Taking the first steps toward learning about Medicare plans can seem overwhelming, but it’s important to get informed so you can get the right coverage for your needs. For those approaching age 65 or people under 65 with certain disabilities, familiarizing yourself with Medicare coverage is important. Medical expenses can be one of the biggest costs you face, making your choice of coverage important for not only your health, but your budget, too. Let’s walk through the considerations you need to be aware of when choosing a Medicare plan.
Understanding Your Main Medicare Choices
When approaching Medicare enrollment, you have two primary paths to consider: Original Medicare or Medicare Advantage (Part C). Original Medicare is the government-administered program that includes Part A (hospital insurance) and Part B (medical insurance), but you may also want to consider adding a stand-alone Part D prescription drug plan and a Medigap (Medicare Supplement Insurance) policy to help cover out-of-pocket costs. Alternatively, Medicare Advantage plans offer the same coverage as Original Medicare but may include routine benefits not covered by Original Medicare.
The Difference Between Original Medicare and Medicare Advantage
Original Medicare includes both Part A and Part B and is offered through the government. Medicare Part A helps cover most inpatient hospital care, skilled nursing homes, and home health and hospice care. Medicare Part B covers medically necessary services like doctor visits and preventive care.
Medicare Advantage plans—also known as Medicare Part C—provide an alternative to Original Medicare. These plans, which are sold by private insurers approved by Medicare, are legally required to offer at least the same benefits as Original Medicare, but often include additional routine benefits.
Additional Medicare Plan Options
When reviewing your options for Medicare plans, you may consider supplemental coverage options, such as Medicare Part D. Medicare Part D—also known as Medicare Prescription Drug plans—helps cover the cost of brand-name and generic prescription medications for Medicare beneficiaries. A Medicare Part D plan can be purchased as a standalone plan, to supplement Original Medicare, or to accompany a Medicare Supplement plan.
You may also consider a Medigap plan. Medigap plans, also known as Medicare Supplement Insurance, are private health insurance policies designed to help "fill the gaps" in Original Medicare (Part A and Part B). They work as a secondary form of insurance, paying for out-of-pocket costs that Original Medicare doesn't cover, such as coinsurance, copayments, and deductibles. If you’re considering a Medigap plan, you should keep in mind that you cannot be enrolled in a Medigap plan and a Medicare Advantage plan at the same time.
Essential Questions to Ask When Choosing a Medicare Plan
Choosing a Medicare plan is an important decision that can significantly impact both your health care and your finances. With various options available, from Original Medicare to Medicare Advantage plans, asking the right questions is the first step toward finding a plan that truly fits your unique needs and lifestyle.
How much will I have to pay for coverage?
How much you pay for a Medicare plan will depend on factors like premiums, deductibles, copays, and coinsurance. These costs vary by plan type and impact your out-of-pocket expenses. Your total cost for a Medicare plan is a mix of three main factors: premiums, deductibles, and copays/coinsurance. The premium is your predictable monthly bill, which you pay to have coverage, regardless of whether you use medical services. For Original Medicare, you'll pay a monthly premium for Part B, and some people may also pay a premium for Part A.
Medicare Advantage plans, Medicare Supplement plans, and Part D plans also have their own monthly premiums, which can vary widely. Generally, plans with lower premiums may have higher out-of-pocket costs, and vice versa. The deductible is the amount of money you must pay for covered services each year before your insurance begins to pay its share. After you've met the deductible, you then pay a portion of the costs for each service, which can be either a fixed copayment (a set dollar amount, like $20 for a doctor's visit) or a coinsurance (a percentage of the service's cost, such as 20%).
Understanding these components is essential because a plan with a low monthly premium might have a high deductible and coinsurance, leading to higher costs if you need frequent medical care. Conversely, a plan with a higher premium may have a lower deductible and more predictable copays, which can be more cost-effective if you anticipate needing many services.
Can I keep my current doctors and hospitals?
A person can determine if their current doctors and hospitals are covered by first understanding the type of Medicare plan they are considering. With Original Medicare, you can generally see any doctor or visit any hospital in the U.S. that accepts Medicare. You can confirm this by asking your provider, "Do you accept Medicare?" or by using the official Medicare.gov "Care Compare" tool. For private plans like Medicare Advantage (Part C), the process is different because they use provider networks. An HMO plan typically requires you to use in-network doctors and get a referral to see a specialist, while a PPO plan allows you to see out-of-network providers at a higher cost. To confirm if a specific doctor is in a Medicare Advantage network, the most reliable methods are to use the insurance company's online provider directory or to call the doctor's office directly and ask if they are in-network for the specific plan you're considering.
Is my prescription drug coverage included?
When you enroll in a Medicare plan, it's essential to understand if your prescription drug coverage is included. Original Medicare does not automatically cover most outpatient prescription drugs; for this, you must enroll in a separate Medicare Prescription Drug plan (Part D). In contrast, some Medicare Advantage (Part C) plans may include prescription drug coverage—these are known as Medicare Advantage Prescription Drug (MAPD) plans. Regardless of whether you choose a stand-alone Part D plan or a Medicare Advantage plan with prescription drug coverage, it is crucial to check the plan's formulary, which is the plan's list of covered drugs. This step ensures that your specific medications are included and that you understand any potential costs, such as copays or coverage restrictions.
Who can help me choose a Medicare plan?
Finding the right Medicare plan can feel overwhelming, but you don't have to navigate the process alone. Several trusted resources and professionals are available to provide guidance and personalized advice. Knowing who to turn to for help can make all the difference in making an informed decision.
Options for Getting Help
For anyone seeking objective and comprehensive information on Medicare plans, Medicare.gov is the official starting point. The website's "Plan Finder" tool allows you to compare Medicare Advantage and Part D plans available in your area side-by-side, based on your specific needs, including your current medications and preferred pharmacies. For personalized, unbiased assistance, State Health Insurance Assistance Programs (SHIPs) are an invaluable resource. These programs offer free, one-on-one counseling from trained counselors who can help you understand your Medicare options, compare plans, and answer questions about costs and benefits without trying to sell you a product. By utilizing both of these resources, you can make an informed decision that is right for your unique health and financial situation.
The Benefit of Speaking with a Licensed Agent
Working with a licensed insurance agent is another way to make comparing Medicare plans go more smoothly. A SelectQuote agent will listen to your unique healthcare needs and then compare unbiased quotes from Medicare Advantage plan carriers in just minutes. Having a licensed professional walk you through the plan comparison process can help you feel more confident in your coverage decisions.
Determine What’s Right for You with SelectQuote
Take the hassle out of choosing a Medicare plan by working with SelectQuote. In as little as 15 minutes, our licensed insurance agents can take you through a free, no-obligation Medicare Advantage plan review.
