If you will soon be 65 and you don’t have health insurance through your employer or your spouse’s plan, you’ll need to start looking into Medicare – so you should know your options. And your first big choice will likely be whether to go with original Medicare or Medicare Advantage. Which is right for you?
For starters, there’s no one “correct” answer for everyone. Your choice will depend on a variety of factors, including your own health care needs, financial situation, preference for a particular provider, and so on.
In any case, you’ll need to know the basics of the two programs to even begin evaluating your options. Here’s a quick overview:
- Original Medicare – Original Medicare includes Part A (hospital insurance) and Part B (medical insurance for doctor’s visits and covered preventive services). You pay about $165 per month for Part B (or possibly more, depending on your income level). You can then choose to add Part D, which covers prescription drugs, for about $40 per month and Medigap, which may cost between $150 – $250 per month to cover gaps in Parts A and B. You may also want to pay for private coverage for dental and vision care.
- Medicare Advantage – Medicare Advantage, also known as Part C, is offered by private plans and essentially replaces Medicare Parts A, B and Medigap. Because you must stay enrolled in Medicare Part B with Medicare Advantage, you pay the same $165 per month as you would in Medicare (again, subject to additional charges for higher incomes). Some Medicare Advantage plans have no premiums, while others may charge up to about $60 per month. Most Medicare Advantage plans include prescription coverage and many also include dental and vision.
It’s not always possible to make an apples-to-apples comparison of Original Medicare and Medicare Advantage. Generally speaking, if you have Original Medicare with Part D and Medigap, you could expect less restrictive networks, making it easier to see the doctors of your choice, and less restrictive coverage – that is, you might be less likely to need pre-authorization for certain services as you might with Medicare Advantage.
Furthermore, unlike Medigap plans, Medicare Advantage plans are not standardized – there’s a great deal of variation in provider networks, drug coverage, premiums, deductibles, copays/coinsurance and out-of-pocket maximums. And some plans have reputations for denying claims. When you’re shopping around for Medicare Advantage plans, you may want to talk to your friends and relatives who have them. You might also ask your doctors about their office’s experience with different Advantage plans regarding coverage of treatments and prompt payment of claims. And you might want to visit www.medicare.gov/plan-compare for help in finding plans. (For other Medicare-related questions, you could contact your state’s State Health Insurance Assistance Program at www.shiphelp.org.)
One last point to keep in mind: Each year, during the open enrollment period, which, in 2023, runs from October 15 through December 7, you can switch from Original Medicare and Medigap to Medicare Advantage, or vice versa. However, if you switch to Medicare Advantage, you may face limits and restrictions on returning to your Medigap plan, should you ever desire to do so.
As you can see, choosing the right type of Medicare coverage will take some research and comparisons – so leave yourself enough time to make the selection that best fits your needs.
This article was written by Edward Jones for use by Michael Hayes, your local Edward Jones Financial Advisor.