When it comes to signing up for Medicare, there’s plenty of confusion. Which part of the four-part program covers hospital stays? Do all parts help pay for prescription drugs? What’s the difference between Original Medicare, Medicare Advantage and Medicare Supplement Insurance?
Medicare itself has four parts. Part A (hospital insurance) and Part B (health insurance) come standard in every Original Medicare Plan. Part C is called Medicare Advantage, and it’s an alternative to a standard Medicare Plan that offers some additional benefits like prescription drug coverage. Stand-alone prescription drug plans, or Part D, cover prescription drugs for those who want to keep their Original Medicare plans. And then there is Medigap.
Medicare Supplement Insurance plans are private health insurance that can help you pay for the “gaps” in your traditional Medicare policy — such as copayments at a doctor’s office, coinsurance at skilled nursing facilities and out-of-pocket hospital costs not covered by Medicare Part A. There are 10 different types of Medicare Supplement Insurance plans, each designated by a letter of the alphabet (you can find details about all 10 plans at Medicare.gov). In most states, the benefits are the same no matter what insurance company you purchase the plan from, though each plan covers different things. Premium prices for each of the 10 Medigap plans varies depending on the benefits offered, and the premiums are separate from your regular Medicare premiums.
[Read: Medical Services Medicare Doesn’t Cover.]
To be eligible for a Medicare Supplement Insurance plan, you must already have Medicare parts A and B. The most comprehensive Medicare Supplement Insurance plan is Plan F, which covers all available benefits. Plan C, which covers everything except excess health insurance costs, and Plan F are the most popular plans, according to Joe Baker, president of the Medicare Rights Center, a nonprofit that helps older adults understand Medicare benefits.
Medicare Supplement Insurance plans are renewable even if you develop health problems, and as long as you pay your monthly premium, your insurance carrier cannot terminate your policy. Prices depend on your age, where you live, the insurer and type of plan you select. In general, Medicare Supplement Insurance plans usually do not cover long-term care, vision or dental care, hearing aids, eyeglasses or private-duty nursing. A Medicare Supplement Insurance plan can also only cover one person. If your spouse needs additional coverage, he or she will need his or her own policy.
[Read: How to Find the Best Health Insurance Plan for You.]
Since a Medicare Supplement Insurance plan supplements your regular Medicare plan, while Medicare Advantage is an alternative way of getting Medicare, you cannot purchase a Medigap plan to help you pay for your Medicare Advantage plan.
There are good reasons to opt for a Medicare Advantage plan instead of Medicare plus Medicare Supplement Insurance. Medicare Advantage covers the same benefits included in Original Medicare (parts A and B), but Medicare Advantage plans often charge different copayments, all your coverage is consolidated under a single plan and there may be no additional monthly premium. The monthly premiums may be lower than Original Medicare, but the out-of-pocket expenses may be much higher. Medicare Advantage plans also include prescription drug coverage at no additional cost. Medigap plans do not cover drug prescriptions, so if you need help paying for prescriptions, you will need to purchase a stand-alone Medicare Part D prescription drug plan. Most Medicare Advantage plans require you to see providers in-network or pay higher copayments for out-of-network service. You may need a referral from your primary doctor to see a specialist at a higher out-of-pocket expense.
The advantage of a Medicare Supplement Insurance plan is that you will have a larger network of providers to choose from. If you have a health condition, a Medicare Supplement Insurance plan may also provide better ways to pay for medical expenses. If you can afford to spend a bit more, a Medicare Supplement Insurance plan may be a wiser choice. It may save you a lot of money in the long run if you need extensive medical services or treatments.
[Read: Medicare vs. Medicare Advantage: How to Choose.]
Regardless of whether you opt to buy a Medicare Supplement Insurance or Medicare Advantage plan, Baker advises not only exploring plan details, but also speaking with providers, neighbors and others who have already purchased the plan you are considering.
You have six months after your 65th birthday to enroll in a Medicare Supplement Insurance plan, according to the federal rule. Depending on where you live, you may be able to purchase it later, but keep in mind that you may have a limited number of plans to choose from at that point.
On the other hand, if you have a Medicare Advantage plan, you may opt to change your plan during the Medicare annual election period. In 2018, enrollment runs from Oct. 15 to Dec. 7.
You can sign up for a Medicare Supplement Insurance plan or Medicare Advantage plan online or by calling Medicare at 1-800-633-4227. (TTY users can call 1-877-486-2048, and the line is open 24 hours a day, seven days a week.) You can explore Medicare Plan Finder to see available plan options in your area.
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Medicare and Medigap: What’s the Difference? originally appeared on usnews.com
Update 03/30/18:
