Making Sense of Medicare Options

SUPPLEMENT PLANS

‘Medi-gap’ plans, are used only by people enrolled in original Medicare. Supplement plans are designed to cover some, or most of your out-of-pocket expenses that traditional Medicare does not pay. Supplements generally cover the twenty percent that Medicare A and B do not cover. The Supplement plan may also include coverage for the Part A hospital deductible ($1,484 in 2021) Part B co-insurance and co-payments, medical emergencies abroad, and certain other benefits based on the plan you choose.

Each Supplement plan is standardized by law. The benefits of each plan are identical depending on the letter of the plan you choose. Regardless of which insurance company you select for the Supplement, the coverage from each lettered plan is the same. Medi-gap plans are accepted nation-wide by any provider who accepts Medicare. If the doctor or hospital takes Medicare, the Supplement plan must be accepted as well. Medicare Supplement plans do not include prescription drug coverage. A stand-alone Medicare Part D drug plan is required to cover prescription medications. The three most popular plans in the Medicare Supplement market are Plan F, Plan G, and Plan N.

MEDICARE ADVANTAGE PLANS

‘Part C’ of Medicare, this option provides a replacement plan for Original Medicare. These plans must cover the same benefits that traditional Medicare options covers. However, the Part B premium of will no longer go to Medicare. It will go to the Medicare Advantage plan you select. In 2022, the standard Part B premium amount is $170.10 ($164.90 in 2023) (or higher depending on your income).

Medicare Advantage plans can vary in their charges, co-pays, and annual maximum out-of-pocket expenses. Some plans charge a monthly premium on top of Medicare, and many plans can include prescription drug coverage.

By law, all plans have annual limits on out-of-pocket costs. The maximum out-of-pocket charges can be as low as $1,000.00 per year or as high as $6,700.00 per year. It will fluctuate based on the company and plan you chose. A major difference from the traditional Medicare program is that most Part C plans are network confined plans. You are required to see doctors and hospitals in that plan’s specific regional network. Failure to stay in network could result in out of network charges.