Which Medicare Plan is Right for Me?

When you begin your Medicare journey, you’ll want to choose a Medicare plan to pair with your Original Medicare benefits. Medicare plans can help lower your out-of-pocket costs and give you financial security. Without a Medicare plan, you could be responsible for 20% of the cost of all medical services with no limit. However, you’ll likely have several Medicare questions as you begin this journey, such as how do you know which Medicare plan is right for you? It’s best to understand the different plans and go from there.

What is a Medigap Plan?

You are eligible for a Medigap plan when enrolled in Medicare Part A, and Part B. Medigap plans are also called Medicare Supplement plans. You can think of this plan as a secondary plan that will pay after Medicare pays. This also means that if Medicare does not pay for a service, your Medigap plan won’t either.

You purchase a Medigap plan from a private insurance company, and ten standardized plans are available. When a plan is standardized, every insurance company that offers that specific plan must provide you with the same benefits. For example, a Plan G with one carrier will offer the same benefits as Plan G with another carrier.

What is an Advantage Plan?

A Medicare Advantage plan, also known as Part C, is another option. You must be enrolled in Medicare Parts A and B to enroll in an Advantage plan. However, when you enroll in an Advantage plan, you will receive your Part A and Part B benefits through that plan. All Medicare Advantage plans must offer the same benefits as Part A and Part B, but the cost-sharing will differ. You will have copays or coinsurance for every service.

Although every Advantage plan must offer the same benefits as Original Medicare, they have different costs in place for services and can provide additional benefits. Additional benefits include transportation, dental, vision, hearing, gym memberships, and more.

Choosing Your Doctors

Do you like the ability to see any provider in the U.S. who accepts Medicare? If so, you may lean toward a Medigap plan. Since Medigap plans are secondary to Original Medicare, you can see any provider or facility that accepts Original Medicare. The ability to see a majority of U.S. doctors makes traveling easy because your coverage will be the same no matter where you are.

However, if you prefer to stay close to home and don’t foresee the need to go out of your area for doctors, then you may lean toward an Advantage plan. Advantage plans are network plans, meaning they are either HMO or PPO plans. HMO plans will have a smaller network of providers than a PPO. If you’d like the most cost-effective copays, you’ll want to see doctors who accept your Advantage plan.

Do You Travel?

You’ll want to consider how often you travel as you decide which plan will be best for you. If you are a snowbird, have family in another state that you frequently visit, or want to take your RV across the U.S., you’ll likely consider a Medigap plan. As stated above, you’ll be able to take your Medigap plan with you as you travel. You won’t have to worry about providers not accepting your plan because as long as they accept Medicare, they must accept your Medigap plan.

Since Advantage plans have networks, traveling can be challenging. When you have an HMO plan, you will not have coverage outside your network unless it’s an emergency. However, a PPO plan can offer out-of-network coverage, which can be beneficial if you often find yourself out of network. Some Advantage plans can have a travel benefit that allows you to be out of network for an extended amount of time, and as long as the doctor participates in your plan, you’ll have coverage.

The tricky part is that all Advantage plans are different, so you’ll want to research the available plans in your area.

Do You Like Lower Premiums or Little Out-of-Pocket Costs?

As you determine which route to go, the monthly and out-of-pocket costs will be important. Something to know about Medigap plans is they generally have higher premiums. However, in return for a higher premium, they will cover more of your out-of-pocket costs, leaving you paying less for your services. Your potential out-of-pocket costs are predictable with a Medigap plan.

However, many people may prefer paying a lower monthly premium. If you are one of them, you may lean towards the Advantage plans. Advantage plans have lower premiums because you have more out-of-pocket costs as you use the plan. For example, you’ll have copays for services and only pay them when you have a service. These plans offer maximum out-of-pocket limits, but it could be as high as $7,550 in the year.

Either you pay more monthly for the plan and have less costs during the year, or you pay less monthly and potentially have more costs during the year.

Final Point

The above points can help you determine which plan is best for you. It can take time to go through your options, so you don’t want to wait until the last minute to do your research.