When it comes to choosing a Medicare health plan, it can become confusing. Which program is right? Which one covers prescription drugs? Or even, what type of Medicare plans are there? The truth is the answer isn’t simple, but once you understand your choices, making the right decision for your health is easy.
Many assume that Medicare covers everything from hospital visits to physician care in an all-inclusive plan. But, when you qualify for Medicare, you have two main choices: Original Medicare and Medicare Advantage. Each health plan has different premiums, copays, deductibles, and coverage. Within these two health care choices, you also have other options.
When you reach 65 or older, you automatically qualify for Original Medicare. Younger people with disabilities or with end-stage renal disease (ESRN) may also be eligible. It’s a fee-for-service program managed by the federal government. The plan has four parts, including: Medicare Part A (Hospital Insurance): When you choose Original Medicare, you’re automatically enrolled in Part A unless you choose Medicare Advantage. Part A covers inpatient hospital care, skilled nursing facility care, hospice care, and home health care. For most, it isn’t necessary to pay a monthly premium, but when using Medicare services, you may have a deductible and limits on coverage. Medicare Part B (Medical Insurance): Medicare Part B is optional coverage that requires a monthly premium. The standard amount is $135.50 (or higher depending on income), and additional deductibles and copays apply. Part B covers services that Part A doesn’t, including:
Medically necessary services: Covers medically necessary outpatient care, doctors' services, and other medical services.
Preventive services: Health care to prevent illness, provide necessary cancer and diabetes screenings, and ongoing health and wellness checks.
Medicare Part C (Medicare Advantage): If you enroll in Medicare Part A or Part B, you cannot enroll in Part C or Medicare Advantage plans. Approved private companies offer Medicare Advantage plans but still provide the same coverage, plus additional benefits and prescription drug options.
Medicare Part D (prescription drug coverage): Part D covers prescription drug plans through private companies approved by Medicare. Prescription drug plans are optional, and members must pay a monthly premium. Costs depend on drug coverage and convenience.
Medigap Policy or Medicare SupplementaI Insurance:
Medicare Parts A and B offer basic health coverage, and Medicare Supplemental Insurance fills in the gaps. For example, if you want to receive medical care at a facility that doesn't accept Medicare, a Medigap Policy will help you. Private companies offer 12 different plans at various price points based on included services. Medicare approves and standardizes all selections. Medicare Advantage or Medicare Part C is a privately-run alternative to Medicare (Parts A and B). Your Medicare dollars cover Medicare Advantage, but you still have a monthly premium. Cost varies by plan. Instead of purchasing a Medicare Supplemental Insurance policy, you may choose Medicare Advantage to cover what Medicare doesn't include in its plan offerings.
Medicare Advantage offers the same healthcare services as Medicare, plus other benefits. Most plans also include prescription drug coverage. There are two plan choices:
Health Maintenance Organizations (HMO)
Preferred Provider Organizations (PPO)
In an HMO or PPO Medicare Advantage plan, the patient may access health services, such as doctor visits, inpatient, and outpatient care, within a network of approved doctors and hospitals. The primary care physician in the HMO network must approve specialty visits, while PPO members don't need prior approval. However, both plans may not cover visits outside of the system.
When it comes time to choose your Medicare health plan, you can decide how you'd like to receive your Medicare coverage. It's also important to remember that you can make changes during certain times of the year. The following Medicare guidelines can help you make the best decision for your health.
Choose between Original Medicare (Parts A and B) or Medicare Advantage (Part C):
While both choices cover essential health care, Medicare Advantage is more comprehensive. Depending on the tier, it could include prescription drug coverage, vision and dental services, and lower copays and deductibles. While out-of-pocket costs may be lower with Medicare Advantage, the initial premiums may be higher.
Decide if you want prescription drug coverage:
If you choose Original Medicare, investing in supplemental prescription drug insurance may be smart. For those selecting a Medicare Advantage plan, most plans cover prescriptions.
Determine if you want supplemental coverage: Original Medicare covers basic health services. If you need to manage chronic illnesses, serious medical concerns, or nursing care, the out-of-pocket costs could become unmanageable.
Take cost into consideration: Choosing which plan is right for you has a lot to do with your finances and health. What monthly premium can you afford? How healthy are you? Would you rather pay a higher premium but have fewer out-of-pocket costs? When you answer these questions, making a decision becomes easier.
Consider choice and lifestyle: Medicare Advantage plans generally operate in specific regions, and you have to choose from approved network providers. If you spend time in different areas throughout the year, you may want Original Medicare plus Medigap coverage. You can go to any hospital that accepts Medicare.
Figuring out what Medicare health plan that's right for you may take time and consideration. The specific benefits and costs vary by plan choice and income. When you begin to explore the world of Medicare, it's easy to become overwhelmed. But when you understand the difference between Original Medicare and Medicare Advantage, along with the benefits and drawbacks of each, you'll be able to make the best choice for you.