Before we get to Part C, let’s take a look at one other Medicare supplemental option—Medicare Part D. This part is solely for prescription medications and plan holders pay a monthly premium along with copayments and often deductibles. You can buy a Part D plan through a private insurer if you have Plans A and B, or your Advantage plan may already cover the medication you need in which case you wouldn’t need to separately enroll in Part D.
According to AARP, if you have really high prescription drug bills, in 2020 you’ll pay no more than 25 percent of the cost of both brand-name and generic prescriptions. If your drug costs continue to mount, you may reach the point of qualifying for catastrophic coverage.
Be sure to check at Medicare.gov whether the plan you’re considering has the medicines you take on their covered lists, called formularies. Those lists change each year so be sure to recheck your plan every year at open enrollment time, which runs from October 15 to December 7 (A side note about Medicare enrollment: Medicare enrollment can be tricky. There is an initial enrollment period followed by open enrollment periods. For a quick guide on enrollment, go to mymedicarematters.org).
Now on to Medicare Part C, also known as Medicare Advantage (MA). This is a private health plan and must provide at least the same amount and type of coverage that Medicare Parts A and B provide. Advantage plans are provided through Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Private Fee-for-Service (PFFS) plans, Special Needs Plans (SNPs), and Medical Savings Account (MSA) plans.
Sometimes the Advantage plan can be cheaper than just Medicare Parts A and B and may include drug coverage. The difference is that you’d be dealing with a private insurer and have to select doctors within a network. Such plans also have an annual cap on out-of-pocket costs, which original Medicare does not have.
Many Advantage plans also offer dental and vision insurance as well. In the past few years, the Centers for Medicare and Medicaid Services, which sets the rules for Medicare, has allowed Medicare Advantage plans to cover such extras as wheelchair ramps and shower grips for your home, meal delivery, and transportation to and from doctors’ offices. To make sure you get the services you want and need, be sure to read the plan descriptions carefully.
It’s important to note that if you decide to go for the MA coverage, you first must still sign up for basic (Parts A or B) Medicare. Only then can you choose an MA plan and sign with a private insurer because, while technically separate plans, Parts C, D, and MA are in still considered “add-on” plans.
And Then There’s Medigap
Finally, a word about Medigap, also called supplemental insurance. AARP describes it as your optional backup plan. You can buy a Medigap policy, which is sold by private insurers, to help with copays and deductibles not covered by the original Medicare. A good way to look at Medigap is that it’s one-stop coverage. There are currently 8 different Medigap plans available (A, B, D, G, K, L, M and N) versus the 10 that were available in prior years. As of January 2020, plans C and F are no longer sold to people newly eligible for the program.
Mary Mealer, life and health manager at the Missouri Department of Insurance, Financial Institutions & Professional Registration explains the differences between the original 10 policies as some being “high deductible, some require higher cost-sharing, and some cover more costs.” Consumers should “evaluate their individual situation as to what plan meets their needs and what they can afford,” she advises.
AARP reported that nationwide, premiums are based on three pricing systems and vary widely based on where you live. Experts suggest that you ask a potential insurer which pricing system it uses before buying a Medigap policy. That way you’ll know whether to expect increases as you age.
Mealer also suggests that consumers contact their state’s insurance department before signing to make sure the agent and company selling the policy are licensed by the state and to find out that company’s complaint record. Each state has a State Health Insurance Assistance Program that can help you find this information.