How to choose the best Medicare plan for you

At first glance, Medicare looks like alphabet soup. There’s Original Medicare Parts A and B, Medicare Advantage Part C, Part D for prescription drugs and Medicare Supplement plans A–N. You have options. That’s a good thing!

Original Medicare

• Helps covers hospital and doctor visits
• No provider networks, so you can visit any doctor or hospital in the U.S. that accepts Medicare
• Opportunity to beef up your coverage with a stand-alone prescription drug plan or Medicare Supplement Insurance plan
• No premium payment required for Part A by most people who worked and paid taxes; Part B monthly premium is $174.70 in 2024

Medicare Advantage (MA) Part C

• Required by law to provide at least all the benefits of Original Medicare.
• Monthly premiums start at $0 but members must continue to pay the Part B premium.
• Most MA plans include coverage for prescription drugs and routine dental, vision and hearing care—benefits not provided by Original Medicare¹.
• Members are generally required to use in-network providers.
• MA plans set an annual limit on your out-of-pocket costs for Parts A and B services, after which you’ll pay nothing for covered services for the rest of your plan year.

There are some basic types of costs you’ll want to understand to help you estimate your overall plan costs.

Premium

This is the amount you pay each month to keep your plan active.

Deductible

This is the amount you must pay for before your plan begins to pay.

Coinsurance

This is your share of the cost for benefits after you pay any deductibles. Coinsurance is usually a percentage of the total cost for care (for example, 20%).

Copayment

This is a fixed amount you may have to pay as your share of the cost for care. A copayment is a fixed amount, like $30.

Maximum out of pocket

This is the most a Medicare Advantage member will have to pay out-of-pocket for covered services each year. The amount varies by plan, but once you reach that limit, you’ll pay nothing for covered Part A and Part B services for the rest of the year.

How often have you needed care over the past few years? Are you fairly healthy or do you have a chronic condition that requires ongoing care? Do you anticipate that your healthcare needs will increase or stay about the same in the near future?

Here are some helpful questions to ask when considering your options.

Your choice of doctors depends on the type of coverage you choose. With Original Medicare, you can visit any doctor who accepts Medicare—and the vast majority of doctors do.²

The rules are a little different with a Medicare Advantage plan. With a Medicare Advantage Health Maintenance Organization (HMO) plan, you’ll need to choose from the plan’s network of care providers and facilities. If you choose a Preferred Provider Organization (PPO) plan, you may use out-of-network providers, but you’ll likely pay more for your care.

Speaking of networks, Medicare Advantage provider networks have come a long way since they were introduced more than 30 years ago, and it’s easy to find out if your doctor is in a plan’s network before committing.

Most Medicare Advantage plans include coverage for prescription drugs, and it’s easy to check if the drugs you take now are covered. Original Medicare does not include prescription drug coverage. You can purchase a stand-alone Part D prescription drug plan, but you’ll have to pay a separate monthly premium.

In 2024, if costs for your Part D coverage for the year reach $5,030, you will then pay 25% of the cost for covered generic and brand-name drugs in that coverage gap until your out-of-pocket costs for the year reach $8,000. After that, you’ll pay $0 for the rest of the plan year.

There is some good news on the horizon for Rx coverage in 2025. The Part D “donut hole,” or coverage gap, will close in 2025. Once members reach their deductible, they will pay no more than 25% of the cost for Rx drugs covered by their plan until they reach a maximum out-of-pocket drug cost of $2,000. Members who hit that limit move into the catastrophic coverage stage where they pay $0 for covered drugs for the rest of their plan year.

If you have Original Medicare and you’re traveling within the United States (including its territories such as Guam, Puerto Rico and the U.S. Virgin Islands), your coverage travels with you. Healthcare services received while traveling outside U.S. borders, however, are not covered.

If you choose Medicare Advantage, most plans cover out-of-network care for a true emergency within the U.S. Some plans may offer a supplemental benefit that covers emergency and urgently needed services when traveling outside the U.S.

If you’re shopping for a Medicare Advantage plan, you may 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

If you feel Medicare Advantage is a better fit for your needs and you’re eligible to enroll, the next step is choosing a plan.

Here are some things you’ll want to consider when comparing Medicare Advantage plans. As you’ll discover once you begin shopping, the following information is easy to find on our Medicare Advantage enrollment pages:

• Which doctors and healthcare facilities are included in the plan’s network
• Medicare Advantage plan Star Ratings
• List of covered services
• Premium costs
• Copays and coinsurance
• Deductible amount
• Annual out-of-pocket maximum and coverage limits, if any

Relax! Choosing a Medicare plan is not a lifelong commitment. You can review your plan choices each year during the fall Annual Election Period (Oct. 15 through Dec. 7), so if your needs change, your plan can too.