Finding the right Medicare insurance plan can be an overwhelming experience for many people. There are a lot of decisions to make about what type of coverage is best for you. There is Original Medicare, Medicare Supplement (Medigap) plans and Medicare Advantage plans. There are different enrollment periods depending on individual circumstances and late penalties associated with missing those timelines. Here are some things you need to know to help you navigate this process:

Original Medicare and Medigap

Original Medicare consists of Part A (hospital) and Part B (medical). It provides good basic coverage, but it only pays 80% of approved costs for hospitals, doctors, and medical procedures. The other 20% of the bill is your responsibility. There is no cap on how much on the amount you may have to spend in one year.

Medigap plans are designed to fill these gaps in coverage and reimburse you for the expenses not covered by Parts A and B. Original Medicare does not cover prescription drugs costs. You can supplement this coverage with a stand-alone Medicare Part D prescription drug plan or a Medigap plan.

Medicare Advantage

Medicare Advantage or Part C plans include benefits beyond Medicare Parts A and B. These plans are offered by private insurers. Some plans may cover additional services such as vision, dental, hearing, and gym memberships. Most provide prescription drug coverage. You must be enrolled in Parts A and B to enroll in a Part C plan. Premiums and out of pockets costs such as deductibles vary, as do provider networks and drug formularies.

If you want to enroll in a Medicare Advantage plan or are already enrolled and want to change your plan, you need to do that during the Medicare Annual Enrollment Period each year.

What is the Medicare Annual Enrollment Period

The Medicare Annual Enrollment Period (AEP) is from October 15 to December 7 of each year. During this time period every Medicare beneficiary has the right to:

  • Start Medicare Advantage coverage
  • Change Medicare Advantage plans
  • Enroll in a Part D drug plan
  • Change Part D drug plans
  • Drop Medicare Advantage coverage and return to Original Medicare

If you drop Medicare Advantage coverage during AEP, you can enroll in a standalone Part D drug plan. You can also apply for a Medicare Supplement insurance plan.

How to Find the Right Plan for You

There are many factors to consider when searching for the right Medicare plan. Here are some of the most important ones:

  • Costs- know what your budget is and how the out-of-pocket costs add up. This includes the monthly premium, deductibles, copays, and coinsurance These can add up differently for different plans. You don’t want to end up with a plan you can’t afford.
  • Coverage- make sure the plan gives you the best coverage for your needs. You should consider costs for doctor and specialist visits, inpatient hospital stays, any type of treatment you receive on a regular basis, or any upcoming surgeries. Are you looking for additional benefits such as vision, dental, hearing and gym memberships.
  • Provider Networks- Medicare Advantage plans require you to use doctors and hospitals in their network, so you want to be sure all your doctors are considered in network. Both original Medicare and Medigap insurance plans cover you for any hospital or doctor in the U.S. that accepts Medicare, and most do.
  • Prescriptions- make sure all your prescriptions appear on the insurers drug formulary (list of covered drugs), check what tier the drug is on as this will determine any out-of-pocket costs such as copays or coinsurance, is there a preferred pharmacy network, are there any special restrictions on any of your prescriptions that you are not accustomed to such as prior authorizations, quantity limits, or step therapy. Make sure you understand the Medicare donut hole and if you are at risk for this gap in coverage.
  • Travel- do you plan to travel outside the insurance plan’s local coverage area for periods of time? If yes, you may want to look for out of network coverage. If you plan to travel abroad, you may want to consider a Medigap plan since Original Medicare and most Medicare Advantage plans offer little to no coverage once you are out of the country.
  • Quality of Care and Customer Service- the level of quality of care and customer service can vary greatly between plans. if you are looking at a Medicare Advantage plan, you should compare Medicare star ratings before selecting a plan. Medicare provides helpful tools for comparing plans.

What to Expect in Terms of Cost

Medicare costs may vary based on what type of coverage you choose. Premiums and deductible amounts can change annually.

  • Medicare Part A- If you worked for 40 quarters (10 years) you qualify for premium-free Part A. If worked 30-39 quarters, your 2022 Part A premium will be $274 per month. If you worked fewer than 30 quarters your premium will be $499 per month. There is an inpatient deductible and copays.
  • Medicare Part B- The standard monthly Part B premium is $170.10 in 2022. Some beneficiaries with higher incomes will be charged a higher premium. There is an annual deductible.
  • Medicare Part C- Medicare Advantage plans are sold by private insurers and premiums vary. The average premium in 2022 is $19 per month. Deductible, copays, coinsurance and out of pocket maximums can be different based on the type of plan you choose. Some plans now offer $0 premium but other out of pocket costs could be higher.
  • Medicare Part D- these prescription coverage plans are sold by private insurers and premiums vary. The average Part D premium in 2022 is $33 per month. Part D premiums can also be higher for higher income earners. There is usually a deductible, and your out-of-pocket costs will be based on your specific prescriptions.
  • Medicare Supplement plans- Medigap plans are sold by private insurers and premiums vary. There are multiple plans to choose from to fit your individual coverage needs. Costs may be determined by your age, gender, location, and the plan you select. If you do not enroll in a Medigap plan during your open enrollment period when you turn 65, you may have to undergo the underwriting process, where the insurer conducts a review of your medical history and decides if they want to accept your application and how much your premium will be.

How to Find Help

Medicare can be complex and choosing the wrong plan can be costly. One option to help you navigate all the choices and make the right decision, is to work with an independent Medicare agent who is licensed in your state. An independent agent represents many health insurance companies. They can present you with plan options from different insurers, increasing your chances of finding the right fit. Their services will not cost you anything.

To find an agent, ask family or friends if they can recommend someone they have worked with. You can also do an internet search for independent Medicare agents in your area, but you want to be sure you have taken the time to choose an agent who is licensed and experienced. Be cautious of the multitude of television ads selling Medicare plans at a 1-800 number. While these plans are legitimate, there has been an increase in complaints to Medicare from enrollees who are unhappy with the benefits they signed up for through these companies. Dealing with a local, knowledgeable agent will eliminate this risk.

Another option is to contact the State Health Insurance Assistance Program (SHIP) in your state. These programs provide Medicare beneficiaries with information, counseling, and enrollment assistance.

Silver&Smart keeps you up to date on information on Medicare, as well as current events, planning for retirement costs, traveling, or taking up new hobbies. Subscribe today.