If you’re Medicare eligible, you have a lot of decisions to make. Original Medicare (Parts A and B) or a Medicare Advantage plan (Part C)? Supplement insurance or prescription drug coverage? The choices can be overwhelming, but one of the most important factors to consider is cost. Here’s a breakdown of how to Compare Medicare plans so you can make the best decision for your budget.
What is Original Medicare?
Original Medicare is insurance that is run by the federal government. It includes two parts—Part A (hospital insurance) and Part B (medical insurance). You can choose to buy a private supplemental insurance policy—known as Medigap—to help cover some of Original Medicare’s out-of-pocket costs. You can also choose to join a private Medicare Advantage Plan (Part C) or prescription drug plan (Part D). With any of these choices, it’s important that you understand what benefits and costs are covered under each type of plan before making your decision.
Original Medicare vs. Medicare Advantage Plans
Original Medicare is administered by the federal government and covers hospital stays (Part A) and doctor visits (Part B). You’re also responsible for paying a deductible, coinsurance, and copayments out of pocket.
Medicare Advantage plans are offered by private insurance companies and must cover at least as much as Original Medicare. Many plans also offer additional benefits like routine dental, vision, and prescription drug coverage. Monthly premiums for Medicare Advantage plans vary depending on the insurer, but you’ll still be responsible for paying deductibles, coinsurance, and copayments.
Comparing Costs for Original Medicare vs. Medicare Advantage Plans
The first step in comparing costs is to calculate your total out-of-pocket expenses for each type of plan. To do this, you’ll need to know your estimated annual healthcare costs as well as the deductibles, coinsurance, and copayments for each type of plan.
Once you have that information, you can start to compare the costs of different plans. For example, let’s say you’re comparing two Medicare Advantage plans. Plan A has a $0 monthly premium and Plan B has a $30 monthly premium. If your estimated annual healthcare costs are $6,000, Plan A would cost you $1,500 out of pocket while Plan B would cost you $2,340 out of pocket. In this case, even though Plan B has a monthly premium, it would be cheaper overall because you would pay less out of pocket for your healthcare costs.
Of course, it’s not always that simple. You also need to consider other factors like whether or not a plan covers all the doctors and hospitals you want to use as well as what kind of extra benefits it offers. But cost is an important factor to consider when comparing Medicare plans. By taking the time to understand how much each plan will cost you both upfront and throughout the year, you can make sure you’re getting the best value for your money.
Conclusion:
When it comes to choosing a Medicare plan, there’s a lot to consider—but one of the most important factors is cost. By taking the time to calculate your total out-of-pocket expenses for each type of plan, you can make sure you’re getting the best value for your money. And remember, even though some plans may have higher monthly premiums, they may also offer extra benefits that make them worth the extra cost. So don’t just focus on the sticker price—look at all the factors involved before making your final decision.
