When it comes to health care coverage, there’s no easy, one-size-fits-all solution. Do you need a Medicare Advantage or Medigap policy? Can you stay with your current doctor? How do prescription drug plans fit in? Your Medicare policy needs to make sense for your personal financial and health requirements, and it’s overwhelming to sift through the thousands of choices available. But don’t worry; there’s a path forward.

Use this article to learn about the different types of available Medicare health plans and what you should keep in mind when choosing a policy to fit your needs.

What’s Covered by Original Medicare?

Let’s start with Original Medicare, the federal government’s health insurance plan for eligible seniors aged 65 and over. It consists of two parts:

  • Part A (hospital insurance) for inpatient hospital, skilled nursing, hospice, and home health care
  • Part B (medical insurance) for physician services, ambulances, medical tests, and preventive screenings 

Why You May Want Additional Coverage

Original Medicare doesn’t pay for all of your medical costs, so you’re still responsible for some of your health care expenses, including:

  • Part B and other monthly premiums
  • Insurance deductibles
  • Cost-sharing, such as co-payments and coinsurance
  • Prescription drugs
  • Vision care
  • Dental cleanings
  • Hearing exams
  • Medical care when traveling internationally

To help pay for some of these costs, you can supplement Original Medicare with a plan such as:

You also have the option to replace Original Medicare with a Medicare Advantage (Part C) policy from a private insurer. This provides:

  • Part A and B coverage
  • Additional supplemental benefits such as medical, dental and prescription drugs

Keep in mind that you can’t subscribe to Original Medicare/Medigap and Medicare Advantage at the same time, so be sure to understand the differences when shopping for a policy.  

Here’s how to decide which Medicare plan to use.  

1. Determine Your Health Care Needs

Start by listing what you need your insurance to cover to accommodate current and future health care needs. To narrow down the type of plan you want, consider:

  • How often you need certain services 
  • What you spend on recurring expenses such as prescriptions, treatments, and specialists
  • Whether you’re satisfied with the basics covered by Original Medicare or want additional benefits such as vision, dental, hearing, and prescription drug coverage

2. Consider How You Want to Receive Your Health Care

Original Medicare offers the flexibility to choose your health care providers.

  • You can use any doctor, hospital, or provider that you wish, as long as they’re enrolled in Medicare.
  • You aren’t required to have a primary care doctor.
  • You can see a specialist without a doctor’s referral.

When you switch to Medicare Advantage, you may be limited in the doctors or health care providers you see.

  • Health Maintenance Organization (HMO) plans require you to have a primary care doctor to coordinate your care and refer you to specialists. You must use a health care provider within the plan’s network unless you’re willing to pay the full cost yourself.
  • Preferred Provider Organization (PPO) plans enable you to coordinate your own care without a primary care doctor and see a specialist without a referral. Although you can use any health care provider, it’s usually cheaper to use one in their network.
  • Private Fee-for-Service (PFFS) plans allow you to coordinate your own care without a primary doctor and see a specialist without a referral. The plan sets the fees it’s willing to pay, and you can see any provider that accepts these pre-established rates.
  • Special Needs Plans (SNPs) are designed for those with chronic conditions such as end-stage renal disease, HIV/AIDS, and chronic heart failure. SNPs usually provide access to specialists and care tailored to your needs. 

3. Compare the Costs of Different Plans

It’s time to bring out your calculator. Choosing an insurance plan involves some number-crunching based on how you expect to use the benefits. Here are common costs to remember:

Monthly Premiums

Whether you’re in Original Medicare or Medicare Advantage, you still pay Plan B premiums. If you choose a plan outside of Original Medicare, you may also pay a monthly premium to a private insurance company.

According to the Kaiser Family Foundation (KFF), in 2020, 60% of people enrolled in a Medicare Advantage plan with prescription drug coverage paid no monthly premium besides the Plan B premium. The average cost for those who did pay premiums was $60 per month. 

