With so many options available, the best Medicare plans for older adults will often vary depending on need. There are advantages and drawbacks to each type of plan and various factors to consider.
A key benefit of Original Medicare — which includes Part A and Part B — is that a person can choose any doctor, healthcare professional, or facility that accepts Medicare plans.
In contrast, some Medicare Advantage plans may have a more limited choice of healthcare professional or facility but have a lower cost.
This article examines what each part of Medicare covers, the advantages and drawbacks of each plan, and some factors that older adults may wish to consider.
Glossary of Medicare terms
We may use a few terms in this article that can be helpful to understand when selecting the best insurance plan:
- Out-of-pocket costs: An out-of-pocket cost is the amount a person must pay for medical care when Medicare does not pay the total cost or offer coverage. These costs can include deductibles, coinsurance, copayments, and premiums.
- Deductible: This is an annual amount a person must spend out of pocket within a certain period before an insurer starts to fund their treatments.
- Coinsurance: This is the percentage of treatment costs that a person must self-fund. For Medicare Part B, this is 20%.
- Copayment: This is a fixed dollar amount a person with insurance pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Three factors determine Original Medicare coverage:
- state and federal laws
- Medicare’s national coverage decisions
- coverage decisions made by companies in each state that process Medicare claims
Medicare Part A covers hospitalization costs. This includes inpatient care in the hospital, skilled nursing facility, hospice, and home healthcare. It does not include custodial or long-term care.
What does Medicare Part B cover?
Medicare Part B covers medically necessary and some preventive services. Medically necessary services are those necessary for a doctor to diagnose and treat an eligible medical condition. People will pay a monthly premium for Part B services.
Preventive services involve procedures to prevent illness, such as the flu shot or tests that diagnose a condition at an early stage, when treatment is most effective.
Most preventive services are free of charge if they come from a doctor or hospital that accepts Medicare, known as an in-network or participating provider.
Medicare Part B also covers:
- ambulance services
- limited outpatient prescription medications
- inpatient and outpatient mental health services
Part B also covers medical equipment, also called durable medical equipment (DME), such as:
- canes
- crutches
- blood sugar monitors
- hospital beds
- walkers
- patient lifts
- wheelchairs
Typically, people who need DME pay 20% of the Medicare-approved cost. A deductible may also apply. The plan pays for DME if a person’s doctor and equipment supplier are in Medicare’s network.
What does Original Medicare not cover?
Original Medicare does not cover does not cover ineligible medical conditions or treatments and procedures that are not medically necessary.
Part A does not typically cover medications, medical devices, or equipment that someone needs to take home.
Part B does not cover items such as:
- dentures and most dental care
- eye exams relating to getting a prescription for glasses
- hearing aids
- acupuncture
- routine foot care
Healthy aging resources
To discover more evidence-based information and resources for healthy aging, visit our dedicated hub.
Read more about Original Medicare.
Medicare Advantage, or Medicare Part C, is an alternative to Original Medicare.
Private health insurance companies offer many Medicare-contracted health plans that provide all Part A and Part B benefits but with some extra options.
Medicare Advantage may have lower out-of-pocket costs than Original Medicare. However, a person with one of these plans usually needs to choose from doctors within the network, which can limit their options.
Also, Advantage plans often provide additional benefits, such as:
- vision
- dental
- hearing
Many Medicare Advantage plans will also include prescription drug cover, which is sometimes called Medicare Part D.
Read about Original Medicare vs. Medicare Advantage.
Whether a person has Original Medicare or Medicare Advantage, they can choose to add Medicare Part D, which covers outpatient or take-home prescription medications.
These prescription drug plans can vary in the specific drugs they cover and in how they divide the drugs into tiers. Insurers often have numbered tiers, with commonly prescribed, lower cost medications in the lower tiers and less common, more costly drugs in higher tiers.
Each tier will typically have its own copayment amount, with higher tiers having higher out-of-pocket costs.
A person’s overall costs will depend on several factors, including which medications they take and whether or not they use a drugstore within the plan’s network.
Learn more about Medicare Part D coverage.
Medigap is Medicare supplemental insurance, also available through private insurers. It aims to provide coverage for gaps in Original Medicare plans. More specifically, Medigap could help with copayments, deductibles, and coinsurance.
Medigap differs from Medicare Advantage in a key way. Medicare Advantage plans are an alternative to Original Medicare, while Medigap is a supplement to Original Medicare.
To enroll in Medigap, a person must have enrollment in Original Medicare.
It is important to note that a person cannot have a Medigap plan if they choose Medicare Advantage.
Each type of Medicare coverage has advantages and drawbacks. The sections below will look at these in more detail.
Original Medicare pros
- can choose any doctor who accepts Medicare coverage
- will not typically require a referral
- once you meet your deductible, Part B covered services are often subject to a 20% coinsurance
Original Medicare cons
- may cost more than Medicare Advantage
- does not include take-home prescription drug coverage
- must pay an additional premium for Part D prescription drug cover
Medicare Advantage pros
- all-in-one coverage
- most plans offer prescription drugs
- annual cap for out-of-pocket expenses
- extra benefits, such as dental care
Medicare Advantage cons
- monthly premium, although some plans have a $0 premium
- out-of-pocket costs are variable
- must choose from a specific network of participating hospitals, doctors, and healthcare professionals
- if people choose to visit an out-of-network doctor or facility, they may have to pay the full cost themselves
- cannot purchase a Medigap plan if a person chooses Medicare Advantage
Older adults have several Medicare plans to choose from. The main choice involves deciding whether to enroll in Original Medicare or Medicare Advantage. Here are the main points to consider:
- People with Original Medicare may choose to add prescription drug coverage with Medicare Part D. They can also decide to include the supplemental insurance, Medigap.
- A person with Medicare Advantage cannot have a Medigap plan.
- Original Medicare with Medigap likely offers the most comprehensive coverage, but it may also be the most costly. A person can consider their income and how much they are able to spend before choosing a Medicare plan.
- Original Medicare with Medigap also offers a lot of flexibility when choosing a doctor or specialist. Older adults who travel frequently may find the travel benefit of particular interest.
- People with lower incomes or who may be unable to spend more on additional premiums, such as Medigap premiums, may find a Medicare Advantage plan more appealing.
There is no one-size-fits-all decision when it comes to choosing the best Medicare plan, as people have different circumstances, needs, and priorities.
Although other considerations play a role, the decision may come down to weighing the flexibility benefits of Original Medicare against the financial benefits of Medicare Advantage plans.
After carefully evaluating the advantages and drawbacks, a person can enroll in the plan that is best for them.
Medicare resources
For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.