Medicare is confusing!
There are so many different options for coverage, and in the months before you turn 65, you get a mountain of mail from every insurance company out there claiming their Medicare plans are the best.
You can ignore all of that.
Here’s how to find what’s best for your Medicare coverage.
This is helpful if you’re turning 65 soon or if you chose a Medicare plan years ago and it’s time to review your choice to make sure you’re still in the right plan and not paying more than you need to.
Confused about your Medicare coverage options? Watch our free video: How to Find the Best Medicare Coverage Without Paying More Than You Need To…
Medicare Supplement OR Medicare Advantage
Most people have two major options: Original Medicare Parts A and B plus a Medicare Supplement, which is also known as a Medigap plan, and a Medicare Part D plan OR a Medicare Advantage plan that includes Medicare Part D drug coverage.
Choosing one of these is the first step in finding the best Medicare coverage for you.
Let’s take a look at which of these options will work better for you.
Medicare Part B
First, no matter what Medicare coverage you choose, you will have to pay your Medicare Part B premium. In 2023, most people pay $164.90 per month for Medicare Part B.
This is income dependent. High income individuals pay more than the standard premium, and folks with low income may pay less.
Include that cost in any estimate of healthcare expenses.
No Medicare Plans are FREE
It’s important to mention that no Medicare plans are free.
You will pay for healthcare in different ways depending on your plan choice, but no Medicare option free.
Paying for Healthcare: Medicare Supplement vs Medicare Advantage
Here’s the big difference in how you pay for healthcare with a Medicare Supplement plus standalone Part D plan versus a Medicare Advantage plan.
If you choose a Medicare Supplement and Part D plan, you will have additional monthly premiums you will pay to remain enrolled in each of those plans.
For a more comprehensive Medicare Supplement, those premiums can be well over $100 per month. The prices vary quite a bit depending on where you live and your age.
The trade-off for paying those higher premiums is when you go to the doctor or the hospital, you will have very low or no out-of-pocket costs for the medical treatment you receive.
For example, if you purchase a Medicare Supplement Plan G, your out-of-pocket costs for Medicare covered medical treatment is capped at $226 in 2023.
Medicare Advantage plans are the opposite. Many Medicare Advantage plans have $0 monthly premiums.
They’re able to charge you nothing to be in the plan because Medicare pays a contracted amount every month to the Medicare Advantage plan to manage the health care of each person who enrolled in that plan.
With a Medicare Advantage plan, if you need to see a doctor, go to a hospital, or receive any kind of medical treatment, that’s when you have to pay.
There are set copays and coinsurance percentages that you pay during the year for healthcare you receive.
Every Medicare Advantage plan has an out-of-pocket spending limit for the year to protect enrollees’ finances. If you pay that much, then the insurance company will pay all of your covered medical costs for the rest of the year.
When it comes to drug coverage, you will pay a copay or coinsurance with either coverage option when you pick up medications.
That’s the big difference in how you pay for healthcare with these two options.
Let’s look at coverage differences.
Will I Have Original Medicare Coverage?
Original Medicare is Medicare Parts A and B.
Medicare Part A is inpatient insurance. Medicare Part B is outpatient insurance. Whether you choose a Medicare Supplement or a Medicare Advantage plan, you have full Original Medicare Parts A and B coverage.
By law.
If you have a Medicare Supplement, Original Medicare is your primary insurance and the Medicare Supplement pays costs that would otherwise be your responsibility, like deductibles, copays, and coinsurance.
Medicare Advantage plans are required to cover at least as much as Original Medicare and that standard is checked and approved for each plan every year before it’s allowed to be offered to the public.
Virtually all Medicare Advantage plans offer coverage beyond what’s covered by Original Medicare. If you choose a Medicare Advantage plan, that plan is your primary health insurance, rather than Original Medicare.
Are There Medical Provider Networks?
With a standard Medicare Supplement, there are no provider networks. You can see any doctor and go to any hospital that accepts Medicare.
Medicare Advantage plans do have provider networks. Some Medicare Advantage plans will only cover your care if you see an in network provider. Other plans will cover medical care from out of network providers, usually at a higher cost to you.
It is very important that you make sure all of your doctors are in a plan’s network before enrolling so you don’t get surprise bills later.
Is Coverage the Same from One Plan to Another?
Medicare Supplement coverage is standardized by law.
However, monthly premium costs and underwriting are very different from one company to another. It’s important to comparison shop.
Medicare Advantage plan coverage is not standardized, so you do need to look at each plan individually to make sure it’s a good fit for you before enrolling.
How Claims are Processed: Medicare Supplement vs Medicare Advantage
There’s also a big difference in how claims are processed between these two options.
With a Medicare Supplement, your provider submits a claim for medical services to Medicare itself. Medicare determines if the claim is covered, and if it is, Medicare will pay its part and send it on to the Medicare Supplement company, which will pay its part.
Medicare Supplement insurance companies can’t argue with claim decisions made by Medicare.
This saves you time and hassle because it means you’ll never have to argue with your Medicare Supplement company about a claim.
All those decisions are made by Medicare.
Medicare Advantage claims are determined by the Medicare Advantage company.
All of these plans have to include coverage that is as good as or better than Original Medicare, but the costs to you are not identical to Original Medicare.
It’s important to look at each plan’s copays and coinsurance costs for medical services, and know what the process for disputing a claim decision is before enrolling in any Medicare Advantage plan.
Medicare Supplement or Medicare Advantage for You?
There is no one size fits all Medicare coverage.
If you prefer predictable monthly costs with few extra charges through the year when you receive medical care, take a look at Medicare Supplements.
If you’d rather have low or even $0 monthly plan costs and pay for medical services as you use them, look at the Medicare Advantage plans in your zip code.
Once you’ve narrowed your choice to one type of coverage or the other, there are still plenty of options open to you for either Medicare Supplements or Medicare Advantage plans.
How to Shop for Medicare Plans
This is when you get down to comparing specific plans from specific companies.
For that, you will need tools like medicare.gov, insurance company websites, your state department of insurance website, Medicare publications, and insurance company documents.
You can do all the research and comparison shopping between all available plans and companies on your own, but it’s time consuming, complicated, and can get frustrating.
Plus, there’s absolutely no benefit to doing it on your own.
Medicare plan costs are the same whether you put in all that time and work on your own and enroll directly with an insurance company or you enroll through a Medicare plan broker who does all the research and comparison shopping for you.
Have Questions? We Can Help!
This is what we do for all of our clients. We work with many insurance companies and can impartially comparison shop with you to find the plan and the company that’s the best fit for your situation.
We do this completely free of charge for our clients.
We’re able to do that because for every enrollment into a Medicare plan through our office, we are paid a commission by an insurance company.
The commissions are very similar across plans and insurance companies, so we have no reason to push one company over another for our own gain. We are free to find the plan and the company that fits each client’s medical and financial situation best.
Once you are a client of ours, you have ongoing free access to expert help whenever you have a question about your coverage or when premiums go up or the Medicare Annual Enrollment Period rolls around again, and it’s time to re-evaluate and possibly change plans.
If you have Medicare questions, please feel free to give our office a call at 877-312-1414 or schedule a free, no obligation Medicare Plan Consultation.
We’re here to help you understand your options and find the best Medicare plan for you.
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