New To Medicare?
Considering a Switch to Medicare Advantage?
Choosing the Right Coverage For You
If you’re new to Medicare or considering a switch to a Medicare Advantage plan and aren’t sure where to begin, you’re not alone. All the different Medicare options can be a bit confusing or even overwhelming. The good news is what makes Medicare confusing also makes it great. Because there are so many coverage options to choose from, you get to choose the one that works best for you and your healthcare needs. To select the Medicare plan that’s right for you, it’s best to start by learning the basics of Medicare, compare the options, and select what works for your unique situation.
Enrolling in Medicare
When you first become eligible for Medicare, you have a seven-month window in which you may enroll, beginning three months prior to your 65th birthday and ending three months after. In the Medicare world, this is called your ‘Initial Enrollment Period’ (IEP). During your IEP, you may enroll in Medicare Parts A and B as well as sign up for a Part D plan or an all-in-one Medicare Advantage Plan. (Part C).
Switching Medicare Plans
You can also enroll in a Medicare Advantage plan for the first time (or switch from Original Medicare to Medicare Advantage) during the “Annual Enrollment Period” (AEP) between October 15th and December 7th of each year, for coverage beginning January 1.
In addition, you can switch Medicare Advantage plans (or switch from a Medicare Advantage plan to Original Medicare) between January 1st and March 31st of each year. However, you are NOT able to switch from Original Medicare to a Medicare Advantage plan during this time.
Option 1: Original Medicare
To start off, let’s take a look at Original Medicare, or Parts A and B. Part A is known as hospital insurance, and Part B is known as medical insurance. Together, Parts A and B cover around 80 percent of your medical costs. This leaves you responsible for the remaining 20%, and 100% of the cost of prescription drugs.
You are also fully responsible for extra benefits like dental and vision. That’s why most people who enroll in Medicare also choose to add additional coverage to help cover what original Medicare does not. There are three common coverage options that we will explain below.
Option 2: Join a Medicare Advantage Plan
For an “all-in-one” plan that offers comprehensive coverage, many choose a Medicare Advantage plan. These plans cover all the things Original Medicare does and may cover the remainder of what Original Medicare doesn’t. In addition, many Medicare Advantage plans include Part D prescription drug coverage and valuable extras like dental and vision benefits at no extra cost.
Also, some Medicare Advantage plans, like Covenant Advantage, offer premiums as low as $0 and low copays. They also include a built-in “safety net” that puts a limit on the amount you will have to pay out of your own pocket each year for covered medical expenses.
Option 3: Add a Part D Prescription Plan to Original Medicare
To pick up where original Medicare leaves off, one option is to purchase a private stand-alone Part D prescription drug plan. These plans are offered by private insurance companies, and the monthly premium for these plans can vary based on how much they cover. Though this option will help cover some of the cost of prescriptions, it still leaves you exposed for the 20% that Original Medicare doesn’t cover.
Option 4: Add a Part D Prescription Plan and a Supplement to Original Medicare
To cover that 20% Original Medicare doesn’t cover as well as prescription drugs, some people purchase a Part D plan and a Medicare supplement. Supplements can be expensive though, and you will be paying multiple premiums to multiple companies each month.
Protecting Your Savings
Which Medicare coverage option you choose directly impacts the amount you pay out of your own pocket and when you have to pay. To explain this, many use a “pay now” vs. “pay as you go” analogy. The option you choose also plays a big part in your overall financial risk because certain options protect your savings more than others.