Once you have signed up for Medicare Parts A and B, there are two common solutions for additional insurance coverage.
Medicare Advantage Plans (Part C). If you have enrolled in Medicare Parts A and B, you are eligible to select the optional coverage of a Medicare Part C plan, also known as Medicare Advantage. These are private insurance plans that replace the Part A and Part B coverage you otherwise would have received from the federal government and place some further limits on the amount of out-of-pocket expenses for which you could be held responsible.
- Medicare Advantage plans can also include other coverages, like prescription drug plans, or dental, vision, or hearing coverage that is not available through Original Medicare. They tend to provide what seems like more comprehensive coverage in a “one-stop” solution.
- The amount of coverage offered by these plans varies greatly, so it is extremely important to understand all the terms of the plan if you select this option.
- Medicare Advantage plans can be less expensive than Medicare Supplement Plans, with some even offering $0 premiums. If you stay healthy, your out-of-pocket costs are minimal. However, if you get sick, you can actually end up paying more under a Medicare Advantage plan because the cost of services used is often higher.
- Many of these plans require you to use their specific networks, which can limit your treatment options, so pay close attention to any limitations on where you will be “in-network” to avoid unexpected costs in the future.
Medicare Supplement Plans: If you have enrolled in Medicare Parts A and B, you are also eligible for a Medicare Supplement (also known as “Medigap”) insurance policy. A private insurance company provides supplemental insurance to help limit your out-of-pocket expenses. Under these plans, you will still receive Part A and Part B coverage directly from the federal government.
- The coverage available in Medicare Supplement plans is limited to 10 available plan types labeled A, B, C, D, F, G, K, L, M, and N. The level of coverage in each of these plans is pre-set by the federal government, which makes it easier to compare the plans across providers. Plan N from one insurance company provides the same coverage as Plan N at every other insurance company.
- With a Medicare Supplement, you can go to any doctor that accepts Medicare, giving you greater choice in where you go for treatment.
- Unlike Medicare Advantage Plans, these plans do not incorporate prescription drug coverage, so you should be sure to consider whether a standalone Part D plan or other supplemental coverages could be right for you.
You cannot have both coverages, so if you want to protect yourself from the out-of-pocket expenses that Original Medicare does not cover, you will need to choose which plan type is right for you.
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