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You may have heard about Medicare coverage options through Medicare itself, through ads, or through your friends and relatives. Medicare Advantage… Original Medicare… Medicare Supplement… What can they do for you? What costs can you expect?

Here are some tips on how you can compare the different types of Medicare coverage options.

Medicare coverage options: Original Medicare

A lot of people receive Original Medicare (Part A and Part B) automatically, without having to sign up. That’s generally the case if you are getting Social Security retirement benefits when you become eligible for Medicare coverage.

Many people stay with Part A (hospital insurance) and Part B (medical insurance). Over 37 million people are enrolled in Original Medicare, according to the Center for Medicare & Medicaid Services (CMS).

You can generally add on to Original Medicare coverage in a couple of different ways.

  • Most of those who are enrolled in Original Medicare (about 67%) are also have stand-alone Medicare Part D Prescription Drug Plans.
  • Some of those enrolled in Original Medicare also have Medicare Supplement insurance plans.

Possible pros and cons of this type of Medicare coverage

  • If you have a doctor or specialist you really want to keep, you can generally keep seeing that provider if he or she accepts Medicare assignment.
  • If you’re healthy and don’t take medications, you might save money by simply staying with Original Medicare for your Medicare coverage.
  • You can generally sign up for prescription drug coverage under Medicare Part D if you want this coverage (described below).
  • You might pay deductibles, coinsurance, and/or copayments under Part A and Part B.
  • There’s no out-of-pocket limit on your Medicare expenses. That means if you have a serious illness or accident, your medical bills might get very high.

Medicare coverage options: Medicare Supplement insurance

If you’re looking for supplemental insurance that may pay for part, or all, of certain Medicare out-of-pocket expenses, you might want to know about Medicare Supplement insurance. It’s meant to work alongside your Original Medicare coverage (Part A and Part B).

There are different standardized Medicare Supplement insurance plans, but each one generally covers at least half of your Part B coinsurance.* Each standardized plan may also cover hospital costs up to 365 days after Medicare coverage has ended. Some plans may cover Part A and/or Part B deductibles, and more. The plans are standardized in 47 states; Massachusetts, Minnesota, and Wisconsin have their own standardized plans.

Possible pros and cons of this type of coverage

  • If you have frequent doctor visits or hospitalizations, that generally means you’re paying many coinsurance or copayments as well. If you buy a Medicare Supplement insurance plan that may cover these expenses, it could be worth the premium you pay for the plan.
  • Once you have a Medicare Supplement insurance plan, it’s guaranteed renewable in most cases.
  • If you have a doctor or specialist you really want to keep, you can generally keep seeing that provider if he or she accepts Medicare assignment. One type of Medicare Supplement insurance, called Medicare SELECT, might require you to use network providers.
  • Some plans have yearly out-of-pocket maximum amounts to protect you from unlimited spending on your medical care.
  • The best time to buy a Medicare Supplement plan may be during your six-month Medicare Supplement Open Enrollment Period (OEP). That’s when you can’t be rejected or charged more due to health issues.
  • You can apply for a Medicare Supplement insurance plan anytime as long as you’re enrolled in Medicare Part A and Part B. But if you apply outside the OEP, you could be charged more or rejected for health problems.

*Medicare Supplement Plan N pays the entire coinsurance amount, except for $20 for certain office visits and $50 for emergency room care that doesn’t result in admission to the hospital.

Medicare coverage options: prescription drug coverage

If you take medications, you may want to consider a Medicare Prescription Drug Plan to help cover the costs. Original Medicare, Part A and Part B, don’t cover most medications you take at home.

Medicare Part D is Medicare’s prescription drug coverage program. There are two types of Medicare Prescription Drug Plans, and both are obtainable from private, Medicare-approved insurance companies.

  • You can sign up for a stand-alone Medicare Part D Prescription Drug Plan if you have Medicare coverage under Part A and/or Part B, and live in the plan’s service area.
  • Or, you can get this coverage through a Medicare Advantage Prescription Drug plan (described below). You need to have Medicare coverage under both Part A and Part B, and live in the plan’s service area.

Possible pros and cons of this type of Medicare coverage

  • Not every Medicare Prescription Drug Plan covers the same set of medications. Each plan creates and maintains its own list of covered prescription drugs, called a formulary. When you shop for a plan, check its formulary to make sure it covers your medications.
  • Also, a plan can change its formulary. Plans must send an Annual Notice of Change every autumn, which notifies you of any coverage changes – including the formulary.
  • In fact, a plan’s formulary can change at any time of year. The plan will send you notice when necessary.
  • Prescription drug coverage is optional. But if you don’t sign up for it when you’re first eligible for Medicare, you might pay a late enrollment penalty if you sign up at a later date.
  • Enrollment is usually restricted to the Medicare enrollment periods.

Medicare coverage options: Medicare Advantage plans

If you’re like over 21 million Medicare beneficiaries (according to CMS), you might prefer to get your Medicare Part A and Part B benefits through the Medicare Advantage program or other Medicare health plan.

Available from private insurance companies that contract with Medicare, Medicare Advantage plans often include benefits beyond Part A and Part B.

Possible pros and cons of this type of Medicare coverage

  • Most Medicare Advantage plans include prescription drug coverage.
  • Some plans include additional benefits, such as routine vision care.
  • Many Medicare Advantage plans require you to use a provider network. If you have a doctor or specialist that you prefer, you might pay more for visits if he or she isn’t in the network. In some cases, the plan wouldn’t cover those visits at all.
  • Every Medicare Advantage plan has an annual out-of-pocket limit on your Medicare expenses. That means (for example) if you have a serious illness or accident, and you spend a certain amount on out-of-pocket medical costs, the plan may pay all costs for covered services for the rest of the year.
  • Some plans have premiums as low as $0. Of course, deductibles and other costs may vary among plans.
  • Enrollment is usually restricted to certain time periods. For example: you can generally sign up during your Medicare Initial Enrollment Period, when you’re first eligible for Medicare. Another opportunity is the Annual Election Period (October 15-December 7).

This information is not a complete description of benefits. Contact the plan for more information. Limitations, copayments, and restrictions may apply. Benefits, premiums and/or copayments/co-insurance may change on January 1 of each year.

You must keep paying your Medicare Part B premium, along with any premium the plan may charge.

The formulary, pharmacy network, and/or provider network may change at any time. You will receive notice when necessary.

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