Medicare Part C and Part D are two separate but related pieces of the Medicare system, both offered through private insurance companies approved by Medicare. Part C (Medicare Advantage) is an alternative way to receive your hospital and medical coverage, bundled into one plan that often includes extras like dental and vision. Part D is prescription drug coverage you can add to Original Medicare or that comes built into most Medicare Advantage plans.
How Medicare Part C Works
Medicare Part C, commonly called Medicare Advantage, replaces Original Medicare (Parts A and B) with a single plan from a private insurer. Instead of the government directly covering your hospital stays and doctor visits, a private company handles all of that through one plan. Most Medicare Advantage plans also bundle in Part D drug coverage, so you get hospital, medical, and prescription benefits under one roof.
Many Medicare Advantage plans offer benefits that Original Medicare does not cover at all, including routine dental care, vision exams, hearing aids, and fitness programs. The trade-off is that these plans typically require you to use doctors and hospitals within a specific network. If you go out of network for non-emergency care, you’ll either pay more or the plan won’t cover it at all. Some plan types, like HMOs, also require a referral from your primary care doctor before you can see a specialist. With Original Medicare, you can see any doctor or hospital in the country that accepts Medicare, and you rarely need a referral.
Part C Costs and Spending Limits
Most Medicare Advantage plans charge a monthly premium on top of your Part B premium, though some plans advertise $0 additional premiums. What you actually pay depends on copays, coinsurance, and deductibles that vary from plan to plan.
One significant advantage over Original Medicare is a built-in cap on your annual out-of-pocket spending. Original Medicare has no such cap, meaning costs can pile up indefinitely in a bad year. In 2025, Medicare Advantage plans cannot set their in-network out-of-pocket limit higher than $9,350, and plans that include out-of-network coverage are capped at $14,000 for combined in-network and out-of-network services. In practice, the average enrollee’s plan sets the in-network limit closer to $5,320.
How Medicare Part D Works
Part D is Medicare’s prescription drug benefit. It covers both brand-name and generic medications, and it’s offered exclusively through private insurance companies approved by Medicare. If you stick with Original Medicare (rather than choosing a Medicare Advantage plan), you can add a standalone Part D plan to cover your prescriptions. If you enroll in a Medicare Advantage plan, drug coverage is usually included.
Part D is technically optional, but skipping it when you don’t have other creditable drug coverage triggers a late enrollment penalty. You’ll pay an extra 1% of the national base beneficiary premium for every month you went without coverage, and that penalty stays on your bill for as long as you have Part D. For context, the national base beneficiary premium is $38.99 in 2026, so a two-year gap (24 months) would add roughly $9.36 per month to your premium, permanently.
The $2,000 Out-of-Pocket Cap on Drugs
Starting in 2025, Part D plans include a hard cap of $2,000 per year on what you pay out of pocket for covered prescriptions. This is a major change from previous years, when the program had a coverage gap (nicknamed the “donut hole”) that left people responsible for a large share of their drug costs in a middle spending range.
Once your out-of-pocket spending hits $2,000 in a calendar year, you automatically move into catastrophic coverage and owe nothing more for covered Part D drugs for the rest of that year. This applies whether you have a standalone Part D plan or get your drug coverage through Medicare Advantage.
Higher Premiums for Higher Earners
If your income is above a certain threshold, Medicare adds a surcharge to your Part D premium called IRMAA (income-related monthly adjustment amount). This is based on your tax return from two years prior. In 2025, the surcharges for Part D work like this:
- Single filers earning $106,000 to $133,000 (or married filing jointly $212,000 to $266,000): $13.70 added to your monthly plan premium
- Single filers earning $133,000 to $167,000 (or joint $266,000 to $334,000): $35.30 per month
- Single filers earning $167,000 to $200,000 (or joint $334,000 to $400,000): $57.00 per month
- Single filers earning $200,000 to $500,000 (or joint $400,000 to $750,000): $78.60 per month
- Single filers at $500,000 or above (or joint $750,000 or above): $85.80 per month
If you’re married filing separately, the brackets are different and generally less favorable, with the surcharge jumping to $78.60 for income above $106,000.
When You Can Enroll
Your first chance to sign up for Part C or Part D is your Initial Enrollment Period, which lasts seven months: it starts three months before the month you turn 65, includes your birthday month, and extends three months after. If you miss that window, you’ll generally need to wait for the Annual Enrollment Period, which runs from October 15 through December 7 each year. During that window, you can join, switch, or drop a Medicare Advantage or Part D plan, with coverage starting January 1.
There’s also a Medicare Advantage Open Enrollment Period from January 1 through March 31, which lets people already in a Medicare Advantage plan switch to a different Advantage plan or drop back to Original Medicare and pick up a standalone Part D plan.
Part C vs. Original Medicare: Key Trade-Offs
Choosing between Medicare Advantage and Original Medicare comes down to what you value most. Original Medicare gives you the freedom to visit any Medicare-accepting provider in the country without referrals, which matters if you travel frequently, split time between states, or see specialists regularly. However, Original Medicare has no annual spending cap, and it doesn’t cover dental, vision, or hearing. Many people on Original Medicare buy a supplemental Medigap policy to cover cost-sharing, plus a standalone Part D plan for drugs.
Medicare Advantage consolidates everything into one plan and often adds those extra benefits. The cost protection of an annual out-of-pocket maximum is a real advantage for people who face expensive medical care. But the network restrictions are a genuine constraint. If your preferred doctors aren’t in a plan’s network, you’ll need to switch providers or pay significantly more. Neither Original Medicare nor Medicare Advantage typically covers non-emergency care outside the United States, though some Medigap policies and some Advantage plans offer limited international emergency coverage.
How to Compare Plans
Medicare rates every Part C and Part D plan on a one-to-five star scale. Medicare Advantage plans with drug coverage are evaluated on up to 43 measures, while standalone Part D plans are rated on up to 12. The ratings cover a broad range: how easy it is to get appointments, whether the plan handles appeals quickly, how well enrollees manage chronic conditions like diabetes, how accurate the plan’s drug pricing is, and how many members choose to leave the plan each year.
Star ratings are a useful starting point, but they don’t tell you whether a plan covers your specific doctors or medications. The most practical step is to check each plan’s provider directory for your doctors and its formulary (drug list) for your prescriptions. A five-star plan that doesn’t cover your medications or include your cardiologist isn’t the right plan for you. You can compare all available plans in your area, including costs, coverage details, and star ratings, through Medicare’s Plan Finder tool at medicare.gov.