Your Medicare options come down to sticking with Original Medicare, switching to Medicare Advantage, adding a Medicare Part D plan, and adding a Medicare Supplement plan. The ways you compare these options are the same as those you use to compare your options between plans of the same type: coverage, cost, and your healthcare needs.
Coverage and Cost
Compare the coverage offered by each plan. Original Medicare and Medicare Advantage plans are standardized to cover Part A and Part B covered services, items, and tests, but Medicare Part D plans and Medicare Advantage Prescription Drug plans can vary widely in which prescription drugs they choose to cover. Make sure that your healthcare needs are satisfied by the coverage in the plans you are considering.
Costs will vary between plans. Understanding the relationship between the cost-sharing of deductibles, copayments, and coinsurance will help you see which plans may end up charging you more if you need healthcare services. Think about your budget and your typical or anticipated healthcare spending when comparing plan pricing.
Healthcare Needs
Your health is the whole point of retaining this coverage. Keep it top of mind when making your health insurance decisions.
The more healthcare services you use, the higher your costs may be. If you have regular doctor visits, take medications, require therapy, or otherwise consistently need medical treatment, you should make sure that you have the coverage needed for all of these services, items, and tests.
People with more healthcare needs may want to consider a Medicare Advantage plan or Medicare Supplement plan. These plans will help to control your out-of-pocket costs for Part A and Part B expenses. Typically, Medicare Advantage plans are more affordable, but Medicare Supplements provide better cost control.
Original Medicare vs. Medicare Advantage
Original Medicare is Part A and Part B, which is your hospital and medical insurance. Medicare Advantage plans are offered by private health insurance companies and cover the same Part A and Part B covered services.
Original Medicare does not have an out-of-pocket limit, which means you could end up paying thousands of dollars toward your healthcare with no relief. Costs for Medicare Advantage plans vary between plans.
Medicare Advantage plans use networks of healthcare providers and charge you more or provide no coverage if you see providers outside of your network. These networks are also location-based and specific to your region. With Original Medicare, you can see any healthcare provider who accepts Medicare, which vastly increases the range of your coverage.
Medicare Advantage Prescription Drug Plans vs. Medicare Part D
Some Medicare Advantage plans offer the same coverage as Medicare Part D prescription drug plans; they are called Medicare Advantage Prescription Drug (MAPD) plans.
Medicare Advantage Prescription Drug plans give you a combination policy of Part A, Part B, and Part D coverage. The prescription drug coverage is equivalent between the plan types, but each plan can choose which prescription drugs it covers, adding variation.
With a Part D plan, you would have Original Medicare as your Part A and Part B coverage. This may increase your out-of-pocket costs and add a hint of inconvenience with using more than one plan.
It may be easier to find a Medicare Part D plan that covers your prescriptions than a Medicare Advantage Prescription Drug plan that covers your prescriptions. You are only eligible to sign up for plans if you live within the plan’s service area. Although offerings will differ from region to region, you may have a better chance of finding coverage for multiple prescriptions from a Part D plan than an MAPD plan.
Medicare Advantage vs. Medicare Supplements
Medicare Advantage plans and Medicare Supplements vary widely, although both aim to save you money.
Medicare Advantage plans cover your Part A and Part B healthcare needs. Medicare Supplement (Medigap) plans help pay for the out-of-pocket costs from Part A and Part B. These costs can include Part A coinsurance and hospital costs, Part B copayment and coinsurance, your first three pints of blood, Part A hospice care, skilled nursing facility care, the Part A deductible, the Part B deductible (if you became eligible for Medicare before 2020), Part B excess charges, and foreign travel emergency care.
You can only have one: either Medicare Advantage or Original Medicare with a Medicare Supplement.
Comparing Plans of the Same Type
To compare plans of the same type (Medicare Advantage, Part D, Medicare Supplement), think about your own healthcare needs first. Do you require a lot of health care visits, items, tests, or services? If yes, you might be facing higher healthcare costs.
That means you should prioritize a plan that works in your best interest to minimize cost savings and protect your wallet. A plan with a high deductible and low premiums would not work for you, because you would end up spending that full deductible and end up paying more than if you had a plan with higher premiums and better benefits.
Coverage will also come into play. You need to make sure that all of your healthcare services are covered. To apply this to Medicare Supplements, remember that not all plans cover the Part A deductible in full. Is this important to your anticipated healthcare needs? The Part A deductible is charged for each benefit period, which is the time between being admitted as an inpatient and not having received inpatient care for 60 days. You may have to pay the Part A deductible multiple times over the year. If this worries you based on your hospital usage, look for a Medicare Supplement plan that fully covers the Part A deductible.
When comparing Medicare Advantage plans, you will also find that the provider network is important to consider. You can speak with the benefits manager to inquire about whether a specific provider is in the network or not. If you switch plans, you may have to switch primary care physicians, which can disrupt your care. Some plan types may differ widely on costs related to networks. PPOs are more flexible, allowing you to see providers outside of the network, just with higher costs. These plans also allow you to see a specialist without a referral in most cases. The freedom to see whichever provider you would like to see is important to some people. Ask questions about these matters before you sign up for a plan.
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