Choosing the Best Medicare Plan for You: Medicare Advantage vs. Supplemental Options

As you approach 65, you'll need to choose the right Medicare plan to cover your healthcare needs. With various options available, it's crucial to understand each to make the best decision.

Option 1: Regular Medicare

Regular Medicare is the basic program that covers 80% of your medical expenses. This means you'll need to cover the remaining 20%, which is not a small fraction of your medical costs. Here are the additional details:

Rates for the Medicare Part B premium are around $144.00 per month in 2020. There's an annual deductible that you need to pay. If you want drug coverage, you'll need to sign up for a separate Part D plan, which has varying monthly premiums from $0 to $60 depending on the plan.

Even with the Part D plan, you can switch carriers every year and move from regular Medicare to a Medicare Advantage plan annually.

Option 2: Medigap Policies

If you're looking for a more comprehensive coverage, you can opt for medigap (Medicare Supplement) policies. Here's what you need to know:

Medigap policies are sold by private insurance companies, though they are registered with Medicare. These supplementary policies used to have a coverage gap, but this is now eliminated. Popular Plan G is one of the best medigap plans available today, offering significant coverage, particularly for specialist visits and chronic medical conditions.

Premiums for medigap policies can range from $137 to $281 per month, with the additional $144 for Part B premium. These plans may also cover additional expenses such as glasses, hearing aids, and gym memberships. However, if you have to visit the hospital, you'll still be responsible for a portion of the costs, typically 10% of the total bill.

Option 3: Medicare Advantage Plans

Medicare Advantage plans are competitive and often include additional benefits while you're healthy. Here’s a closer look:

Medicare Advantage plans are offered by private companies and must be approved by Medicare. These plans offer a variety of options and can be more cost-effective initially:

Monthly premiums can start at $0 and go up to $70 per month, based on the level of coverage. They often cover additional benefits like eyeglass exams, hearing aids, and gym memberships.

Unfortunately, these plans often have a higher out-of-pocket cost for hospitalizations and surgeries, typically requiring you to pay 10% of the total bill. Additionally, there's a deductible for hospitalizations.

Considerations for Choosing the Right Plan

When deciding between these options, consider the following factors:

Monthly premiums and additional costs for Part D coverage. The level of coverage you require, especially for specialists and chronic medical conditions. Whether the higher premiums are offset by the cost of medical care later in life.

Additional Details

Here's a summary of the costs for each option:

Regular Medicare: $144.00 Part B premium Medigap Policy (Plan G): $281.00 (Part B premium Medigap premium) Medicare Advantage: $0-$70 Part B premium Additional Advantage program premium (if applicable)

Lastly, if you choose to opt for a Medigap policy in addition to regular Medicare, you must enroll when you first become eligible for Medicare. If you miss this one-time opportunity, it might be challenging or even impossible to enroll later.

With so many options available, it's crucial to understand the trade-offs and make a decision that works best for your healthcare needs and financial situation.