November 20, 2017
How to Pick the Right Medicare Plan
READ TIME: 6 MIN.
The LGBT community in the U.S. currently has at least 1.5 million people who are 65 and older. By the year 2030, this population will double. If you're a Baby Boomer closing in on joining these ranks, or if you're already there, it's a good time to brush up on some Medicare facts.
From now until December 7, it's Medicare annual enrollment time. If you're thinking of switching plans, or are new to the program, here are some Medicare basics that can help you choose the right plan for you.
Know Your Medicare ABCDs
Here's a brief overview of Medicare Parts A, B, C, and D. Original Medicare is composed of two parts. Medicare Part A covers inpatient hospital visits and skilled nursing facilities. Medicare Part B covers outpatient hospital visits and doctor visits. Original Medicare is managed by the Centers for Medicare and Medicaid Services (CMS).
The other parts are managed by private insurance companies, and enrollment is optional. Medicare Part C is also known as Medicare Advantage. It's an all-in-one plan that provides the services covered by Medicare Parts A and B, and most plans include additional coverage such as prescription drugs, vision, dental, etc. Medicare Part D is for prescription drug coverage.
Private insurance companies also offer Medicare Supplement plans, sometimes known as Medigap plans, which are designed to "fill the gaps" in your Medicare Parts A and B coverage. It's like a mix-and-match smorgasbord of insurance benefits.
If you want more coverage than Original Medicare offers, you can enroll in a Medigap plan to cover what Original Medicare doesn't, or you can choose a Medicare Advantage plan instead of Original Medicare. Which choice is right for you? It depends on several factors.
Who Should Choose a Medigap Plan?
In general, Americans with higher incomes may prefer the variety of options available with Medicare Supplement plans, also known as Medigap plans. Premiums are higher (ranging anywhere from $72 to $423 a month on average) than Medicare Advantage, but in return, you get more choices. There are 11 plans available, though not all states offer every plan.*
Medicare Supplement plans have no network or service area limits and don't require referrals for specialists, so you have greater freedom to choose the providers you want. They also cannot be canceled for health reasons as long as you pay your premiums.
Most Medicare Supplement plans include:
Some plans include emergency coverage when you're traveling abroad and skilled nursing facility care co-insurance coverage, and/or other benefits that cover out-of-pocket expenses. As with Medicare Advantage, you will still pay Part B premiums.
Medicare Supplement plans generally don't cover long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing. They also don't cover prescription medication, so you'll also need to enroll in Medicare Part D.
When Is a Medicare Advantage Plan Best?
Medicare Advantage plans (Medicare Part C) are popular: Enrollees make up 31 percent of Medicare recipients. Enrollment has tripled since this type of plan first became available in 2004. Why are so many people signing on? It's a convenient, economical way to get insurance.
Most Medicare Advantage plans include hospital, medical, prescription drug coverage, and some supplemental insurance benefits, such as vision and dental coverage.
If cost is an important factor, this is the plan for you. The average monthly premium for Medicare Advantage plans is $37. There are even plans available for zero-premium coverage. There's also a maximum out-of-pocket limit, which varies according to your plan. (The average is $5,223.) These costs are in addition to Medicare Part B premiums.
If you prefer to know your costs beforehand, a Medicare Advantage plan might be the right choice. Most Medicare Advantage plans have fixed copayments, so there are fewer surprises than if your pricing is determined by the percentage of the total bill.
If you're a homebody, a Medicare Advantage plan is a good choice. As long as you stay in your network's service area, you're always covered. If you travel, you may not be covered at all or you may have to pay higher out-of-network costs unless it's an emergency.
If you live in an urban or large suburban area, Medicare Advantage plans work well because you're more likely to have lots of providers who accept Medicare plans.
And while we're talking about Medicare Advantage, know that discrimination of LGBT people with Medicare Advantage plans isn't allowed. For example, Medicare Advantage plans must allow married LGBT couples who are eligible for skilled nursing facility benefits to reside in the same facility, just as it does for straight couples.
Assess Your Needs and Priorities
To know which plan is right for you, do your homework. Know your current and expected healthcare needs, and consider your priorities. Also, consulting with a licensed insurance agent can be a big help when you're comparing Medigap versus Medicare Advantage plans.
* Insurance companies are not required to sell all plan types. In Massachusetts, Minnesota, and Wisconsin, known as waiver states, plans are standardized differently.
Medicare has neither reviewed nor endorsed this information. This information is not a complete description of benefits, limitations, copayments, and restrictions may apply. Benefits, premiums, copayments/coinsurance may change on January 1 of each year. You must continue to pay your Medicare Part B premium.
