First: what Original Medicare covers
Original Medicare is Part A (hospital) and Part B (doctors, tests and outpatient care). After the deductible, Part B usually pays 80% of the approved amount and you pay the other 20%.
Original Medicare has no yearly limit on out of pocket costs, and it does not include prescription drugs. That is why most people add other coverage.
Path 1: Medigap plus a drug plan
A Medigap policy (also called Medicare Supplement Insurance) helps pay the copays, coinsurance and deductibles that Original Medicare leaves.
You can see any doctor or hospital in the country that accepts Medicare, with no network and usually no referrals.
Medigap does not cover prescriptions, so it is paired with a Part D drug plan. You pay a monthly premium for each, on top of the Part B premium.
Path 2: Medicare Advantage (Part C)
A Medicare Advantage plan is offered by a private company approved by Medicare. You are still in Medicare, but the plan provides your Part A and Part B benefits.
Many plans include drug coverage and extra benefits such as dental, vision or hearing. Benefits vary by plan and change from year to year.
Most use a network of doctors and hospitals. Every plan has a yearly limit on out of pocket costs for in network services.
You still pay the Part B premium.
Timing matters
The best time to buy a Medigap policy is your Medigap Open Enrollment Period: the 6 months that start the month you are 65 or older and enrolled in Part B. During those months the company cannot turn you down or charge you more because of your health.
After that window, in most cases the company can ask health questions before accepting you.
Medicare Advantage plans can be changed every year from October 15 to December 7. If you already have a Medicare Advantage plan, you can make one change from January 1 to March 31.
Four questions to decide
- Are your doctors and your hospital in the plan network?
- Are your prescriptions covered, and at what cost?
- Do you spend part of the year outside Florida?
- Which do you prefer: a higher monthly premium and fewer surprises, or a lower premium with copays and a network?