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How Do I Compare Medicare Plans?

Some Medicare plans are offered by private insurance companies approved by Medicare. This means that just like something else you might shop for, you can have options when it comes to your coverage. The two main things to consider when you compare Medicare plans is the extent of the coverage and the costs of the plan. Medicare plans costs and coverage may vary within some Medicare-defined limits.

Comparing Medicare plans: stand-alone Part D prescription drug plans

Prescriptions drugs you take at home are generally not covered by Original Medicare (Part A and Part B). You have two options for prescription drug coverage through a Medicare plan: a stand-alone Part D prescription drug plan that goes along with Original Medicare or a Medicare Advantage plan with prescription drug coverage.

We will start by talking about stand-alone Medicare Part D plans. According to the Kaiser Family Foundation (KFF), a total of 901 stand-alone Medicare Part D plans were available across the United States in 2019. Your particular state will generally have 22 to 30 plans available according to KFF.

Coverage: Each stand-alone Medicare Part D plan has a formulary, or list of covered prescription drugs. Medicare generally mandates that Medicare Part D plans cover at least 2 prescription drugs per category of commonly prescribed classes. However, the plan can chose which specific prescription drugs they cover.

If you are already taking prescription drugs, you may check that your prescription drug is covered before you sign up for a specific Medicare plan. If you already have Medicare Part D prescription drug coverage and begin taking a prescription drug that is not covered, you can ask for an exception.

Cost: A stand-alone Medicare Part D plan may have a monthly premium, for example $15 or $23.90. A premium is an amount you pay to have coverage, even if you do not fill any prescriptions.

A stand-alone Medicare Part D plan may also have a deductible. This is an amount you pay out of pocket before your plan begins to pay. Some Medicare plans may have a $0 in-network deductible.

A stand-alone Medicare Part D plan may also have a copayment or coinsurance which is the amount you pay to fill a prescription. Prescription drugs are typically placed on tiers with prescription drugs on tier 3 typically having a higher copayment than prescription drugs on tier 1.

Comparing Medicare plans: Medicare Supplement plans

Medicare Supplement (Medigap) plans cover Medicare out of pocket costs including copayments, coinsurance and deductibles. There are a total of 10 Medicare Supplement plans labeled A, B, C, D, F, G, K, L, M and N. You may only be able to a buy Medicare Supplement plan once in your life, so think carefully about your decision.

Coverage: All Medicare Supplement plans generally cover Medicare Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up.

All Medicare Supplement plans also generally cover at least 50% of Medicare Part B coinsurance or copayment, first three pints of blood, and Part A hospice care coinsurance or copayment.

Your Medicare Supplement plan may or may not cover all or part of the skilled nursing facility care coinsurance, Medicare Part A deductible, Medicare Part B deductible, Medicare Part B excess charge and foreign travel emergencies up to plan limits.

Costs: Most Medicare Supplement plans have a monthly premium that you must pay for coverage, even if you do not use any medical services. Only Medicare Supplement Plan K and Plan L have an out-of-pocket maximum.

Comparing Medicare plans: Medicare Advantage plans

Coverage: Medicare Advantage plans must cover Medicare Part A (hospital insurance) and Medicare Part B (medical insurance) at least to the extent of Original Medicare. Many, though not all, Medicare Advantage plans also include drug coverage. Some Medicare Advantage plans include additional benefits, such as routine dental, routine vision, routine hearing, and fitness benefits.

Costs: Some Medicare Advantage plans have a monthly premium and some have a $0 premium. Some Medicare Advantage plans have a deductible and some do not. Copayments and coinsurance can vary greatly with Medicare Advantage plans. For example, one plan may charge you a 20% coinsurance to see a primary care doctor and another plan may charge you $0.

Overall: how to compare Medicare plans

You may want to pick a Medicare plan that you will be happy with for a number of years. However, if you find yourself dissatisfied with your Medicare plan you may be able to change it during the Medicare Open Enrollment Period which runs annually from October 15 to December 7. However, Medicare Supplement is excluded from this Open Enrollment Period. Unless you have a special situation, the only time you may be able to buy a Medicare Supplement plan is a six month period that begins the first day of the month in which you turn 65 or older and enrolled in Medicare Part B.

To look for Medicare plans in your area, enter your zip code on this page.

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