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Medicare Choices – What Are My Medicare Choices?

Original Medicare vs. Medicare Advantage Plans

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Updated June 15, 2010

Medicare Choices – What Are My Medicare Choices?

Your Medicare Choices. Spend some time reviewing your Medicare coverage options.

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If you are turning 65 in the next three to four months, you need to start thinking about your Medicare choices. There are two main choices for how you get your Medicare benefits – Original Medicare or a Medicare Advantage Plan. About 25% of Medicare recipients are enrolled in a Medicare Advantage plan.

Medicare has outlined a step-by-step process to help you make a decision, and either choice has advantages and disadvantages. Your first step is to decide if you want to enroll in Original Medicare or in a Medicare Advantage Plan.

If You Choose Original Medicare

Under original Medicare you will receive Medicare Part A (hospital insurance) and Medicare Part B (medical insurance):

  • Medicare provides this coverage by paying for approved services.
  • You have your choice of doctors, hospitals, and other healthcare providers. You do not need a referral to see a specialist.
  • You are responsible for paying out-of-pocket expenses such as deductibles and coinsurance.
  • You usually are responsible for paying a monthly premium for Part B, which most likely will be deducted from your social security check.

You will need to decide if you want Medicare Part D prescription drug coverage:

  • This is a voluntary program and if you want this coverage, you will need to choose and join a Medicare Prescription Drug Plan.
  • These plans are run by private insurance companies approved by Medicare. Many large and well-known health insurance companies offer Part D plans and they are readily available throughout the U.S.
  • Part D plans differ considerably and it is important that you understand what benefits – most important being whether or not your medications are on the drug plan’s formulary – are available and the costs, such as monthly premiums, deductibles, and medication copayments.

You will need to decide if you want a Medigap policy (Medicare Supplement Insurance):

  • You can purchase an insurance policy from a private company to cover the “gaps” that are not paid for by Medicare, such as copayments, coinsurance, and deductibles.
  • The Medigap policies must meet certain standards set by Medicare, but the costs may vary by the policy and the insurance company.
  • If you are in a union or worked for some large employers, you may receive similar supplemental coverage as a work-related benefit.

If You Choose a Medicare Advantage Plan

Medicare Advantage Plans – also known as Medicare Part C – includes both Medicare Part A and Medicare Part B:

  • Advantage plans are offered by private insurance companies approved by Medicare to provide coverage.
  • Instead of directly paying your doctor or hospital, Medicare pays your Advantage Plan a fixed amount of money each month to provide your care.
  • Most Medicare Advantage Plans are either HMOs or PPOs and you will need to use the plan’s network doctors and hospitals or pay more or all of the costs.
  • In addition to your Medicare Part B premium (usually deducted from your social security check), you will most likely pay an additional monthly premium and a copayment or coinsurance for some covered services. The costs vary by plan and many plans offer benefits not covered by Medicare, such as eyeglasses.

You will need to decide if you want Medicare Part D prescription drug coverage:

  • Many Medicare Advantage Plans have “built-in” Part D prescription drug coverage. If you want drug coverage, and it is offered by your Advantage Plan, you most likely must get it through your plan.
  • If your Advantage Plan does not offer Part D, you can choose and join a Medicare Prescription Drug Plan using the same process as for Original Medicare.
A Medigap/Advantage Plan fact from Dr. Mike: As long as you are enrolled in a Medicare Advantage Plan, you do not need to buy a Medigap policy. In fact, it is illegal for anyone to sell you a Medigap policy if you are in an advantage plan. The benefits offered by a Medigap policy are covered by your advantage plan and the Medigap supplement does not pay for your advantage plan's deductibles, copayments, or coinsurance.

Pros and Cons: Original Medicare vs. Medicare Advantage Plans

Original Medicare Pros:

  • Freedom to choose your provider – you can see any doctor who accepts Medicare and use any Medicare-approved hospital
  • Ability to choose from among Prescription Drug Plans in your state

Original Medicare Cons:

  • Significant cost sharing including an annual deductable and coinsurance – you will need to purchase a Medigap policy to cover supplement your Medicare coverage.
  • Choosing among numerous Part D drug plans can be frustrating and time-consuming
  • The total annual costs for Original Medicare (including a Part D Plan and a Medigap policy) may exceed those of a Medicare Advantage Plan
  • If you have drug coverage and supplemental insurance, you may have to interact with three different organizations – Medicare, Part D provider, and Medigap insurer
  • No coverage (including emergencies) when you travel outside of the U.S.

Medicare Advantage Plans Pros:

  • May be less expensive and you will only have to deal with one insurance company
  • May cover services you would not get from Original Medicare, such as wellness programs, eye glasses, and services related to hearing problems
  • May provides emergency medical care outside of the U.S.

Medicare Advantage Plans Cons:

  • In most plans, you are restricted to using plan doctors and other providers or you pay more or all of the costs
  • Plans vary in consumer satisfaction and response to complaints and appeals
  • Plans have the option to no longer participate with Medicare and may leave your area
  • Your doctor may choose not to participate in the plan’s network or decide to drop out
  • Under health reform, Medicare is decreasing monthly payments to Medicare Advantage Plans and you may see premium increase and fewer extra benefits

About Your Medicare Choices

This article focuses on the more common Medicare choices. You may have other options that affect one or more of your Medicare choices. These may include employer and union benefits, COBRA, military benefits, and Veteran’s benefits. You also may be able to enroll in a Medicare Advantage Fee-For-Service Plan that provides greater provider freedom of choice.

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