Medicare can be a little confusing at first, but we’re here to help.
One may not know where to start when it comes to evaluating the available options. This guide provides a walkthrough of things to consider when choosing a Medicare plan.
Cost
Premiums, deductibles, and copays must still be paid whether a person chooses Original Medicare or a Medicare Advantage plan. These are known as out-of-pocket expenses.
Original Medicare Part A – Hospital
Approximately 99% of Medicare beneficiaries don’t have to pay a Part A premium as they have worked and paid Medicare taxes for at least 40 quarters while working. If a person needs to purchase Part A, they must pay a premium based on the time they or their spouse has worked and paid Medicare taxes.
Original Medicare Part B – Medical
There is a yearly deductible in addition to a monthly Part B premium. Once the deductible is met, a person typically pays 20% of Medicare-approved services.
Part C – Medicare Advantage
Private insurers provide Medicare Advantage plans. Monthly premiums vary, but many plans have low or no monthly premiums. The insured must continue to pay their Original Medicare Part B premium on a monthly basis.
Part D – Prescription Medications
Original Medicare doesn’t cover prescription drugs but can be supplemented with a separate prescription drug plan. Medicare-approved private insurance companies provide part D plans. The monthly premium, deductible, and copayments will differ depending on the plan selected.
Supplemental Medicare Insurance (Medigap)
If a person enrolls in Original Medicare, they can opt for a Medicare Supplement Insurance plan. These plans are intended to help with out-of-pocket expenses such as deductibles and copays. The benefits of these plans are the same for all insurance companies, though some may provide additional benefits.
Coverage
Original Medicare (Part A & Part B)
Original Medicare, administered by the federal government, consists of Parts A and B. Prescription drugs, dental care, vision care, and hearing aids are typically not covered.
Medicare Advantage
Private insurance companies approved by Medicare provide Medicare Advantage plans (Part C). It includes everything covered by Original Medicare Parts A and B.
Prescription drug coverage is standard in most Medicare Advantage plans, and additional benefits such as routine dental, vision, and hearing care may be included.
A Medicare Advantage plan has a monthly premium, though many plans have low or no premiums. Use healthcare providers and facilities within the plan’s network to avoid additional out-of-pocket costs.
Part D – Prescription Drug Plans (PDP)
Private insurers provide stand-alone prescription drug plans, so premiums, deductibles, and copays vary by plan. One should verify whether their plan covers their medication because each one has a unique list of drugs that it covers.
