Which Medicare Plan Is Best for You?

Many people struggle with where to start with the Medicare enrollment process and how to choose the right plan. If this sounds like you, you’re in the right place.

Once you sign up for Medicare Part A and Part B, you have two main plan options to consider. One option is to enroll in a Medigap plan and a Part D plan. Your other option is to enroll in an Advantage plan.

By understanding your plan options ahead of time, you can sign up for Medicare with more confidence. So, which Medicare plan is best for you?

Medicare Supplement

A Supplement plan, also known as a Medigap plan, helps cover your portion of Medicare costs, including deductibles, copayments, and coinsurance.

Part B only covers 80% of your Medicare-approved services, meaning you are responsible for 20%. However, a Medigap plan can help cover some or all of this 20%, depending on the specific plan you have.

Currently, there are ten Medigap plans. Plan N is one of the more popular Medigap plans among beneficiaries. You can learn more about Plan N by visiting boomerbenefits.com/medicare-supplemental-insurance/medicare-supplement-plans/medicare-plan-n.  

Each plan offers a different level of coverage, but they are standardized. For example, a Plan A with Blue Cross Blue Shield provides the same coverage as a Plan A with United Healthcare.

The only difference would be the plan’s monthly premium. Medigap plans tend to have higher premiums with lower out-of-pocket costs. The actual premium for a plan depends on various factors, including your zip code, gender, age, tobacco use, and more. Additionally, Medigap plans can be used anywhere in the U.S. if the healthcare provider accepts Medicare insurance.

Part D Plans

Medigap plans do not include prescription drug coverage, so you want to sign up for a Part D plan to pair with it. Private insurance companies offer these plans and set their monthly premiums and cost-sharing rates.

Additionally, each Part D plan has a drug formulary (list of covered medications). So, when signing up for a Part D plan, you’ll want to check to make sure your medications are covered and that you’re comfortable with the plan’s rates.

Advantage Plans

Medicare Advantage plans are an alternative way to receive your Part A and Part B benefits through a private insurance carrier instead of Medicare. However, you still need to stay enrolled in Part A and Part B to have an Advantage plan.

You often pay a $0 or low premium with these plans and pay for services out-of-pocket as you go. This can be a good option if you are relatively healthy and do not see the doctor very often. However, if you run into any significant health issues, the costs for services can add up quickly. A Maximum Out-of-Pocket Limit (MOOP) protects you from spending too much, but that limit can be as high as $7,550 in 2022.

These plans often include built-in drug prescription coverage and additional benefits that you can’t get with a Medigap plan, including dental, vision, and hearing benefits. However, these benefits can change from year to year, so you won’t want to pick an Advantage plan just for the additional benefits.

Another factor to consider is that Advantage plans operate within network areas, meaning you may be limited to the healthcare providers and specialists you can see. If you see a provider outside your plan’s network, you may pay more.

Which option is right for you?

Ultimately, the decision you make needs to be based on your budget, lifestyle, health status, and personal preferences.

Medigap plans are a good choice for those who’d rather pay a higher premium in exchange for lower out-of-pocket costs and peace of mind knowing they have more comprehensive coverage if needed. These plans also are a good option if you’d like to pick your providers and don’t want to be limited to a network, especially if you plan to travel a lot.

Advantage plans can be a good option for you if you prefer to have lower premiums and pay for services as you go, which can be more cost-effective. They can also be convenient because of their built-in drug prescription coverage and unique benefits.

Final Thoughts

To help you choose, ask yourself questions like, “Will I be traveling a lot?” “Do I prefer to choose my own doctors?” “Would I rather have a lower premium and pay for services as I go?” Questions like these will help you decide which route is better for you.