Choosing a Medicare Plan: A Simple Guide for You

Understanding your Medicare plan options

Medicare is a federal health insurance program created to support people age 65 and older as well as younger individuals living with a disability or specific health condition. While some people are automatically signed up for Medicare, others must sign up for a plan on their own. 

Picking a Medicare plan can feel overwhelming. So, it’s a good idea to first understand your coverage options, which are: 

1. Original Medicare (Parts A and B): Part A helps cover your hospital care and services, care in a skilled nursing facility and some home health care. Part B, which is optional, covers your medical care, like visits to your doctor. If you receive Social Security benefits, you may be automatically enrolled If you've received Social Security benefits at least 4 months before you turn 65, the SSA will enroll you in Part A. Part B is optional. You'll get your Original Medicare card in the mail before you turn 65. in Original Medicare. Read more about What Is Original Medicare?

   
   The other types of Medicare coverage are offered by private insurers, like HealthSpring: 

2. Medicare Advantage (Part C) combines Parts A and B (and often Part D), so you get hospital, medical and prescription drug coverage all in one plan. Many Medicare Advantage plans also include dental, vision and hearing benefits at no additional cost. You can learn more at What is Medicare Part C?

3. Prescription Drug Coverage (Part D) helps cover your prescription drug costs. You can purchase a standalone Part D plan if you have Original Medicare. Or choose a Medicare Advantage plan that includes prescription drug coverage. Learn more about What is Medicare Part D?

4. Medicare Supplement Insurance (Medigap) helps pay some of the costs Original Medicare does not cover, like copays The set dollar amount you pay at the time you receive medical services or prescription drugs. and deductibles. The amount you pay out of pocket before Medicare begins paying its share. You can purchase a Medicare Supplement Insurance plan if you have Original Medicare or Part D. You cannot purchase Medicare Supplement Insurance if you have Medicare Advantage. Find out more at What is Medicare Supplement Insurance (Medigap)?

What to think about when choosing a Medicare plan

Before you start to shop for a Medicare plan, it’s a good idea to think about your needs. What matters most to you in a Medicare plan? Here are some important questions to ask yourself:

Your budget: What is your monthly budget? Your budget for the year? Do you prefer a set monthly premiumThe monthly amount you pay to keep your coverage active. with low or no out-of-pocket costs? Or to pay out of pocket when you need care with a low or no monthly premium?

When shopping for a plan, it is important to review the plan’s monthly premium as well as all estimated out-of-pocket costs, like copays or coinsurance. The percentage of covered costs you pay after the deductible has been met. You should also understand the cost you are responsible for before Medicare starts to pay its share – this amount is called the deductible. Calculating these costs can help you estimate how much your plan may cost each month and for the entire plan year. 

Keep in mind that enrolling in Medicare after you become eligible will result in a late enrollment penalty. This penalty will be added to your premium each month for life. It is important to know the Medicare enrollment periods and understand when you can enroll in a Medicare plan.

Learn more about Medicare costs at Medicare Costs, Coinsurance and Penalties.

Your health needs: Do you have any chronic health problems that need regular medical care? Do you need help managing your condition? How often are you hospitalized? Do you need specialist care? Do you have any upcoming medical procedures or surgeries? 

Thinking about your current and future health needs can help you determine which health services you may need. This will give you an idea of your likely out-of-pocket costs for these services.  

But you should also think about your vision, dental and hearing health needs. Coverage for these types of health care are treated differently depending on the type of Medicare plan. For example, some Medicare Advantage (Part C) plans include vision coverage for things like routine eye exams. Original Medicare only covers medically necessary vision care. 

Your prescription drug needs: How many prescription drugs do you take regularly?  

Drug tiers set the cost of your prescription drugs – a drug in a lower tier usually means a lower out of pocket cost. Before deciding on a Medicare plan, you should check the plan’s formulary, or drug list, to make sure your prescriptions are covered. Medicare Part D and Part C plans may offer ways to lower your costs, such as switching from a name-brand drug to the generic or using a preferred in-network pharmacy.

Do you have transportation to pick up your prescriptions? If not, you may also want to consider a plan that offers home delivery options. 

Your preferred doctors and hospitals: Do you have certain doctors or hospitals you want to continue to go to?  It is a good idea to check the plan’s provider finder tool to make sure your preferred doctors and hospital are in network. But depending on the Medicare plan, your access to providers can vary.

Your preference for flexibility: Are you OK with visiting any doctor or hospital that accepts Medicare?  

Original Medicare and Medicare Supplement Insurance plans provide nationwide access to any doctor that accepts Medicare. Medicare Advantage plans have a set network of doctors and hospitals, typically with a lower out-of-pocket cost per visit. And staying in the Medicare Advantage plan’s network will cost less compared to visiting a provider or hospital out of the plan’s network. 

When comparing Medicare Advantage plans, you may need to choose between an HMO (health maintenance organization) or PPO (preferred provider organization) plan. An HMO plan typically has lower costs but requires you to visit in-network providers. And you must get a referral before you can visit a specialist. 

PPO plans typically cost more but offer more flexibility to visit doctors in or outside of the plan’s network. Specialist referrals may not be required. 

Do you travel within the U.S. often or spend time in another state? Original Medicare and Medicare Supplement Insurance plans provide medical coverage anywhere in the U.S. Some Medigap plans also provide coverage for medical emergencies outside the country. 

Medicare Advantage plans do not cover standard medical services outside of the plan’s network area. But if you travel and need emergency care, that may be covered.