Most people feel like there’s 100 different options.  It can feel overwhelming trying to decide what’s the right fit for you.

The good news is there’s really just 2 main options:

Original Medicare with a supplement or Medicare Advantage

Once you know you the pros and cons for both, you can decide which one fits your priorities.

MEDICARE ADVANTAGE PLANS

Medicare advantage plans are not a supplement

You get your Medicare benefits from an insurance company instead of Original Medicare.

You still pay for your Medicare Part A & Part B coverage.  But you basically put your Medicare card in the drawer because you won’t use it.

Network

Medicare Advantage plans use a network.  Each plan contracts with certain doctors and hospitals.  You normally need to stay in that network unless it’s an emergency.

Some networks are very small, maybe only a few counties.  Others are much larger that can even be a National network.

Some plans do have out of network coverage but you may pay more when using your benefits out of network.

Cost

Medicare advantage plan premiums are normally much lower compared with Medicare supplements.  Part of this is because Medicare is paying the insurance company to provide you your Medicare benefits. So the insurance company doesn’t have to charge you as much.

Some plans have $0 premiums.

But you do have extra costs when you use it which is more like traditional health insurance.  This is often a copay for a regular doctor visit and a higher copay for a specialist.  You may pay a percentage of the bill for certain things.

There is a limit to your worst case scenario.  The maximum out of pocket varies by plan but could be as high as $8,300 per person in 2023.

That limit is for in network benefits only.  Some plans have no limit if you go out of network.

All in One Plan

You may have seen the Medicare commercials talking about an all in one Medicare plan.  They are referring to Medicare Advantage.

Original Medicare doesn’t include prescription medication, dental, or vision coverage. There’s also no gym memberships included in Original Medicare.

Medicare Advantage plans are considered all in one because they normally include extra benefits that aren’t included in Original Medicare.

Remember, you still pay your Medicare Part B premium even if you choose a Medicare Advantage plan.

Prior Authorizations

A recent study showed 99% of Medicare Advantage plans require you to get a prior authorization from the insurance company before certain procedures and treatments are covered.

Not all treatments require a prior authorization, but it’s important to understand this before you choose your plan.

Medicare Supplement aka Medigap

Works with Original Medicare

Medicare supplements help fill in the gaps of Original Medicare.  So you get your Medicare benefits from Medicare and use another policy to help fill in the gaps so your coverage is much more comprehensive.

No Network

Medicare supplement plans do not use a network so you’re not restricted where you can go for treatment.  You can see any doctor or hospital nationwide, as long as they accept Medicare.

Cost

Medicare supplement premiums vary based on how comprehensive you want to make it.  The most popular option is called Plan G which is also the most comprehensive option now.

Premiums for plan G are normally between $100 – $140/month.

That makes your hospital/medical coverage much more comprehensive.  You only have one deductible per calendar year.  You pay the Medicare Part B deductible before your coverage kicks in.  This amount is $226 in 2023.

After that, no more deductibles, copays, or percentage of the bill for anything covered by Medicare in the United States.

A la carte

Medicare supplements use an a la carte style.  They help make your hospital/medical coverage more comprehensive.  But there’s other plans many people get too.

Medicare Part D is prescription drug coverage.  The average national premium for a prescription drug plan is around $30/month.

Dental and vision coverage can also be added but they are separate premiums too.  Usually premiums for this coverage is an extra $40 – $50 per month.

Limited time for Guaranteed Approval

When you first start Medicare, you are guaranteed to be approved for any plan you want.  But that only lasts for a certain amount of time which is normally around 6 months.

After that time period is over, you need to pass a health review if you want to change to a Medicare supplement.

This is important to understand. If you start with an advantage plan now and decide in the future you want to change to a Medicare supplement, you will need to pass a health review. So the insurance company gets to ask you questions, and then decide based on your health history if they:

• want to accept you
• want to accept you and charge you more
• don’t want to offer you coverage at all

Starting with a Medicare supplement and switching to an Advantage plan is much easier.  There are no health questions for advantage plans so that change can be made every year regardless of your health.

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