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New to Medicare Series: Part 7

Exploring Your Medicare Options

Now that you have a better understanding of Medicare and how it works, you can begin shopping for the type of coverage that works for you.

Most people have several options when it comes to enrolling in Medicare. Below we take a look at each option and highlight the main points of each.

Medicare Part A Only

If you choose to enroll in Part A only, you will receive coverage for some hospital costs but will not be covered for medical costs such as doctor’s visits and preventive care. This means that you’ll pay 100% of the costs for doctor’s visits and other medical expenses.

If you are automatically enrolled in Medicare and only want Part A, you must disenroll from Part B. But keep in mind that if you drop your Part B coverage and decide you want Part B later, you may have to pay a late enrollment penalty for Part B coverage for as long as you have Part B.

A late enrollment penalty can cause your Part B premium to increase as much as 10% for each full 12-month period that you were eligible for Part B and weren’t enrolled.

Medicare Part A and Part B

If you enroll in Part A and Part B (Original Medicare) you’ll have coverage for hospital and medical costs, including:

  • Inpatient hospital care, hospice care and inpatient care in a skilled nursing facility
  • Medically necessary doctor’s services
  • Durable medical equipment
  • Outpatient care and mental health services
  • Preventive services

Original Medicare does not cover prescription drugs. If you want coverage for prescription drugs, you must enroll in a Medicare Prescription Drug Plan (Medicare Part D).

You can refer to our article, “What Original Medicare Covers” for a list of covered services.

Original Medicare + Medicare Part D

Medicare Part D plans are sold by private insurance companies

If you have Original Medicare and do not enroll in Medicare Part D, you are responsible for 100% of your prescription drug costs.

Eligibility

To be eligible for Medicare Part D, you must be enrolled in Medicare Part A or Original Medicare or you must be enrolled in a Medicare Advantage Plan that does not include prescription drug coverage.

Costs

In addition to your Original Medicare premiums and out-of-pocket costs, you’ll pay a monthly premium for your Part D coverage and a coinsurance or copayment for covered drugs. Specific Part D premiums and out-of-pocket costs vary by plan.

Original Medicare + Medicare Supplement Insurance

Medicare Supplement Insurance, also known as Medigap, is private insurance that helps cover some of Original Medicare’s out-of-pocket costs.

There are 10 standardized Medigap plans to choose from in most states, labeled A, B, C, D, F, G, K, L, M and N. All 10 Medigap plans provide at least partial coverage for:

  • Medicare Part A coinsurance and hospital costs
  • Medicare Part B coinsurance or copayment
  • First 3 pints of blood
  • Medicare Part A hospice care coinsurance or copayment

In addition to those four standardized basic benefits, Medigap plans may offer different combinations of benefits.

The following chart shows how all 10 standardized Medigap plans compare.

2019 Medigap Plan Comparison

Medicare Supplement benefits

A

B

C

D

F*

G

K**

L***

M

N****

Medicare Part A coinsurance and hospital costs

Medicare Part B coinsurance or copayment

50%

75%

First 3 pints of blood

50%

75%

Part A hospice care coinsurance or copayment

50%

75%

Coinsurance for skilled nursing facility

   

50%

75%

Medicare Part A deductible

 

50%

75%

50%

Medicare Part B deductible

   

 

         

Medicare Part B excess charges

       

       

Foreign travel emergency costs

   

80%

80%

80%

80%

   

80%

80%

* Plan F offers a high-deductible plan. This plan requires you to pay a $2,300 deductible (in 2019) before it covers anything.

** Plan K has an out-of-pocket yearly limit of $5,560 (in 2019). After you pay the out-of-pocket yearly limit and the yearly Part B deductible, it pays 100% of covered services for the rest of the calendar year. *** Plan L has an out-of-pocket yearly limit of $2,780 (in 2019). After you pay the out-of-pocket yearly limit and yearly part B deductible, it pays 100% of covered services for the rest of the calendar year.

**** Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don’t result in an inpatient admission

Eligibility

To be eligible for a Medicare Supplement Insurance plan, you must be enrolled in Medicare Part A and Part B. You cannot be enrolled in a Medicare Advantage plan and Medigap plan at the same time.

If you’re younger than 65 and qualify for Medicare because of a disability or medical condition, Medigap availability and costs will vary depending on the state in which you live.

Costs

Insurance companies set their own premiums for Medigap plans, which you pay in addition to your Original Medicare premiums.

Although Medigap costs vary, the benefits of plans that share the same letter do not. For instance, a Medigap Plan F policy purchased in Florida will provide the same benefits as a Plan F policy purchased in New York.  

Note: Medicare Supplement Insurance plans do no provide coverage for prescription drugs. If you need prescription drug coverage, you must enroll in a Medicare Part D plan.

Medicare Advantage

Medicare Advantage, also known as Medicare Part C, is sold by private insurance companies as an alternative to Original Medicare.

Every Medicare Advantage plan must provide at least the same benefits as Medicare Part A and Part B, and many provide additional benefits such as:

  • Prescription drug coverage
  • Vision and hearing coverage
  • Dental coverage
  • Health and wellness program benefits

The following chart shows how Medicare Advantage compares to Original Medicare.

Original Medicare vs Medicare Advantage

Original Medicare

Medicare Advantage

Helps cover some hospital and medical costs

Helps cover some hospital and medical costs

Allows you to choose any doctor, hospital or other provider that accepts Medicare

May require you to stay within a specific network of doctors, hospitals and other providers, depending on the type of plan you choose

Does not require a referral to see a specialist

May require a referral to see a specialist

Does not cover routine dental care

May cover dental care, depending on the plan

Does not cover routine vision care

May cover vision care, depending on the plan

Does not cover most prescription drugs

May cover prescription drugs

Does not offer wellness program benefits

May offer wellness program benefits

Has some out-of-pocket costs, including deductibles, copayments and coinsurance. The specific amounts are set by Medicare.

Has some out-of-pocket costs, including deductibles copayment and coinsurance. The specific amounts are set by the insurance company.

Does not have an out-of-pocket maximum, so there is no limit to how much you could pay out of pocket for care in a given year

Has an annual out-of-pocket maximum, which limits how much you can pay out of pocket for care in a given year

Eligibility

To qualify for a Medicare Advantage plan, you must be enrolled in Original Medicare and live in a Medicare Advantage plan service area. Generally, you must not have End-Stage Renal Disease (ESRD).

Costs

In addition to your Part B premium (which you continue paying with an Medicare Advantage plan), you’ll pay your Medicare Advantage plan premium (if you have one) and your Medicare Advantage out-of-pocket costs (such as deductibles and coinsurance), which vary by plan.

Note: Most Medicare Advantage plans include coverage for prescription drugs. However, if you enroll in an MA plan that doesn’t, you can enroll in a Medicare Part D plan.

How to Enroll

No matter which Medicare option you choose, the first step to enrolling is to sign up for Part A and Part B during your Initial Enrollment Period, which typically begins three months before your 65th birthday.

Once you’re enrolled in Original Medicare, you can replace it with Medicare Advantage or enroll in a Medicare Supplement Insurance plan and/or a Part D plan if you so choose.

A licensed insurance agent can help you compare your Medicare options and get you enrolled in a plan that works for you.

 

New to Medicare Series

Part 1: Medicare 101

Part 2: Glossary of Medicare Terms

Part 3: Understanding Your Medicare Out-of-Pocket Costs

Part 4: Your Guide to Medicare Enrollment Periods

Part 5: What Every Medicare Beneficiary Should Know About Their Medicare Card

Part 6: What Original Medicare Covers

Part 7: Exploring Your Medicare Options

 

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