Fall Open Enrollment is here and the deadline is fast approaching for changing your Medicare coverage. Even if you like your current coverage, it’s important to make sure that the plan you’ve selected still features the benefits you need. The simplest way to do that is to read your Annual Notice of Change.
However, if you are choosing a plan for the first time or you are handling someone else’s plan for the first time the options can be boggling. If you are trying to decide on a plan and which option is best for you, you must first understand what the two different plans are and the differences between the two.
Medicare Supplemental (Medigap) is a supplemental private insurance that can only be used by people enrolled in traditional Medicare to cover some or most of your out-of-pocket expenses in Medicare. Out-of-pocket expenses could include the 20 percent you’d pay for physician visits and outpatient service, the hospital deductible, cost of medical emergencies abroad and other costs which depend on the policy you choose. Medigap policies are standardized by law so that the benefits are the same regardless of which insurance sells it. However, insurance companies charge vastly differing rates so it’s important to do your research. If drug coverage is not important to you, any standard Medigap plan with Original Medicare Part A & B benefits will have more benefits than a standard Medicare Advantage plan. However, some Medicare Advantage plans offer benefits beyond what is found in Part A and B.
Medicare Advantage plans are health plans offered by private insurance companies and include HMOs and PPOs as an alternative to traditional Medicare. Each plan must cover all the same benefits that traditional Medicare covers but can offer extra benefits (such as hearing, vision and dental coverage) and can charge different copays. HMOs are a network of health care providers and facilities that require you to select a primary care physician to coordinate your care. PPOs are also networks of health care providers and facilities but typically you are not required to select a primary care physician and you may have more flexible options when it comes to out-of-network care (which may be important if you travel a lot). Most charge a monthly premium and most include prescription drug coverage at no additional charge. Medicare Advantage plans often have lower premiums than traditional Medicare and supplemental insurance plans and that can be a good choice if the beneficiary is healthy but can get expensive if you suddenly need hospitalization.
You cannot purchase both a Medigap policy and a Medicare Advantage policy.
To compare plans look at:
- Monthly premiums
- Doctor and healthcare facility restrictions
- Anticipated costs given your usual use of healthcare and hospitalization services
- Prescription drug coverage
If you find selecting a plan confusing you are not alone but there are several places to go to for help.
If you believe you want a prescription drug plan, use the Plan Finder tool on Medicare.gov. You can compare plans based on the drugs you take, the pharmacy you go to and the cost of your medications.
If you want a Medicare Advantage plan, call 800-MEDICARE to find out what plans are offered in your area or contact SHIBA (Statewide Health Insurance Benefits Advisors) at 800-562-6900 for more assistance.
If you discover you don’t like the Medicare Advantage plan you selected, you can disenroll and join Original Medicare with or without a prescription drug plan during the Medicare Advantage Disenrollment Period which runs from Jan. 1 to Feb. 14.