With so many Medicare options available, older adults may wonder which one is right for them.
Medicare is available when a person turns 65 and in some other specific circumstances. However, older adults have different health concerns and conditions, so finding the right plan is an individual choice.
A key benefit of traditional Medicare — which includes Part A and Part B — is that a person can choose any doctor who accepts Medicare. In contrast, a primary benefit of Medicare Advantage is the lower cost.
This article takes a look at what each part of Medicare covers. It also examines the pros and cons of each plan, as well as some factors that older adults may wish to consider before making a choice.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medicare Part A covers hospitalization. This includes inpatient care in a hospital, along with skilled nursing facility care, hospice care, and home healthcare. It does not include custodial or long-term care.
Coveragedepends on the following threefactors:
- state and federal laws
- Medicare’s national coverage decisions
- coverage decisions made by companies in each state that process Medicare claims
Medicare Part B covers necessary medical and preventive services. Medical services refers to supplies and services necessary for a doctor to diagnose and treat a medical condition.
Preventive services involve procedures to prevent illness, such as the flu shot. This area also includes 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 provider who accepts Medicare assignments.
Medicare Part B also covers:
- ambulance services
- limited outpatient prescription medications
- inpatient and outpatient mental health services
In addition, Part B covers medical equipment, such as:
- canes
- crutches
- blood sugar monitors
- hospital beds
- walkers
- patient lifts
- wheelchairs
People who need equipment pay 20% of the Medicare-approved cost. A deductible also applies. The plan only pays for such items if a person’s doctor and equipment supplier are enrolled in Medicare.
Part B does not cover all medical care. Items and services not covered include:
- dentures and most dental care
- eye exams relating to getting a prescription for glasses
- hearing aids
- acupuncture
- routine foot care
Coverage ofall Part B services depends on the same three factors that affect Part A.
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Medicare Advantage, or Medicare Part C, is an alternative to traditional Medicare.
Private companies offer an array of health plans that contract with Medicare to provide all of a person’s Part A and Part B benefits. Most Medicare Advantage plans also cover prescription drugs.
Medicare Advantage may have lower out-of-pocket costs than traditional Medicare. A person with one of these plans usually needs to choose from doctors within the network, however, which can limit their options.
Also, Advantage plans often provide additional benefits, such as:
- vision
- dental
- hearing
Medicare Part D covers prescription drugs. Instead of just one plan, a range of plans offer Part D.
These plans vary in the specific drugs they cover. They also differ in how they put drugs into “tiers,” which are categories based on the amount of copayments required.
A person’s costs will depend on several factors, including which medications they take and whether or not they use a drugstore within the plan’s network.
Medigap is Medicare supplemental insurance that private companies offer. It provides coverage of healthcare that traditional Medicare does not include.
In other words, as its name implies, it fills the coverage gap. Medigap helps with copayments, deductibles, and coinsurance.
Medigap differs from Medicare Advantage in a key way. Medicare Advantage plans are an alternative to traditional Medicare, while Medigap is a supplement to traditional Medicare.
To enroll in Medigap, a person must be enrolled in traditional Medicare.
There are pros and cons to each type of Medicare coverage. The sections below will look at these in more detail.
Traditional Medicare
A key benefit of traditional Medicare is that a person may choose any doctor who accepts Medicare.
Also, in most cases, a person does not need a referral to visit a specialist.
The primary disadvantage associated with traditional Medicare is that it may cost more than Medicare Advantage.
Medicare Advantage
According to the United States Government Accountability Office, Medicare Advantage has several benefits. These include all-in-one coverage, since most plans offer prescription drugs.
The plans have an annual cap for out-of-pocket expenses, so after a person reaches this limit, they will pay the full allowed amount.
Medicare Advantage plans often include extra benefits, such as dental care, that traditional Medicare does not provide.
Although people will pay a monthly premium for Medicare Advantage, the premium for some plans is $0. Some plans may also help pay part or all of the Part B premium.
The main disadvantage of Medicare Advantage plans is that a person’s choice of providers is more restricted than with traditional Medicare.
A person must choose doctors and hospitals that are within the plan’s network. If they pick out-of-network providers, they face higher costs.
An older adult has several Medicare plans to choose from. The main choice involves deciding whether to enroll in traditional Medicare or Medicare Advantage.
People with traditional Medicare may choose to add prescription drug coverage with Part D. They can also decide if they would like to add the supplemental insurance program, Medigap.
Traditional Medicare with Medigap likely offers the most coverage, but it may be the most expensive. A person can consider their income and how much they are able to spend before choosing a Medicare plan.
Traditional Medicare with Medigap also offers a lot of flexibility when choosing a doctor or specialist. Older adults who travel frequently may find this benefit desirable.
It may be difficult for people with lower incomes and those who are unable to spend more on health insurance to pay Medigap premiums. For this reason, they 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 incomes, needs, and priorities.
Although other considerations are involved, the decision may come down to weighing the flexibility benefits of traditional Medicare against the financial benefits of Medicare Advantage plans.
After carefully evaluating the pros and cons, a person can enroll in the plan that is best for them.