While zero-premium plans are easier on your pocketbook at the start, you may encounter higher co-payments or coinsurance when you do need health services. You might also have a more restrictive network of providers that you can use.

Deductibles

Your policy may have an annual deductible as well as deductibles for certain services, so know how much you’re required to pay out-of-pocket before your insurance plan pays. Higher deductibles mean you have to finance more of your costs up-front, but you may have less cost-sharing later.

For example, many Medicare Advantage plans charge a co-payment from the first day of a hospital stay. In 2020, Original Medicare had a $1,408 deductible for inpatient hospital stays but no co-payment until day 60 of hospitalization. Based on this, a KFF study found that on average:

  • A three-day hospital stay is typically cheaper for those on a Medicare Advantage plan
  • A five-day hospital stay is cheaper for about half of those on a Medicare Advantage plan
  • A seven-day hospital stay offers more savings with Original Medicare

Cost-Sharing

When you receive health care services or buy prescriptions, you often pay a percentage of the cost (coinsurance) or a flat fee (co-payment) each time.

Consider how much the cost-sharing is for the services you expect to use and check the plan’s limit on annual out-of-pocket costs. Once you hit that cap, you don’t need to pay additional expenses.

4. Consider Prescription Drug Coverage

Medicare suggests that you may want to add Medicare Part D to your Original Medicare once you’re eligible or opt for a Medicare Advantage Plan with drug coverage.  Although you may not need prescription coverage right away, you can incur a permanent penalty if you wait to join a drug plan. A low- or no-monthly premium plan that meets your other needs may be a good option.

NOTE: If you require certain medications, make sure any prospective plan covers them before enrolling.

5. Decide Which Supplemental Benefits You Need

Original Medicare covers essential medical needs. But if you want supplemental health benefits, consider a Medicare Advantage policy. Benefits vary by plan and include:

  • Prescription drug coverage
  • Basic dental care
  • Eye exams and prescription eyeglasses
  • Hearing aids
  • Gym memberships and fitness programs (such as SilverSneakers or Silver&Fit)
  • Nonemergency transportation to medical appointments and treatments
  • Meal delivery benefits
  • Home safety equipment such as bathroom grab bars

Consider which benefits are most important to you. If you’re unlikely to use a fitness membership, for example, you might look for a plan that offers basic benefits with lower premiums or cost-sharing.

Questions to Ask When Choosing a Plan

To sum up, health plans differ greatly in terms of:

  • Premiums
  • Benefits
  • Choice of health care providers
  • Out-of-pocket costs
  • How health care is delivered

To choose a plan that’s right for you, decide which features are priorities and which you’re flexible on. Here are some questions to help you decide.

  • What are your total monthly premiums, including Part B?
  • How much is the deductible?
  • What share of doctor’s visits, hospital stays, and prescription drugs do you pay?
  • How much do you have to pay out-of-pocket before your costs are capped?
  • Can you visit your current doctor? If not, which doctors can you see?
  • Can you coordinate your own care and see a specialist without a referral?
  • What happens if you need medical attention outside of your plan’s service area?
  • Are your specific prescription drugs covered?
  • What kinds of supplemental benefits does the plan provide? How much will you use them?
  • Do you have other health insurance coverage, such as a plan from an employer? How do the plans work together?

The good news is that you can change your enrollment at certain times of the year if your plan isn’t meeting your needs.

How to Get Started

Now that you know what to consider when shopping for Medicare coverage, it’s time to find the plan that best meets your needs. 

For personalized service, turn to our team at TrueCoverage. Our insurance experts can answer your questions and help you enroll in a plan that provides affordable care for you and your family. As a result of our partnerships with over 600 trusted insurance companies, we offer one-stop shopping and can help you easily compare multiple insurance quotes. We can make sure you’re accessing the premium tax credits and insurance subsidies that you’re eligible for.

Finding the best Medicare plan doesn’t have to be stressful. Let our experts help you find the right plan for your needs by calling (888) 505-1815 or emailing us at [email protected].