|January 2016 Volume 9, Number 1|
Wise Choices — Medicare vs. Medicare Advantage
Seniors aged 65 and above automatically qualify and get signed up for Medicare hospitalization coverage, or Part A. Along with Part B, which covers doctor bills and other medical expenses, Parts A and B comprise Original Medicare. Is this your best option?
If you have paid 10 years of Social Security taxes, you qualify for standard Medicare options, namely:
Part A is free; you must pay for Part B coverage. Together, Parts A and B comprise Original Medicare, the government-provided health plan for seniors.
Do You Need Coverage for Vision, Dental and Nursing Care?
Original Medicare does not cover your out-of-pocket spending for dental, vision or assisted living facilities (long-term care). Certain Medicare Advantage plans do cover these expenses.
Do You Want to Avoid Coinsurance Charges?
Original Medicare has 20 percent coinsurance charges, meaning you must pay 20 percent of costs for any covered service. There is no cap on these charges. Medicare Advantage plans offer multiple cost structures for coinsurance and copayments. Some plans also charge you co-payments, which are fixed charges you’ll pay each time you use a covered service, such as $25 per office visit. Usually plans with copayments offer you the tradeoff of lower monthly premiums.
Do You Need Coverage for Prescription Drugs?
Original Medicare does not cover prescription drugs unless you buy the additional Part D coverage. Most Medicare Advantage plans (commonly referred to as Part C) offer drug coverage options. However, in some cases, your monthly premium may increase compared to the amount you’d pay for Part D.
Are You Looking for a Cost-Effective Alternative to Medigap?
Medicare supplement plans, also known as Medigap plans, can help you minimize out of pocket expenses with Original Medicare. Plans vary, but can cover deductibles and coinsurance for Original Medicare. However, when you add the cost of premiums for Medicare Part B (Part A is free for qualifying seniors), Part D prescription drug coverage and a Medicare supplement, some Medicare Advantage plans will be more cost effective.
How Much Flexibility Do You Need for Out-of-Network Visits?
With Original Medicare, you can use any medical provider who accepts Medicare payments and visit any specialist without prior authorization from a primary care doctor.
Do You Want to Limit Your Out-Of-Pocket Spending?
Original Medicare does not put an annual limit on your out-of-pocket spending. You simply continue paying a portion of the cost of services as you use them.
Are You Covered By Your Employer or an Employer-Sponsored Plan?
If you are over age 65 but have employer-sponsored health insurance through your own employer or your spouse’s, you do not need to enroll in Medicare Part B or Part D. (You can enroll later, without penalty, as long as you enroll within the special enrollment period that occurs after your employer-sponsored coverage ends.) You’ll still be automatically enrolled in Part A, which covers hospitalization expenses.
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