types of medicare plans

In 2019, over 61 million Americans were enrolled in Medicare. Almost nine million of those individuals qualified for Medicare because of disabilities. 

There are several types of Medicare plans that are available to Americans once they reach the qualifying age or have a disability. These plans can be tricky to navigate and understand as the open enrollment period quickly approaches. 

If you are wondering what your options are with Medicare, or are trying to sign up a loved one, keep reading on to learn more. 

What Is Medicare?

Medicare is a government health insurance plan. Typically, Medicare is only available for individuals who are 65 and older. Those who have certain disabilities and are younger than 65 can still qualify for coverage.

People who already receive Social Security benefits will be automatically enrolled in Medicare Part A. Medicare Part A coverage does not have monthly premium costs if you have paid Medicare taxes for ten years or longer. 

You can also still qualify for Medicare Part A coverage without additional costs if your spouse paid Medicare taxes. Other forms of Medicare coverage, such as Medicare Part B and Medigap, require additional payments. 

Medicare plans fall under three different categories that include: 

  • Original Medicare
  • Medicare Advantage
  • Medigap

Original Medicare 

Original Medicare plans include Part A, Part B, and Part D. Medicare Part A is the most common type of insurance, and over 52 million elderly adults were enrolled in it in 2019. 

Part A covers your typical inpatient hospital stay. It also includes coverage for skilled nursing facilities, hospice, and home health care. Medicare Part B covers other doctor visits, outpatient care, medical equipment, and other preventive services. 

Even though Medicare Part B requires a monthly premium, many people opt for including it with their Original Medicare plans because of the wide range of services outside of inpatient care that it covers.

Medicare Part D is also an additional cost but includes coverage for prescription drugs or vaccines. 

Medicare Advantage

Medicare Advantage plans include a bundled version of Parts A, B, and D. Initially, Medicare Advantage was known as Medicare Part C. 

This plan is offered through private companies but it still follows the general requirements and guidelines set out by the federally run Medicare plans. In addition to the benefits of standard Medicare plans, this specific plan also usually offers other benefits such as: 

  • Coverage for fitness programs
  • Vision services
  • Dental services
  • Hearing services

It is important to remember that each company will operate differently, and it is important to follow up with coverage on services before signing up. There are also differences in out-of-pocket expenses, although some Medicare Advantage plans offer minimal or no monthly costs. 

In addition to monthly premiums, you will also have limitations with the health care providers you see. The providers covered under Medicare Advantage plans need to be under the network you sign up with. If you choose to see a provider outside of the network, then you might accrue added costs. 

Medicare Supplement Plans

Medigap is a Medicare supplement plan. If you are already enrolled in a Medicare Advantage plan, you cannot enroll in Medigap. 

Similar to the Medicare Advantage plan, private companies also offer Medigap. This plan can assist in costs that are not covered by Original Medicare plans such as deductibles or copayments.

In order to qualify for Medigap, one must already be enrolled in Part A and Part B coverage. You will pay the private insurance company the monthly premiums for Medigap, and it often does not cover prescription drug expenses.

Medigap also only covers one person – this means that your spouse will also have to enroll and pay for the additional coverage. 

Benefits of Additional Plans

It may seem difficult in determining if you need additional coverage outside of Original Medicare plans. Almost a quarter of the population under Medicare plans enroll in Medigap.  

Even after someone pays the annual deductible for Medicare Part B, there is still a 20% coinsurance payment due. If you do not want to pay out of pocket for these continued expenses, Medigap can fill in the gaps. 

If you travel frequently, especially internationally, Medigap is highly beneficial as it covers you in more scenarios. 

Best Health Insurance

The best Medicare health insurance policies largely depend on what you or your loved one’s health needs are and the monthly cost you are willing to pay. For 2021, Medicare Part B monthly premiums averaged just under $150. 

The annual deductible for Part B for this year is $203. The cost for monthly premiums increases based on the yearly income of your household. Most people enrolled in Medicare Part A do not have any monthly premiums, and annual deductibles are approximately $1,500.

This cost is only inclusive of inpatient hospital stays for the first 60 days. After 60 days, the beneficiary is responsible for paying approximately $370 between days 61 and 90. 

Additionally, if someone has not met the employment and tax requirements before enrolling in Medicare, there will be additional monthly expenses. Those who are enrolled in Medicare because of disabilities also fall under this category.

Explore the Different Types of Medicare Plans

There are many Medicare options for someone to choose from that have a variety of coverages and expenses. The types of Medicare plans that are right for you depend on your health needs, budget, and current enrollment status. For instance, if you are likely going to meet the annual deductible on Part B coverage, you might benefit from supplemental plans.

However, if you still have questions regarding Medicare Advantage and Medigap plans, contact us today and let one of our qualified consultants help you enroll.