With the Annual Enrollment Period quickly approaching, Medicare beneficiaries are wondering what to do to choose the right Medicare plan. The Annual Enrollment Period allows Americans on Medicare to review and make any changes to their Medicare coverage for the following year. Below, we’ll go over a step-by-step guide to help you make the best decisions possible for your healthcare.

Understanding Medicare

Before you can choose the right Medicare plan for your wants and needs, you must understand the basics of Medicare. Original Medicare consists of Medicare Part A, which covers hospital and inpatient coverage, and Medicare Part B, which includes outpatient medical services and durable medical equipment.

Original Medicare allows access to any doctor nationwide without needing additional authorizations or referrals. Medicare Part D is the drug coverage part of Medicare. You add Part D to Original Medicare to get coverage for prescription drugs filled at a pharmacy. Medicare Part C is also called Medicare Advantage and is another way to get your Medicare benefits.

Medicare Plan options

When choosing your Medicare plan, you have three paths to select from. Stay with Original Medicare only, Medicare Supplement, or Medicare Advantage.

Original Medicare only

When staying with Original Medicare only, you are subject to all the cost-sharing left over after Medicare covers its portion. While if you’re not going to the doctor often, this seems like a good idea, there is no limit on how high your costs can climb. Remember that Original Medicare doesn’t include drug coverage, so you’ll need to add a Part D plan to get coverage for prescription drugs.

Medicare Supplement plans

Beneficiaries who want to retain the freedom and lack of restrictions of Original Medicare can also add a Medicare Supplement (Medigap) plan. Ten standardized plans cover some or all of the cost-share left over from Original Medicare.

Medicare Supplement Chart

Medicare Advantage plans

Part C of Medicare is also called Medicare Advantage. These plans must cover the benefits included in Original Medicare but can include prescription drug coverage, and additional plan extras that Original Medicare doesn’t cover.

These plans provide an out-of-pocket maximum or limit on how much you can spend over the year. These Part C plans have their cost-sharing amounts set by the plan. These costs, additional coverage, and benefits will vary depending on the plan’s service area and chosen plan.

Assessing Your Needs

Now that we understand Medicare and the plan options, we can look at what you need to do to choose the right Medicare plan based on your needs and wants. Everyone has different needs and wants, which means the right plan for you may differ from the best plan for your spouse or neighbor.

Thinks that you want to reflect on are:

How often do you go to the doctor?

Asking yourself How often you go to the doctor answers a few questions. Most people who are going to the doctor often have health issues. A Medicare Supplement may be the best option if you’re new to Medicare and have many health issues.

You can choose a plan that covers you with minimal out-of-pocket expenses. If you decide later that you need more comprehensive coverage, you may not be able to pass the underwriting process to get a Medigap plan.

If you don’t visit the doctor often and want to keep monthly costs low, Medicare Advantage plans in many areas have $0 premium plans. Remember that you may need referrals to see specialists and maybe even to change your doctor.

Which plans cover your prescription drugs best?

When reviewing your prescriptions, reviewing which plans cover them best is important. Getting the most or least expensive plan doesn’t do much good if your prescriptions aren’t covered or covered well. You could be paying a little bit in premiums, but at the end of the year paying significant amounts for copays when getting your prescriptions. Choose a plan that covers your medications adequately.

What’s your budget?

Everyone has different budgets on what they can afford and what’s comfortable for them. If you’re on a tight budget, Medicare Advantage plans can be attractive as you pay as you use the services. However, a Medigap plan is more predictable as you know exactly what healthcare costs are monthly, and there are no surprises.

Do you travel?

Traveling is an important consideration, especially upon retiring. Medicare Advantage plans have several options, such as HMO or PPO-style plans. While HMO plans will cover you out of network if you have an emergency, routine coverage is not included out-of-network. PPO plans will allow you to see any doctor contracted with Medicare in or out of the network. However, you may pay more for out-of-network services.

While Original Medicare and Medigap allow the freedom to see any doctor nationwide who accepts Medicare. No hoops, no authorizations, no worries. Medicare Supplement plans are desirable for individuals who travel for long periods or have residents in multiple states.

How important are your current doctors to you?

Some people have doctors they can’t live without, and others don’t care who their doctor is. If you must keep your doctors and you’re considering Medicare Advantage, check the networks and ensure all doctors you want to use are in the network. Otherwise, you may not have coverage or pay more to see them.

In addition, doctors can join and leave networks at any time, so it’s possible to lose your healthcare provider midyear, and not be able to leave the Part C plan. You’d have to change doctors if this occurs. Since Medigap plans are secondary to Original Medicare, you can see them as long as the healthcare provider accepts Medicare.

Are plan extras important to you?

Plan extras have been a huge factor for many Americans, and they continue to increase in popularity. While Medicare Advantage plans can include extra coverage for dental, vision, and hearing, gym memberships, healthy food cards, utility assistance, and more, Medigap plans are limited to items covered by Original Medicare.

Some Medigap companies will offer discounts on gym memberships as well as dental, vision, and/or hearing coverage. If extra benefits are your primary concern, Medicare Advantage may be the better choice.

Comparing Plans

Once you have determined your needs and wants, it’s time to compare the plan in your area to choose the right Medicare plan.

Medicare Advantage pros

  • Low to no monthly premiums in many areas
  • Additional benefits
  • Limitation of costs throughout the year
  • No additional plan is needed for prescription drugs

Medicare Advantage cons

  • Limited to a network
  • You may not get to keep your doctors
  • Additional authorizations and referrals are needed

Medigap pros

  • Portable – covers you the same regardless of where you are in the US
  • Budgetable – Fixed monthly premium and little to no additional costs
  • No additional referrals or authorizations to see healthcare providers or services
  • No additional plan is needed for prescription drugs
  • Can use any healthcare provider nationwide that accepts Medicare

Medigap cons

  • No prescription drug coverage. You’ll have to buy a Part D plan.
  • Higher monthly premiums
  • Not many plan extras

Get help choosing the right Medicare plan for AEP

While this may seem overwhelming, getting help from a Medicare expert can help make the process quick and easy. They have access to specialized programs that allow them to input the information collected and show side-by-side comparisons to review the plans. Fill out our online rate form to compare the top plans in your area and find a licensed professional to assist with your needs.

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Written By:
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Lindsay Malzone, Lindsay Malzone is the Medicare editor for Medigap.com. She's been contributing to many well-known publications since 2017. Her passion is educating Medicare beneficiaries on all their supplemental Medicare options so they can make an informed decision on their healthcare coverage.
Reviewed By:
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Rodolfo Marrero, Rodolfo Marrero is one of the co-founders at Medigap.com. He has been helping consumers find the right coverage since the site was founded in 2013. Rodolfo is a licensed insurance agent that works hand-in-hand with the team to ensure the accuracy of the content.