Choosing A Medicare Plan

The U.S. government has made great efforts to simplify the process of enrolling in its Medicare program. If you are planning to enroll in Medicare coverage soon, you may be curious about the best way to go about choosing your Medicare plan.

If you are a new enrollee, you will need to choose between Original Medicare and a Medicare Advantage plan. This is the difference between the two plans.

Original Medicare

Original Medicare consists of Part A and Part B of the Medicare program. Part A covers hospital care costs, while Part B covers medical services costs. Although Part A is usually free for people who qualify for Medicare coverage, you will have to pay premiums for Part B. The cost of the typical Medicare Part B premium was $148.50 in 2021, but the rate does increase depending on your income threshold. For example, individuals who file an individual tax return for $88,000 to $111,000 pay a premium of $207.90. Beneficiaries will have to pay deductibles and copays for both Part A and Part B. Enrollees should also note that Original Medicare does not include prescription drug coverage. If you wish to receive prescription drug benefits, you will have to enroll in Part D, the Medicare prescription drug plan.

Medicare Advantage

In 1997, the U.S. government decided to allow Medicare recipients to receive Medicare coverage from a private insurance company that has been approved by Medicare. This makes up Part C of the Medicare program and is referred to as Medicare Advantage. Medicare Advantage policies offer the same benefits as Original Medicare, and 90% of Advantage plans also include prescription drug coverage, which may come at a higher cost. Advantage plans also use a specific network of health care providers. If you choose to seek care outside of that network, your health care expenses may not be covered completely. Though, in some cases, it is possible to see a doctor out of network.

Which Plan Should I Choose?

If you are considering Medicare coverage, you should gather as much information about your potential options as possible. Under Original Medicare, you can get a wide variety of services, but Medicare Advantage can potentially offer those same services and some that are not covered under Original Medicare. Some Advantage plans even cover gym memberships, wheelchair ramp installation, transportation to and from healthcare facilities, and meal delivery. Apart from benefits, costs may also play a role in your decision.

Cost Comparison

If you are enrolled in Original Medicare, you will have to pay your Part B premiums and any deductibles and coinsurance amounts. Under Part B, you are responsible for 20% of the costs associated with doctor visits and lab tests. Under a Medicare Advantage plan, you are still responsible for the government required Part B premium, but most of these plans do not require you to pay the 20% coinsurance for Part B services. Instead, they have you pay specific copay amounts for physician visits, often resulting in lower out-of-pocket costs than Original Medicare.

You should talk to your current health care providers and ask them what they think. Ask them if their facility accepts Medicare patients, which will help you learn if you will be able to stay under their care.

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