Are you turning 65 soon or have otherwise recently become eligible for Medicare? If so, then you are most likely aware that there are many considerations that go into choosing the right Medicare plan for your needs. It can be very overwhelming and not all Medicare plans are one-size-fits-all. No matter what your situation, it all boils down to deciding between two main options. Option one is to keep Original Medicare (Parts A and B) and add a Medicare Supplement plan and/or a Part D prescription drug plan. Option two is a Medicare Advantage (Part C) plan. Read on for more information to help determine which option is right for you.
What is the difference between Medicare Supplement and Medicare Advantage?
One way to look at these two choices is the way you look at the difference between a monthly gym membership versus paying per individual exercise class. For individual classes, your total monthly bill depends on the number of classes you take. For example, you could pay $40 in April for taking four Zumba classes, and $60 in May for taking six Zumba classes.
At a membership gym, you would pay the same $50 fee every month, no matter how many (or how few) Zumba classes you sign up for. Medicare Advantage plans charge by the visit, much like that “pay per class” Zumba. With Medicare Supplement, the policy charges one set price per month, much like a monthly gym membership.
What are the pros and cons to Medicare Supplement?
More flexibility in choosing healthcare providers
Freedom to switch plans year-round
Easy to compare plans
Coverage travels with you throughout the United States
Higher monthly premium costs
Do not include prescription drug coverage
Typically do not include added benefits/programs
If enrolling outside of your initial 6-month window, you will be underwritten
What are the pros and cons to Medicare Advantage?
Lower monthly premium costs
Limit maximum amount you must pay out-of-pocket each year
Additional benefits and programs (i.e. dental, vision, gym memberships, etc.)
Many plans include prescription drug coverage (Part D)
Less freedom in choosing healthcare providers
Switching plans is limited to the annual enrollment period
Getting coverage for procedures can be more complicated (referrals, prior authorization, etc.)
Some limitations on compatibility with other forms of retiree coverage (i.e. Tricare)