How to Compare Medicare Plans

It’s true what you hear about Medicare: it is confusing and can be hard to figure out. There just seem to be lots of “moving parts” pieced together to provide the coverage that works best for you. So, if you’re starting to look into Medicare, don’t worry. It’s easy to feel a little overwhelmed, but if you break it down into the plans and benefits it becomes easier to digest.

Here are some basic aspects to consider:

You are first eligible when you turn 65.
You must be sure you’re signed up for Medicare Part B when you become eligible at 65 or you can receive a penalty.
If qualified, you can get help paying for your Medicare costs if you need it.

Breaking Down Medicare Coverage

On the first day of your birthday month when you turn 65 years old you become eligible for three parts of Medicare. If you qualify for Medicare due to a disability, you are eligible for these parts of Medicare at an earlier date.

The main parts of Medicare are:

Part A – Covers hospital or skilled nursing facility expenses. No cost to Medicare member.

Part B – Outpatient care including doctor visits, lab work, surgery, diagnostic testing, equipment, durable medical equipment and more.

Part D – This is the drug/prescription coverage part. Pays for prescription drugs at a lower rate than the retail costs you would have to pay otherwise. You can opt to do without Part D, but most enrollees find it to be essential to their coverage.

Optional Medicare Coverage

Supplemental coverage, also known as Medigap coverage, is optional. A Medigap plan covers costs that are normally yours to pay.

All Medigap plans cover 20% of Medicare Part B outpatient costs.
Some Medigap plans also pay deductibles for your Part A and Part B.
If you have Medigap coverage, you can also purchase a Part D drug plan separately.
You can see any provider or physician who accept Medicare.
Often, Medigap plans do not have co-pays.

Medicare Advantage plans, or Part C, offer lower-cost alternatives to Medigap plans. Medicare Advantage pays coverage benefits instead of Medicare.

Provided by private insurance companies.
The plans offer a network of provider, typically with a choice of HMO or PPO plans.
You pay co-pays as you utilize services.
Many Medicare Advantage plans include coverage for prescription drugs, vision, hearing and dental.
Covers you when you travel.

Understanding Costs

Medicare Part A is free for almost all enrollees. You or your spouse must have worked in the United States for at least ten years.

Medicare Part B costs are based on your income from two years prior. Most new members for 2021 have a rate of $148.50 per month.

Medicare Part D premiums vary by state, with about 20 plans to choose from. As with Part B, costs are based on your income. The national premium average is about $35 per month.

For a more in-depth look at Medicare costs for 2021, see this article.

Getting Medicare Plans

It all starts with questions. Here are some things to ask yourself as you set about doing research so you can decide what’s best for you. You can use our free online quote service to compare medicare plans as well.

1. What works with your budget?

Look at the total out-of-pocket cost of care and have a range in mind for what’s affordable. Costs include:

Deductibles
Copayments
Coinsurance
Maximums
Drug costs

2. Do you prefer seeing an established network of providers or do you want a broader approach that let you select providers from those who accept Medicare?

Your answer might depend on physicians you see now and want to keep. For instance, you could choose a plan that includes a network of your current providers and services. If that’s not the case, you can always go for a non-network plan and choose physicians that are conveniently located.

3. Do you travel a lot?

Since Medicare Advantage covers you when you’re away from home, whether you’re in a different state or a different country. Keep this need when choosing coverage.

4. What is most important to you?

Would you have more peace of mind knowing you have the best coverage for what you need? Other considerations:

Lower premiums (which typically come with higher out-of-pocket expenses)
Lower out-of-pocket costs, with higher premiums
You are going to need surgery or a procedure
How often you usually need to see a physician or use services

Free Health Benefits Counseling

If you are eligible for Medicare, you are eligible to seek assistance from your state’s State Health Insurance Assistance Program (SHIP). They can answer your questions on all things Medicare.