Step 2: Identify Your Healthcare Needs
Now that you know when and how to enroll in Medicare, it’s time to figure out what you need from your plan. Once we nail down these details, we will be ready to choose a plan that best fits the needs we discuss here.
Does Your Doctor Accept Medicare?
Medicare comes with providers that accept Medicare assignment. Before deciding which plan you want to enroll in, check with your favorite healthcare providers to ask if they accept Medicare coverage.
What Prescription Medications Will You Need Your Plan to Cover?
Create a list of the prescription medications that you will need coverage for under Medicare. Identify a Medicare Part D prescription drug plan that is best for you.
How Much Can You Afford to Pay Out-of-Pocket?
You will want to know how much you can afford to pay for your coverage to choose a sustainable plan for your budget in retirement. We will go over the costs of each specific plan in more detail during the next section. For now, come up with a ballpark number that you can afford to pay out of pocket for the following costs:
- Monthly healthcare premiums
- Deductibles
- Prescription drugs outside of your plan
- Doctors outside of your network
- Services outside of your plan
Step 3: Learn About Your Options
Finally, it’s time to choose a plan type that best fits your needs. Keep your medical needs and what you’re willing to pay out-of-pocket in mind as we run through each of the plans and options available to you.
Medicare (Part A & Part B)
Original Medicare is divided into Part A to cover Hospital Insurance and Part B to cover medical insurance. Once you meet the eligibility criteria for Medicare, you will be covered for Part A and Part B services. Keep in mind that this information, especially the costs, will fluctuate over time. Some states will also aid individuals who cannot afford the out-of-pocket costs, based on the individual’s income level.
Choosing Your Plan
Many people will choose private insurance, either to consolidate their Medicare coverage (through Medicare Advantage, Part C) or add on private insurance through a Medigap (Medicare Supplement Plan). This is because Original Medicare doesn’t cover all of your services and costs. People, therefor, will most likely choose one of these options:
- Enroll in a Medicare Advantage Plan (Part C)
- Enroll in Original Medicare Part A and Part B with one or both of the following:
- Supplemental Medicare (Medigap)
- Medicare Part D (Prescription Drug)
Medicare Advantage Plans (Part C)
Medicare Advantage Plans are a popular option for many because these private plans consolidate coverage available to you through Parts A and Part B into a single plan with a prescription drug plan. These plans are run by private companies who agree to follow Medicare’s guidelines and provide these plans to individuals. Benefits offered by these plans vary by counties.
Medicare Advantage Plans include the Part A and Part B plans discussed above, along with drug coverage and extra benefits. You must already have Medicare Part A and Part B to qualify for a Medicare Advantage Plan. Many Medicare Advantage Plans work like a traditional HMO, you may have had experience with.
Medicare Supplement Insurance (Medigap)
Suppose you are enrolled in Original Medicare and struggle to pay the out-of-pocket costs associated with your Part A and Part B Plans. In that case, you can purchase Medicare Supplement Insurance also known as Medigap.
These plans usually will not cover long-term care costs, prescription drugs, private nurses, vision, dental, or hearing. Some will offer coverage outside the United States, but others will not.
Although private insurance companies provide these plans, they are standardized in most states by letter. Meaning, “Plan N” will offer the same benefits, regardless of which company sells it to you. The only difference between plans with the same letter will be the cost-sharing and monthly premiums will vary depending on your policy and location.
Medicare Prescription Drug Plans (Part D)
If you are enrolled in Original Medicare, with or without a Medicare Supplement plan, you will need to make sure you have coverage for prescriptions. Many people will enroll in a separate Part D plan because they do not have alternative creditable coverage for prescription drugs.
These plans will cover many drugs, both brand name and generic, so you want to make sure you choose one that covers the medications you need. All the plan’s drugs are divided into tiers to determine their cost. You can find the details of each drug that a Part D plan covers in its “formulary.”
