounts have been recalculated for 2026 costs.

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🔬 6. Medicare Part B Covers More Than You Think — But That 20% Coinsurance Can Wreck Your Budget

Part B is the medical insurance component that covers outpatient services, and understanding it is essential whether you stay with Original Medicare or switch to Part C (since your Part C plan replaces your Part B coverage structure).

Medicare Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A.

The critical difference: under Original Medicare Part B, you pay 20% coinsurance on most services after your $283 annual deductible — with no cap on how high that 20% can go. Under Medicare Advantage Part C, that unlimited coinsurance is typically replaced with fixed copays and an annual out-of-pocket maximum.

Part B Coverage	2026 Cost Under Original Medicare	Typical Part C Alternative	💡 Key Difference
Monthly premium	$202.90	$202.90 (still required)	You pay this either way — no escape 💸
Annual deductible	$283	Varies by plan (often $0)	Many Part C plans waive this entirely ✅
Doctor visits	20% coinsurance	$0-$45 copay	Fixed copay = predictable costs 🩺
Outpatient surgery	20% coinsurance	$100-$350 copay	Coinsurance on a $50,000 procedure = $10,000 😱
Preventive screenings	$0	$0	Both cover preventive care fully 🛡️
Durable medical equipment	20% coinsurance	20% coinsurance or copay	Wheelchairs, oxygen, walkers covered 🦽
Mental health (outpatient)	20% coinsurance	Must match or beat Original Medicare	New 2026 parity requirement 🧠

💡 Critical Insider Tip: The increase in the 2026 Part B standard premium and deductible is mainly due to projected price changes and assumed utilization increases. However, CMS noted that without their intervention on skin substitute pricing, the premium increase would have been about $11 more per month. This signals that regulatory action directly impacts your premiums — something to watch in coming years.

⚠️ 7. The 2026 Medicare Advantage Market is in Upheaval — And Millions of Seniors Are Caught in the Middle

This is the section that most Medicare Part C guides conveniently leave out, but it’s arguably the most important information for anyone making coverage decisions right now.

Medicare Advantage growth continues to slow as health insurance giants pull back on the program, rattled by shrinking profits. The numbers tell a stark story: total Medicare Advantage enrollment continued to increase, although at a slower rate of growth than in prior years, with growth dropping to roughly 3% — a fraction of the historical 9-10% annual increases.

Major insurers are reshaping the entire landscape. UnitedHealthcare is exiting 225 counties, while entering only 14 new counties, and Humana is exiting 198 counties while entering only five new counties. Meanwhile, approximately 10% of Medicare Advantage policyholders enrolled in non-employer HMO or PPO plans will experience forced disenrollment this year when their current plan exits their county.

2026 Market Reality	What’s Happening	💡 What to Do
Plan terminations	2.7-2.9 million beneficiaries affected	Check your Annual Notice of Change immediately 📬
UnitedHealthcare	Lost 530,000+ enrollees since 2025	Verify your plan still exists in your county 🔍
Humana	Gained 1.2 million members (now 7M+)	May overtake UnitedHealthcare as #1 insurer 📈
Benefit reductions	All benefit categories declined in value	Don’t assume 2025 benefits carry over 🚨
Referral requirements	UnitedHealthcare now requires referrals	This is new — check your specialist access ⚕️
Prior authorization	Stricter and more common in 2026	Ask your plan what services need pre-approval ⏳
Smaller insurers	Growing fast — added 734,000 members collectively	Consider less-known insurers with strong star ratings ⭐

💡 Critical Insider Tip: If you used the Medicare plan finder tool to select your 2026 plan but later discovered that the online provider directory contained errors — meaning your preferred doctors or hospitals aren’t actually in-network — you’ll have a special option to change Medicare Advantage plans. This is a brand-new protection for 2026 that could save you from being locked into a plan that doesn’t serve your needs.

🔄 8. Medicare Part C vs. Part D: They’re Not Competitors — Here’s How They Actually Work Together

A surprisingly common source of confusion: many seniors think they need to choose between Part C and Part D. In reality, they serve completely different functions and most often work together seamlessly.

