Evaluating all your available Medicare options may seem a little confusing at first. We’re here to help you get started.
Whether you choose Original Medicare or a Medicare Advantage plan, you’ll have to pay premiums, deductibles and copays. These are called out-of-pocket costs.
Original Medicare Part A – Hospital
About 99% of Medicare beneficiaries don’t have to pay a Part A premium since they’ve worked and paid Medicare taxes for at least 40 quarters while working. If you’re one of the few who need to buy Part A, you could pay a premium between $278–$505 in 2024 depending on how long you or your spouse worked and paid Medicare taxes.1
Original Medicare Part B – Medical
In addition to a monthly Part B premium there is a yearly deductible. The 2024 Part B premium is $174.70 (or higher depending on your income) and the deductible is $240.2 Once you meet the deductible, you’ll typically pay 20% of Medicare-approved services.
Part C – Medicare Advantage
Medicare Advantage plans are offered by private insurers. Monthly plan premiums vary, but many plans offer affordable or $0 monthly plan premiums. Keep in mind that you’ll still need to pay your monthly Original Medicare Part B premium.
Part D – Prescription drugs
Original Medicare doesn’t cover prescription drugs, but you can buy a stand-alone prescription drug plan to pair with Original Medicare. These Part D plans are offered by private insurance companies approved by Medicare. The monthly plan premium, deductible and copayments will vary based on the plan you choose.
Many Medicare Advantage plans include coverage for prescription drugs. Be sure to explore all your options so you can choose with confidence.
Medicare Supplement Insurance (Medigap)
If you choose to enroll in Original Medicare, you can opt to purchase a Medicare Supplement Insurance plan. These plans are not the same as Medicare Advantage and can only be combined with Original Medicare. These plans are designed to help with out of pocket costs like deductibles and copays. The benefits from plan to plan are the same from every insurance company, although some may offer additional perks. The difference is in the company, the quality of service, and the price.
Original Medicare (Part A & Part B)
Administered by the federal government, Original Medicare includes Parts A and B—hospital insurance and medical insurance. Generally, prescription drugs, dental, vision and hearing care are not covered.
Medicare Advantage plans—Part C—are offered by Medicare-approved private insurance companies. They include all the coverage provided by Original Medicare Parts A and B (except hospice care).
Most Medicare Advantage plans include prescription drug coverage and may also include additional benefits like routine dental, vision and hearing care. Another popular feature of many of these plans is health and wellness programs, including free gym memberships.
There is a monthly plan premium for a Medicare Advantage plan, although many plans have an affordable or sometimes even $0 premium. If you choose Medicare Advantage, you’ll still pay the monthly Part B premium of $174.70 or higher depending on your income.
You also need to be sure to use healthcare providers and facilities that are part of your plan’s network to avoid additional out-of-pocket costs.
Part D – Prescription drug plans (PDP)
Stand-alone prescription drug plans are offered by private insurers, so premiums, deductibles and copays will vary by plan. Each plan also has a specific list of drugs it covers—called a formulary—so be sure to confirm that the medications you need are covered. In addition, with most PDP plans, you’ll generally save money if you use pharmacies in the plans network.
A few other things to think about
Do you have existing coverage through an employer?
If you’re still working and covered by your employer’s plan, take some time to learn how it does (or doesn’t) work with Medicare. Your current plan administrator can answer any questions you may have.
Medicare Advantage Star Ratings
If you’re shopping for a Medicare Advantage plan, you’ll likely see Star Ratings for each plan. The Star Rating, issued by the Centers for Medicare & Medicaid Services, provides an overall rating of the plan’s quality and performance. It considers factors like:
- Member complaints, including how often members had problems with the plan
- Customer service
- Whether members got various screening tests, vaccines and other preventive care
- Any help members received for managing chronic conditions
- Drug safety and the accuracy of drug pricing, for Part D
Does your bucket list include travel?
If you travel frequently, or if you live for part of the year in another place, it’s important to know if your coverage will travel with you.
With Original Medicare, you can visit any doctor or facility in the U.S. that accepts Medicare. If you are traveling to another state, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands or American Samoa, your Medicare coverage follows you.
Going on a cruise? You may be covered for medically necessary care if the ship is within 6 hours of its U.S. port.3
Generally, Medicare Advantage plans require you to stay in network, which may offer a lower-cost share than going out of network. However, if you have a life-threatening injury or condition, always go to the emergency room or call 911. Medicare Advantage covers true emergencies at in-network and out-of-network providers, and no referrals or prior authorizations are needed.
Medigap insurance plans C, D, F, G, M and N, provide foreign travel emergency coverage. If you receive emergency care while in a foreign country, the plan will pay 80% of the billed Medicare-eligible expenses incurred for hospital, physician and medical services to the extent Medicare does not cover such expenses. The benefit is limited to a maximum payable of $50,000 during your lifetime, and you must pay a $250 calendar year deductible. Benefits are payable only for emergency care that Medicare would have covered if such care had been provided in the U.S.
It’s definitely a lot to think about, but taking all these factors into account can help you choose the coverage that best suits your needs and budget.
Best of all, as your needs change, so can your plan during the Medicare Advantage and Prescription Drug Plan Annual Enrollment Period, which goes from October 15 to December 7 of each year.