One of the good and bad things about Medicare is that there are many plan options to choose from. We say good and bad because multiple options are great, but it can be pretty confusing when trying to figure out which plan is most suitable for you.
When you enroll in Medicare Parts A and B, you become eligible to apply for either a Medigap or Medicare Advantage plan to help with cost-sharing since Medicare does not pay for 100% of your healthcare services.
Every Advantage plan will be different, but we’ll get into details about that later. Your other option, Medigap plans, are standardized, so the only difference for a specific type of plan will be the insurance carrier and premium rate. A few of the most popular ones on the market are Plan G and Plan N. Let’s go over some of the distinctions between the most popular Medigap plans and how Advantage plans come into play. To learn more details about Plan N, visit Boomer Benefits – Plan N
Medigap Plan Options
Medigap plans pay secondary to Medicare and help by covering some of the “gaps” in Medicare that you are left to pay out-of-pocket, such as copays, deductibles, and coinsurance. For example, you pay an annual deductible for Part B before it covers your Part B services and treatments. Part B pays for 80% of your approved outpatient services and leaves you to pay the remaining 20% with no cap on how much the remaining 20% is.
These plans also follow Medicare’s network, so as long as a healthcare provider accepts Medicare, they must also take your Medigap plan.
Insurance carriers can offer any of the ten standardized Medigap plans: Plan A, B, C, D, F, G, K, L, M, and N. Each one provides the same healthcare coverage across the board, no matter which carrier you choose. There are some coverage differences between the plans, so you will want to consider how much coverage you want and which plan best suits your budget. So, let’s look at some differences between a few of the most popular plans.
One of the most popular plans is Plan G. This covers everything except for the annual Part B deductible. Once you satisfy the Part B deductible, all your Medicare-approved services are covered.
Since this plan does not cover the Part B deductible, these plans typically offer lower monthly premiums than Plan F.
Plan N is step down in coverage from Plan G, but it still covers most of your out-of-pocket costs. When you enroll in a Plan N, you pay the Part B deductible and some copays for doctor and emergency room visits.
There is a thing known as an “excess charge” that you are also responsible for under Plan N. This charge means that when you go to a provider who accepts Medicare but not Medicare’s approved rate for a service (Medicare Assignment), the provider is allowed to charge up to 15% more for their service. You can avoid excess charges altogether by only seeing providers who accept Medicare Assignment.
Since you have a few more out-of-pocket costs associated with Plan N, these premiums are usually lower than Plan G.
Costs for Medigap plans will vary across the nation because your rate is based on multiple factors, such as your age, zip code, gender, and tobacco use. The premiums will differ for everyone, so the main things to focus on will be how much coverage you want and what works best for your budget.
Medicare Advantage Plans
Medicare Advantage plans are another option for beneficiaries enrolled in Part A and B. These plans often have lower or even $0 premiums, but the plan structure is quite different compared to Medigap plans.
When you pick Medicare Advantage, you receive your Part A, Part B, and Part D benefits through the private insurance carrier you enroll in a plan with. You will have a network of healthcare providers and pharmacies, and the insurance carrier will set your cost-sharing amounts and network for your healthcare services. Insurance carriers may offer additional benefits, such as dental, vision, and hearing benefits, with their Advantage plans. Still, it’s essential to know that these added benefits are not required and can change from year to year.
Part D plans
If you have your mind set on a Medigap plan, the other part you will want to remember is that you will need a Part D plan to go along with it. Medicare Part D provides you with prescription coverage.
You can either enroll in a Part D or Advantage plan, so if you choose a Medigap plan, you want to make sure you enroll in a Part D plan to have coverage for your prescriptions. There is a penalty for not enrolling in a Part D plan once you become eligible, so be sure to enroll during the appropriate time to avoid being penalized.
You have options
The main point is that you do have options to help with your out-of-pocket costs. You want to consider the differences between the two types of plans and determine which one will best fit you. There are short and long-term factors to take into account when it comes to your decision, but rest assured, it is yours alone to make.