Medicare 101: Your Coverage Options

Medicare open enrollment begins next week, on October 15, so we’ve put together this Medicare guide to demystify your Medicare options.

What is Medicare Open Enrollment?

Medicare open enrollment is a 7-week period in which you can change your Medicare coverage. You have the option of switching between plans, reverting to Original Medicare, or joining a Medicare Advantage plan.

Medicare Advantage plans renew their rates and benefits the first of every year. If you are unsatisfied with your new benefits and premiums, you have the option during open enrollment to change to a better plan.

Original Medicare: Part A and Part B

Original Medicare is when you’re enrolled directly in Medicare, administrated by CMS. Your benefits stay the same year after year, and the premiums and deductibles go up slightly with inflation each year. On the other hand, Original Medicare does not cover any pharmaceuticals, dental, or vision expenses. In addition, Original Medicare does not have an annual limit on how much you spend on healthcare expenses before 100 percent coverage kicks in . Unlike private insurers, you will have to pay all co-payments and other related expenses, all year.

Original Medicare consists of two parts—Part A and Part B. Part A covers hospital and inpatient expenses, while Part B covers other medical expenses, such as equipment, preventative screenings, and ambulance transportation.

Medicare Advantage: Part C

Medicare Advantage plans are Medicare plans administered by various private insurers. The plans must cover whatever Original Medicare covers, so in order to stay competitive, each insurer offers additional perks and benefits. Premiums, deductibles, and co-insurances vary widely, as do additional benefits such as dental or vision. Medicare Advantage plans often limit your doctors and providers to a network, but by doing that, they can offer you many more services and benefits.

While co-payments and deductibles may be much higher in Medicare Advantage than in Original Medicare, these plans usually have an out-of-pocket maximum. Once you reach your maximum, your medical coverage will be 100 percent for the rest of the year.

Medicare Drug Plans: Part D

Since Original Medicare doesn’t cover drug expenses, beneficiaries have the option of purchasing a separate Medicare Part D plan to cover their medication expenses. These plans are offered by various private insurers who contract with Medicare to offer the plans. As such, their benefits and premiums can vary widely from plan to plan and year to year.

Medigap Plans

While Medigap plans are not up for renewal during open enrollment time, I wanted to mention them in the interests of a complete picture. Many Medicare members choose to remain in Original Medicare and supplement their coverage with a Medigap plan. These plans are highly regulated. The benefits for each plan, identified by letters A–N, stay the same across insurance companies and states. Only the premiums vary from insurer to insurer, so if you’re in the market for a new plan, make sure to shop carefully for the plan with the most value.

What Do I Need to Know Right Now?

If you are already a Medicare Advantage or Medicare Part D member, you should have received an “Annual Notice of Change” from your insurance company by now. This is a notice of any changes you’ll encounter in your premiums, co-payments, and networks in the coming year.

If you’re unhappy with the changes, here’s what you can do:

  • Change, leave, or enroll in a Medicare Part D drug plan
  • Join Medicare Advantage
  • Return to Original Medicare
  • Change from one Medicare Advantage Plan to another

If you’re happy with your coverage, you don’t need to do anything! Your coverage will automatically renew on January 1, 2019.