Options For Medicare Coverage

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To help minimize your out-of-pocket and prescription drug spending, you’ll likely want some kind of coverage beyond Original Medicare. You have two main options here:

Medicare Advantage Prescription Drug Plans (MAPD, or Part C). 40% of Medicare beneficiaries chose Medicare Advantage plans.
Original Medicare plus Medicare Supplement Insurance plus Prescription Drug Plan (PDP). 30% of beneficiaries choose Medicare Supplement coverage and Prescription Drug Plan coverage.

While pricing, ability to see some certain doctors, and out of pocket costs differ between these two approaches, they both provide comprehensive coverage. See the graphic below for more details.

Medicare Advantage plans are a private alternative to Original Medicare. They must cover everything covered by Parts A and B. People often choose Medicare Advantage plans when they want to minimize how much they spend on monthly premiums, or because they need some of the extra benefits these plans provide. We’ll discuss these extra benefits when we dive into Medicare Advantage below.

Medicare Supplement Insurance (also known as Medigap) is also offered by private insurance companies. However, Medigap works with Original Medicare by paying for some (or all) of your out of pocket costs. You’ll need to add a standalone Prescription Drug Plan if you go with Medigap. People who choose Medicare Supplement coverage usually want maximum freedom to see doctors nationwide, and want to pay little, if anything, for medical services. They’re willing and able to pay the higher premiums for Medigap coverage.

Which Medicare Option is Best For Me?

A Medicare Advantage plan is a contract between a private insurance company and CMS (the Centers for Medicare and Medicaid Services, the government agency responsible for running Medicare). When you enroll in Medicare Advantage, you are no longer in Original Medicare. This is sometimes a concern for people considering Medicare Advantage. However, your Medicare rights are protected even if you choose Medicare Advantage. All Medicare Advantage plans are required to cover everything covered by Parts A and B, and they usually provide more benefits, too.

Medicare Advantage plans may have network restrictions, especially if you use an HMO plan (Health Maintenance Organization).

On the other hand, many Medicare Advantage plans offer extra benefits beyond what Original Medicare covers. These extras can include:

Prescription drug coverage
Vision, hearing, and dental benefits
Fitness benefits (like gym memberships)
Over the counter allowances
Transportation

Do Medicare Advantage Plans Cover Everything?

By law, Medicare Advantage plans must cover everything covered by Parts A and B. In most cases, these plans provide more generous coverage.

One thing to remember is that you can’t have both Medicare Advantage and Medicare Supplement Insurance at the same time.

What Are Medicare Advantage Plan Costs?

For starters, you’ll have to keep paying your Part B premium, which is $148.50 for 2021. You’ll also potentially pay:

Monthly premium (although many Medicare Advantage plans have a $0 monthly premium)
Co-payments and co-insurance

All Medicare Advantage plans have Out of Pocket Maximum (OOPM) limits. This feature will prevent you from having catastrophically high costs due to a major illness or hospitalization. The OOPM feature is one of the biggest benefits of Medicare Advantage, and a primary reason why many choose to enroll in it.

Is Medicare Advantage a Good Fit for Me?

Medicare Advantage is a good option for people who want or need:

A low or $0 premium plan
Extra benefits like vision, hearing, and dental
Prescription drug coverage built-in to their plan

Since they were first introduced in 1996, Medicare Advantage plans have grown in popularity. In 2020, almost 40% of Medicare beneficiaries chose Medicare Advantage plans. These plans have become more popular as monthly premiums have declined. The average Medicare Advantage premium is only $21 per month, but 60% of people pay $0 in monthly premiums.

When can I Enroll in a Medicare Advantage Plan?

You can enroll in Medicare Advantage when you first become eligible for Medicare, during your Initial Coverage Election Period (ICEP). Your ICEP lasts seven months, and spans:

3 months before you turn 65
The month you turn 65
3 months after the month you turn 65

If you’re already in Medicare, you’ll have two options for getting Medicare Advantage:

During the Annual Election Period (AEP) each year from October 15th to December 7th
During Special Enrollment Periods (SEP) based on a change in your circumstances, like moving from one county or state to another

If you already have Medicare Advantage coverage, you have one more enrollment period, the Medicare Advantage Open Enrollment Period (MA-OEP), which is from January 1st to March 31st of every year. During MA-OEP, you can:

Change Medicare Advantage plans
Drop your Medicare Advantage plan and return to Original Medicare

Not sure if you’re eligible for Medicare Advantage? You can call one of our agents at 1-208-252-6904 to see if you’re eligible or take our quiz.

97% of MA customers believe their plan provides access to all health care services they could need.

Remember, with Original Medicare, you’re expected to pay part of the cost for your health care out of pocket. You’ll pay 20% of the cost for Part B services, plus Part A and B deductibles. And there’s no cap on how much you can spend in a year, so these costs can really add up.

Because of these costs, most people who don’t choose Medicare Advantage decide to add Medicare Supplement Insurance to their Original Medicare benefits.

Medigap, another name for Medicare Supplement Insurance, is a private health insurance policy that helps you pay for the costs you’d normally have to pay out of pocket. Medicare Supplement plans are standardized across 47 of the 50 States (Minnesota, Wisconsin, and Massachusetts have their own rule and plans). There are 10 standardized Medigap plans, known by letters: A, B, C, D, F, G, K, L, M, and N.

Each one of these standardized plans covers a different mix of the gaps in Original Medicare. Premiums are set by the individual insurance company, and are impacted by which standardized Medigap plan you choose. On average, Medigap premiums range from $80 to $350 per month.

With Medicare Supplement Insurance, there are no network restrictions. You won’t need a referral to see a specialist. You can see any doctor in the nation, as long as they accept Medicare patients.

However, keep in mind that you have to keep paying your Part B premium to use Medigap.

Is Medicare Supplement Right for Me?

Medicare Supplement plans are a good fit for those who:

Want maximum freedom to see doctors across the country
Want little to zero out of pocket costs for health care services and procedures
Are willing to pay higher premiums for more comprehensive coverage

When Should I Enroll in Medicare Supplement Insurance?

The best time to enroll in Medigap is during your Medigap Open Enrollment Period. This open enrollment period lasts for six months, and guarantees Medicare Supplement Coverage to every Medicare beneficiary who meets both of these criteria:

You are 65 or older, and
You are enrolled in Medicare Part B

If you want to add or change Medigap coverage outside of this window, you may still apply, but you could be subject to medical underwriting. In this case, you may not be approved, or you could be charged a higher premium based on your health.

Did you know that 95% of customers are confident they have the right Medicare Supplement plan for their needs?

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