Your health insurance choice will likely be one of the most important decisions you will make after retirement. Why is that? Well, when it comes to Medicare plans, changing them is not as simple as you might think. It can be quite the process due to enrollment windows and the possibility of answering health questions. Therefore, starting your research on Medicare plans before enrolling is extremely important.
When learning about Medicare, you’ll realize there are multiple plans and parts and, therefore, quite a variety of choices. However, don’t be overwhelmed. Just give yourself plenty of time to understand the difference between them. The plan that will be the best fit for you will depend on several factors, including your medical needs, financial situation, and lifestyle. It you want help comparing your options you can visit boomerbenefits.com/compare-medicare-plans-and-prices for more information on what’s available in your area!
However, let’s look into the different types of plans and their key features to help you determine which Medicare plan might be best for you.
Understanding Medigap plans
Medigap plans, also known as Medicare Supplement plans, are secondary plans to Original Medicare. You must be enrolled in Medicare Part A and Part B, which are the foundation of your benefits. However, since Medicare does not cover 100% of your hospital and medical costs, and you’re left with deductibles, copays, and coinsurance, you can enroll in a Medigap plan to help pick up those costs. These plans were designed to lower your out-of-pocket costs during the year by picking up the balance after Medicare.
Additionally, since Medicare is primary when you have a Medigap plan, you can see any provider in the U.S. that accepts Medicare. This means your coverage is the same from one state to another, which is ideal if you are a traveler.
Know the risk
One critical piece of information regarding Medigap plans is the possibility of medical underwriting. Every Medicare beneficiary is given a 6-month Medigap Open Enrollment based on their Part B effective date. If you try to apply for a Medigap plan once you are more than 6-months past your Part B effective date, you may need to answer health questions in most states. This means your application is not guaranteed to be approved. You’ll want to keep this in mind down the road!
What about prescription coverage?
Since Medigap plans only cover what Part A and Part B cover, you have no retail prescription drug coverage. However, that’s where Medicare Part D comes into play. Part D plans are drug plans sold by private insurance companies that solely help cover drugs you get at the pharmacy. Whenever you enroll in a Medigap plan, you’ll also want to choose a Part D drug plan if you don’t have creditable drug coverage.
Medicare Advantage plans
Your alternative option to a Medigap plan is a Medicare Advantage plan. When you choose an Advantage plan, you will receive your Medicare benefits from the plan rather than the federal government. You still must be enrolled in Part A and Part B to apply for an Advantage plan and continue to pay the Part B premium even though you use your Advantage plan as your main insurance.
These plans must offer the same benefits as Original Medicare, but you will have different cost-sharing as there will be copays and coinsurance for services. These plans help cover your hospital and medical benefits, and they can often include drug coverage, so you won’t need a Part D drug plan.
Another feature to remember is that these plans have provider networks; therefore, if you go outside your plan’s network, you may have to pay a higher copay or the entire bill.
Final thoughts
Once you grasp the difference between the two plan options and know which way you want to go, you can look at specific plans available in your area. One of the most popular Medigap plans is Plan G, but for Advantage plans, it truly depends on your zip code. This is why working with a Medicare broker representing both options can help benefit you through this journey.
