The annual Medicare open enrollment period will begin within days, and seniors everywhere will soon have to make important choices about their healthcare coverage for next year. Original Medicare forms the foundation of most retirees' health insurance plans. But if you've ever had it, you probably know there are a lot of holes in its coverage.
There are several ways you can try to fill these holes. But one of the most common is to opt for a Medicare Advantage plan instead of Original Medicare. Here's what you need to know to decide if that's the right move for you.
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What's the difference between Original Medicare and Medicare Advantage?
Original Medicare has two parts: Part A, known as hospital insurance, covers hospital stays while Part B, known as medical insurance, covers doctor visits. This is what you get by default when you sign up for Medicare. But there's a lot that's missing here. It doesn't include coverage for dental or vision care or some medical devices, like hearing aids. It also doesn't include prescription drug coverage. That's where Medicare Advantage plans can come in.
Medicare Advantage plans are administered by private health insurance companies. By law, they have to cover all the same things as Original Medicare, but they can cover extras as well, including prescription drugs. If you go with one of these plans, you'll have a variety of options and price points to choose from and you'll only have one plan to worry about.
This convenience can be a huge plus, but it comes with some trade-offs. Since Medicare Advantage plans are offered through private insurers, you typically have to adhere to that insurer's provider network. On Original Medicare, you can visit any doctor or hospital you want. You can also see a specialist without a referral, which isn't the case with some Medicare Advantage plans.
There are also differences in what you'll pay. Original Medicare has a standard 20% copay for Part B-covered services after you've met your deductible, and there's no annual limit on how much you can pay out of pocket. A Medicare Advantage plan may require you to pay a different amount after meeting your premium. It could be higher or lower. But once you've met your deductible, you won't pay any more out of pocket for Part A- or Part B-covered services for the rest of the year.
There's not a clear right or wrong answer here. A lot depends on your lifestyle. If you plan to travel often and don't want to worry about healthcare networks, Original Medicare might be right for you. But if you don't want to worry about managing multiple insurance plans, a Medicare Advantage plan might suit you better.
Alternatives to Medicare Advantage plans
If you don't think a Medicare Advantage plan is a good fit for you, there are other ways you can get the extra coverage you need. One of the most common ways to do this is by getting a Medicare supplement plan, also known as a Medigap plan. These are also offered through private health insurers, but they're intended to supplement -- not replace -- Original Medicare. Each plan has its own unique costs and coverage options, so you'll have to compare a few to see which best fits your needs.
There are also Medicare Part D plans for prescription drug coverage. Again, private health insurers offer these so you'll have to choose between a variety of options based on which offers the best deals on the prescriptions you use. You can purchase both a Medicare supplement plan and a Part D plan if you'd like. Or you can just get one or the other.
For things like dental or vision care, consider looking into discount programs as well. These aren't insurance, but they can help reduce the amount you pay out of pocket for these services. However, they usually have monthly fees.
Now's the time to make some changes
The open enrollment period runs from Oct. 15, 2023 to Dec. 7, 2023, so if you hope to change plans, you must do so within this period. Sifting through all your options can feel a little overwhelming at first, so it helps if you pick a few specific things that matter to you. This might be coverage for your prescription drugs or a deductible below a certain dollar amount. Use these criteria to weed out unsuitable plans and then dive deeper into the ones remaining.
It doesn't hurt to compare Medicare Advantage plans with Original Medicare and a Medicare supplement or Part D plan. Doing this is often the best way to figure out which path is most cost-effective for you. You can start reviewing your options today over at Medicare.gov.
