The Medicare system is incredibly complicated. We really wish there was some super simple advice for choosing the best Medicare Plan, but sadly there’s just no such thing. Important details of plans can be quite different based on where you live and the wrong plan can wind up being very costly.
Get Good Advice
While Medicare Part A and Part B plans are bought directly from the US government, other coverage plans like a prescription drug plans, Medigap coverage, and Medicare Advantage are handled by private companies who are licensed by Medicare. These companies have an incentive to sell their particular plan to you. So while their plan may actually be a great deal, you should always shop around and compare. It’s always worth asking what other people in your area are doing and how they like the companies they are working with. The Medicare Website has a tool for finding plans and shows their Medicare star ratings.
Also, because the system is so complicated, the government has set up State Health Insurance Assistance Programs which offer free Medicare counseling services in every state. You will be connected with a counselor who should be able to answer just about any Medicare question you have and help guide you to the best plan; all for free! You can find the phone number and website of your state's program here.
What’s Right for Your Loved One?
To pick the right plan, think about these things:
- Benefits: Medicare Advantage plans must provide the same benefits as Traditional Medicare or better. These additional benefits may be wellness programs, hearing and vision services or even nursing home stays. Many Medicare Advantage plans include prescription drug coverage as well.
- Out of Pocket Costs: Traditional Medicare plans pay 80% of costs. Cheaper plans may cover a lower percentage, while more expensive plans may cover up to 100% of costs.
- Access to Doctors: Many Medicare Advantage plans limit the doctors that you can see. This may limit who can be your loved one’s primary care provider, or require referrals to see specialists like a cardiologist or neurologist.
- Monthly Premiums: A Medicare Advantage plan’s monthly premium cost may be higher or lower than the Traditional Medicare plan. Costs will be higher or lower depending on how the plans handle the items above.
Jennifer in Illinois
Jennifer is beautician living and working in Elgin Illinois. Her mom, Martha, is 73 and lives 20 minutes away in the home Jennifer grew up in. Martha is sharp as a tack, but stopped driving last year after a hip replacement surgery. She was also just diagnosed with type-2 diabetes. Martha is going to switch to a Medicare Advantage plan which she pays more for, but it does a good job of keeping her diabetes-related costs down. Jennifer and Martha made the decision based on:
- More Benefits: Jennifer wanted to make sure the new plan had vision coverage due to the vision problems that diabetes can cause.
- Lower Out of Pocket Costs: Because of Martha’s diabetes, she will need to see doctors more frequently and spend more money on medical costs. If Martha goes on dialysis, the costs would get even larger without this new plan.
- Less Access to Doctors: To keep the new plan’s price down, Jennifer and Martha had to choose an HMO plan but luckily, Martha’s primary care doctor was part of that plan.
- Higher Monthly Premiums: To keep the out of pocket costs down, Martha is paying 10% more a month for her new Medicare Advantage plan.
George in Oregon
George is a small business owner and single father living in Portland, Oregon. His mom, Lucy is lives about 50 miles away. She is turning 65 and wants some help with choosing the right insurance plan. She’s in great health and doesn’t have any major health problems aside from some minor arthritis. Many of her friends are on a Regence Medicare Advantage Plan that they like. After looking at the options, George decided that his mom should sign up for traditional Medicare because:
- Fewer Benefits: The Medicare Advantage plan offered some additional benefits for nursing home care, but George and Lucy were confident that it wasn’t needed for now.
- Higher Out of Pocket Costs: Based on Lucy’s medical spending for the past year, she wouldn’t have gone over the medicare deductible amount, so she didn’t really care about higher out of pocket costs.
- More Access to Doctors: Lucy wanted to be able to see any doctor she wanted, so she kept the Traditional Medicare Plan.
- Lower Monthly Premiums: The traditional medicare premiums cost $200 less a year that the Medicare Advantage Plan.