You’re turning 65 … congrats! All those years of paying Medicare tax has finally paid off. You now have access to truly affordable healthcare. The question now is, which route do I choose – Original Medicare with a Supplement OR a Medicare Advantage plan? If you haven’t begun your research just yet, no need to worry. That’s what we’re here for!

To help get a better feel for Medicare in general, let’s briefly dive into the four pieces of the puzzle – Part A, Part B, Part C and Part D. Here’s what you need to know:

Part A – This part primarily covers inpatient hospital visits, but also includes skilled nursing facility care, home health and hospice care. You will get this for free as long as you’ve worked 40+ quarters in your lifetime.

Part B – This covers most medically necessary doctor’s services, preventative care, durable medical equipment, hospital outpatient services and more. According to CMS.gov, “The standard monthly premium for Medicare Part B enrollees will be $144.60 for 2020…”, however this is subject to your income level. You can find the income chart and information on the Part B deductible here.

Part C – These are Medicare Advantage plans. We’ll go into how these work later in this blog.

Part D – Prescription drug plans

Medicare Supplements

Now that you know the four parts, it’s time to look into supplementary insurance. Many people think that simply having Parts A and B is all you need once you turn 65. False! Only having Medicare Parts A and B will leave you with coverage gaps. This is the reason for Medicare Supplements (Medigap plans) and Medicare Advantage plans.

These work hand in hand with Medicare, but work a little different. When you enroll in a Medicare Supplement, you’re still responsible for paying the Medicare Part B and Part D premiums (also Part A if you haven’t worked 40 quarters). Supplements are more permanent than the traditional Advantage plan because there’s no yearly special enrollment period, just the initial open enrollment period. This period begins three months before you join Medicare and ends three months after. During this OEP, you’re able to choose which ever supplement you’d like from any company without going through medical underwriting, meaning you are guaranteed coverage. Once your OEP is over, you will need to pass medical underwriting in order to enroll in one of these plans (unless you qualify for a Special Enrollment Period). These plans typically come with very low deductibles when compared to under 65 health insurance and they allow you to go to any doctor in the country that takes Medicare assignment.

Medicare Advantage

The major difference between Original Medicare and Medicare Advantage plans is where the money for benefits comes from. When you’re enrolled in Original Medicare, the government is paying for your benefits when you get them. The supplement company then comes in and pays whatever is left after the government covers your Part A and B expenses. When you have a Medicare Advantage plan, everything goes through a private insurance company. In this instance, the government is paying the insurance company to cover your benefits.

The first step to enrolling in an Advantage plan is to sign up for Parts A and B. Once you’ve done that, you’ll want to do your research regarding which type of Medicare Advantage plan you’d like. Here is a quick breakdown of each type of plan:

• Health Maintenance Organizations (HMO) – in these plans, you can only go to doctors or hospitals in the plan’s network.
• Preferred Provider Organization (PPO) — PPO’s offer a discount when you use doctors or hospitals that are in network. However, you can go outside of the network for a higher charge.
• Private Fee-for-Service (PFFS) plans—Similar to Original Medicare, you can go to any doctor or hospital as long as they accept the plan’s payment terms. The plan determines how much it pays providers and how much will come out of your pocket.
• Special Needs Plans (SNPs)—SNPs are designed to focus on specialized healthcare for specific groups of people. The most common situations are for seniors who are also on Medicaid or have certain chronic conditions.
• HMO Point-of-Service (HMOPOS) plans—These are HMO plans that may allow you to get some services out-of-network for a higher copayment or coinsurance.
• Medical Savings Account (MSA) plans—MSA plans combine a high-deductible plan with a savings account. Money is deposited from Medicare into the account to be used for health care services for the year.

Now that you’ve figured out which type of Advantage you’d like to enroll in, you’ll want to check to see if it has a prescription drug plan built in. While most Medicare Advantage plans include a drug plan, certain types do not. Specifically, MSA’s and certain Private Fee-for-Service plans will not include a prescription drug plan, so you’ll need to enroll in a separate Part D plan. Just make sure to do your research first, as there can be penalties if you are enrolled in an Advantage plan with a prescription plan built in AND a separate drug plan. Also, make sure to ask your agent what kind of additional benefits your Medicare Advantage plan comes with. Certain companies will include additional benefits such as dental coverage, vision coverage and even gym memberships!

Pros and Cons

Now that we’ve touched on the details between the two plans, lets recap some pros and cons to help make the decision a little easier!

Medicare Supplement Pros	Medicare Supplement Cons
No need to re-enroll in a new plan every year	Typically more expensive than Advantage plans
Standardized benefits from company to company	Do not include non-medical benefits like dental or vision
Coverage anywhere in the country	Need to get Part D plan separately
Guaranteed access to any doctor that takes Medicare assignment	Can’t switch without passing medical underwriting

Medicare Advantage Pros	Medicare Advantage Cons
Often at little-to-no premium	Must re-enroll every Annual Enrollment Period
Can include dental, vision and hearing benefits	Often subject to networks
Often have a prescription drug plan built in	Limited service around the country when traveling
Personalized plan structures	Plan designs can change from year to year
Some include gym memberships	Certain plans have bigger gaps in coverage

For those who aren’t insurance savvy, these terms can seem like a foreign language. That’s why it’s so important to find an agent who you trust and who knows the ins-and-outs of the two types of plans. Not sure where to find a good agent? Try talking to friends and loved ones about who they’ve used. Let them do the research for you!

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