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Oct. 19, 2020, 3:15 p.m. EDT

Finding the best Medicare plan for you

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Everyone’s insurance needs are unique; the best Medicare Advantage plan or Medicare Supplement plan for your neighbor may be a disastrous choice for you. That’s why it’s so important to know what to look for and how to choose between plans before you buy.

This guide explains all your Medicare options, how to identify the best Medicare Supplement and Medicare Advantage plans, and where to find the best-rated Medicare Part D plans. It will also show you what to do if you picked a plan that’s not working out for you.

When you first enroll in Medicare, you have a choice to make: Original Medicare or Medicare Advantage.

Original Medicare is a two-part plan offered by the federal government :

You have separate deductibles and coinsurance for each part of Original Medicare.

Medicare Advantage provides health coverage through private insurance. For most people, Medicare Advantage feels more familiar because it’s similar to group health plans provided by employers. There is typically only one deductible for all your health services and you pay a flat copayment when you get care.

About two-thirds of all Medicare enrollees choose Part A and Part B, according to the Kaiser Family Foundation , but the number of Medicare Advantage members has grown rapidly over the past decade. According to the Centers for Medicare and Medicaid Services (CMS), the average person now has access to 39 different Medicare Advantage and Part D prescription drug plans

Part D offers optional prescription drug coverage . If you choose Original Medicare, you have to buy a separate Part D plan to help cover drug costs. Part D is included in most Medicare Advantage plans, so you don’t pay separate monthly premiums for the coverage. There is a separate deductible for Part D, though, even when it’s included in your Medicare Advantage plan.

Medicare Supplement insurance, or Medigap, works with Original Medicare to pay your out-of-pocket costs under Part A and Part B . Most people choose Medicare Supplement plans for protection against unexpected medical costs. The best Medicare Supplement Plans cover all — or nearly all — of your Original Medicare expenses. However, it can’t be used to help with drug costs under Medicare Part D. 

You need to look at your whole picture to choose the best Medicare plan: Your health, your financial situation and even your travel plans in retirement. While you can use Original Medicare anywhere in the country, most Medicare Advantage plans require you to use a provider network for all but emergency care.

There is no limit to your out-of-pocket medical expenses with Original Medicare. With Medicare Advantage, your out-of-pocket costs are capped by the federal government, although some plans set their limits below the federal maximum.

You may pay multiple deductibles with Original Medicare: 

Most Medicare Advantage plans have a single deductible that covers both inpatient and outpatient services

Coinsurance under Original Medicare is based on the actual cost of your services. The coinsurance for Part B is 20% of the allowable charges. Medicare Advantage plans typically charge a flat copayment at the time of service, regardless of the total cost of the visit.

*Based on 2020 costs as provided by the Centers for Medicare and Medicaid Services

The best Medicare plan is one that fits with your lifestyle and finances, so it’s important to keep these points in mind before you decide:

What is the best Medicare Supplement insurance plan? The answer to this question is different for everyone. Medicare Supplement policies are private insurance plans, but the benefits are standardized by the government in all but three states (Massachusetts, Minnesota and Wisconsin). In other words, Plan G sold by Mutual of Omaha has essentially the same benefits as Plan G sold by Humana. The only meaningful difference is the monthly premium.

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