Find your ideal Medicare plan: A step-by-step guide
Do you find it difficult to decide which type of healthcare coverage to choose from the plethora of choices available? Having choices is generally a good thing. However, when there are thousands of options available, how do you decide?
You have a lot of options when it comes to Medicare. You may wish to keep traditional Medicare Parts A and B. In this case, you’ll probably want to sign up for a Medicare Part D (prescription drug) plan as well, to ensure you’ll be covered for your medications. Or, you might also consider signing up for a Medicare Advantage plan, which combines traditional Medicare with prescription drug coverage. Lastly, you may want to consider a Medigap (supplemental) plan which gives you a lot of coverage, but doesn’t have prescription drugs included.
Sounds confusing? Fortunately, you can get assistance. An experienced and independent Medicare advisor will provide information about Medicare plans, answer your questions, and help you decide which plan is best for you.
However, you should also know some basic facts before you talk to your advisor:
What to know about traditional or original Medicare
Known as traditional or original Medicare, Medicare Parts A and B were introduced in 1965. Inpatient hospital coverage is provided by Medicare Part A, which is free for most people who have worked and paid Medicare taxes for at least 10 years. Outpatient medical expenses are covered by Medicare Part B.
People with traditional Medicare can see any doctor they want at any medical facility they choose without a referral, as long as Medicare patients are accepted.
Unfortunately, the benefits of traditional Medicare are limited. For example, it does not cover prescription drugs, so you really want to add additional drug coverage to your original Medicare plan.
This is where Medicare Part C (also called ‘Advantage Plans’) and Medicare Part D (Prescription drug plans) come into play.
Medicare Part C (Advantage Plans)
Medicare Advantage plans replace your original Medicare Parts A and B, and almost all of them add additional health care benefits. Many include prescription drug coverage and even vision or dental.
You can purchase Advantage plans at a private insurance company. Each Medicare Advantage plan provider must by law adhere to specific regulations, and the plan’s coverage must be at least as good as traditional Medicare. If an Advantage plan includes prescription drug coverage, it must also meet minimum Medicare Part D standards.
Private insurers for Medicare Advantage plans offer many options with various benefits. Most plans use a specific network of providers, organized in health management organizations (HMO), preferred provider organizations (PPO), or PFFS (Private Fee For Service). In order to be covered you must use the plan’s network of health care providers.
Medigap / Medicare Supplement plans
Another option, as an alternative to Advantage plans, are Medigap or Medicare supplemental plans, also sold by private companies. These plans were created to fill some of the “gaps” in traditional Medicare by helping you pay some of the expenses that are not paid by Medicare itself. Unlike Advantage plans, Medigap plans don’t replace Original Medicare but supplement it. They are standardized and labeled with letters A, B, D, G, K, L, M and N. This means, each insurer offering such a standardized plan must offer the exact same benefits, but is free to set its premium, therefore it may be wise to compare different companies.
As no Medigap plan covers prescription drugs, you should consider adding a ‘Medicare Part D’ plan (see below) if you select to go with a Medigap policy.
BTW, you can’t have a Medigap plan and Medicare Advantage at the same time, so you need to decide on one or the other.
Medicare Part D (Prescription drug plans)
Part D plans help you pay for prescription drugs and are also sold by private insurance companies, and the minimum coverage is regulated by law. You can combine prescription drug plans with Original Medicare, with Advantage plans (unless the Advantage plan has already drug coverage included), or with Medigap plans..
Which option is best for you and your healthcare needs?
If you are overwhelmed by these many choices, you may consider contacting an experienced and independent advisor to assist you with your decision. Also, the official Medicare.gov website may be a good place to start.
