Some of you may know that the federal government provides Medicare insurance. You can enroll in Medicare at age 65 or later, depending on your employment situation. Additionally, you could qualify before 65 if you are on Social Security Disability Income. Regardless of when you are eligible for Medicare, you’ll want to consider looking at Medicare plans because there is no cap to your costs with Medicare. Enrolling in a Medicare plan, whether it is a Medigap plan or Medicare Advantage plan, will help limit your out-of-pocket costs.
However, which option is best for you? Here is a brief overview to help give you a basic understanding of each kind of plan.
Medigap Plan Options
Medigap plans are also known as Medicare Supplement plans. These plans are secondary to Original Medicare. Once Medicare pays for a service, your Supplement plan will help cover the balance. However, your coverage will vary with each plan.
For example, you would have zero out-of-pocket costs with Plan F because Plan F covers all costs after Medicare Part A and Part B pay first. Plan G covers your Part A hospital deductible, inpatient costs, Part B coinsurance, excess charges, skilled nursing facility, etc. However, the only cost it does not cover is the Part B deductible. Another popular plan is Plan N. Plan N is very similar in coverage to Plan G, but it does not cover Part B excess charges, and you’ll have small copays for office visits and emergency room visits. If one of these plans sounds like a plan that may fit your needs, read more here boomerbenefits.com/medigap-plan-f-vs-plan-g-vs-plan-n/.
It is also important to note that the coverage is standardized. This means Plan G from one carrier will provide you with the same coverage as Plan G from another insurance carrier. The only difference between carriers is the premium.
Medicare Advantage Plan Options
Medicare Advantage plans are structured differently than Medigap plans. When you enroll in an Advantage plan, you choose to receive your Original Medicare benefits through that plan. Most Advantage plans are HMO or PPO plans and are sold by private insurance companies. This means you will have a network of providers that you must see to have coverage from the plan. Advantage plans will be your only coverage, and Original Medicare will sit on the backburner for the time being.
Your Advantage plan will manage your care. There will be copays or coinsurance for your hospital and medical services. They typically have lower premiums than Medigap plans, but they have more out-of-pocket. However, the great part is they provide a maximum out-of-pocket limit, which will cap your costs during the year.
Plan Networks
One key feature of Medigap plans is that they allow you the freedom of choice for doctors and facilities. You can see any provider that accepts Original Medicare when you have a Medigap plan. Therefore, your coverage will not change when you travel out of state. Your provider must accept your Medigap plan no matter which carrier you have.
However, Advantage plans are different. Since your plan will likely be an HMO or PPO, you must see providers that accept your plan. An HMO plan will have a smaller provider range than a PPO plan. Most PPO plans provide a travel benefit, so you can go out of network when you travel, but you will likely pay a higher copay for that service. You will always want to verify that a provider accepts your plan before enrolling in that plan.
Prescription Coverage
When you enroll in a Medigap plan, you’ll want to consider enrolling in a Part D plan. Medicare Part D is the prescription program with Medicare. Private insurance companies sell these plans, and your cost-sharing will vary with each plan. Since Original Medicare does not cover most prescriptions, you can enroll in a Part D plan for drug coverage. However, before you choose a plan, you’ll want to make sure it covers the current drugs you take.
If you enroll in a Medicare Advantage plan, you likely won’t need a Part D plan. Most Advantage plans have a built-in Part D benefit, including drug coverage. Therefore, you won’t have another premium for a drug plan. This can be a desirable feature with Advantage plans. However, you will want to make sure your plan covers your drugs.
Summary
Be sure to do some research before enrolling in a plan. There are many options available, and you don’t want to miss an opportunity to enroll in a plan that will best fit your needs.