Part C (Medicare Advantage) replaces how you receive your Part A and Part B benefits through a private insurer. Part D is prescription drug coverage that can either be purchased as a standalone plan (if you have Original Medicare) or come bundled inside your Part C plan.

The vast majority of Medicare Advantage plans for individual enrollment (89%) include prescription drug coverage, meaning most Part C enrollees already have Part D built in. If your Part C plan includes drug coverage, you cannot also enroll in a separate standalone Part D plan.

Comparison	Medicare Part C	Medicare Part D	💡 Key Distinction
What it is	Hospital + medical + extras	Prescription drug coverage only	Part C often includes Part D 🔗
Who offers it	Private insurers (HMOs, PPOs)	Private insurers (standalone PDPs)	Both are CMS-regulated 🏛️
Average 2026 premium	$14.00/month	$34.50/month (standalone)	Bundled Part D in MA costs ~$11.50/month 💰
Required?	Optional	Optional (but penalized if delayed)	Late Part D enrollment carries a permanent penalty ⚠️
Out-of-pocket cap	$9,250 (medical)	$2,100 (drugs)	These are separate caps 📊
Works with Medigap?	No — cannot have both	Yes — pairs with Original Medicare	This is a crucial either/or decision 🔀

💡 Critical Insider Tip: The Part D late enrollment penalty is permanently added to your premium if you go 63 or more consecutive days without creditable drug coverage after your initial enrollment period. The penalty is calculated by multiplying 1% times the national base beneficiary premium ($38.99 in 2026) times the number of full uncovered months. Even a two-year gap could mean an extra $9+ per month for life.

❓ Frequently Asked Questions

Can I have both Medicare Part C and a Medigap (supplemental) policy? No. Federal law prohibits you from purchasing or using a Medigap plan while enrolled in Medicare Advantage. You must choose one path: Original Medicare + Medigap + standalone Part D, or Medicare Advantage (Part C) with built-in protections. If you switch from Part C back to Original Medicare, you may face medical underwriting for Medigap depending on your state and timing.

What happens if my Medicare Advantage plan leaves my county in 2026? You’ll receive an Annual Notice of Change, and you’ll qualify for a Special Enrollment Period to select a new plan. If no suitable alternative exists, you can return to Original Medicare and enroll in a standalone Part D plan and potentially a Medigap policy.

Are Medicare Advantage plans cutting benefits in 2026? Yes. Across the industry, benefit values have decreased in every major category for 2026. Dental, vision, and hearing allowances in many plans have been reduced, and supplemental perks like grocery allowances and transportation benefits may have tighter eligibility requirements.

Do I still pay the Part B premium with Medicare Advantage? Absolutely. The $202.90/month Part B premium is required regardless of which Medicare path you choose. Some Medicare Advantage plans offer a “Part B premium buydown” that partially offsets this cost, but this benefit has also declined.

Can I get Medicare Part C if I’m under 65? Yes — if you qualify for Medicare through disability (after 24 months of receiving Social Security disability benefits), an ALS diagnosis, or end-stage renal disease. Once you have Parts A and B, you’re eligible for Part C in your service area.

What’s the best way to compare 2026 Medicare Advantage plans? Use the official plan comparison tool at Medicare.gov, verify that your specific doctors and medications are covered, check the plan’s CMS star rating (prioritize 4-star and above), and carefully read the Evidence of Coverage document before enrolling. Given the directory errors that have affected some enrollees this year, call your providers directly to confirm network participation.

Sources: Centers for Medicare and Medicaid Services (CMS) 2026 premiums and deductibles fact sheet; Kaiser Family Foundation (KFF) Medicare Advantage 2026 enrollment and benefits analyses; Johns Hopkins Bloomberg School of Public Health forced disenrollment research (JAMA, February 2026); National Council on Aging (NCOA) 2026 cost projections; AARP 2026 Medicare Part D changes; USAGov Medicare eligibility guidance; Medicaid.gov dual-eligibility data; Milliman 2026 Medicare Advantage plan valuation.

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