original v. medicare advantage

When did you last compare your Medicare coverage to other potentially cheaper options? Whether you are on Original Medicare with a Prescription Drug Plan and Medigap, or a Medicare Advantage Plan, insurance carriers are capable of changing costs and coverage from year to year.

Luckily, each year there is an Open Enrollment Period from October 15 through December 7, when you can shop around for Medicare coverage that will suit your needs and not break the bank. Medicare is complicated, and it’s equally important for those turning 65 and those already on Medicare to know exactly what type of coverage they can get or have, so they can make informed choices.

There are four parts of Medicare: In short, Part A provides hospital/inpatient coverage and Part B provides outpatient coverage. With Part C (Medicare Advantage), Medicare benefits are packaged and offered through private insurance companies. Part D provides prescription drug coverage. Parts A and B do not cover the entirety of your inpatient/outpatient expenses, so there is one more piece of the puzzle to consider: Supplemental Insurance (Medigap Plans) provides further insurance through a private company to help you pay your Medicare coinsurances.

So what exactly is “Original Medicare”? At its most basic level, Original Medicare is inpatient/outpatient coverage through Part A and Part B. To avoid potential financial disasters and late-enrollment penalties, it is strongly suggested that everyone on Original Medicare also have a Part D prescription plan and a Medigap plan, regardless of their current needs. Coverage under Original Medicare is standardized nationwide, offering more flexibility and certainty in knowing you will be covered wherever you go, with any healthcare provider who participates in Medicare. The drawback is that you are paying a separate premium for Part B, Part D, and your Medigap. (Most people who have worked for 10 or more years qualify for premium-free Part A.)

How about “Medicare Advantage”? These plans, offered by private insurance companies that contract with the federal government, provide a bundle of Medicare coverage: combining Part A, Part B, and typically Part D. They must offer the same benefits as Original Medicare, but are free to incorporate different rules, costs, and restrictions. Some Advantage Plans advertise additional benefits for transportation, meals, fitness, or dental care, but you should always ask for clarification of what is actually covered and to what extent. Medicare Advantage Plans are most commonly HMOs and PPOs, restricting you to in-network providers. Before opting for a Medicare Advantage Plan, it is in your best interest to contact the doctors and hospitals you frequent to make sure they accept the plan you are looking at. In exchange for network restrictions and a different cost sharing system, you will most likely pay a lower premium, with some plans charging no additional monthly premium beyond what you have to pay for Part B ($144.60 in 2020).

Which should I pick? There’s no perfect answer. Your choice should reflect the frequency with which you use healthcare services, the prescription drugs you take, and the restrictions you are willing to accept. The best advice is to educate yourself on the different types of Medicare coverage and to compare your coverage to other options each year. Independent brokers will help you compare plans, but some brokers may provide an incomplete picture if they only contract with specific insurance companies and plans. The Westchester Library System’s Senior Benefits Individual Counseling sites provide free, impartial Medicare counseling. There are also many online resources to learn more, including medicare.gov and medicareinteractive.org.

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