Keeping Healthcare Costs Low with Medicare Supplemental and Medicare Advantage.
If you’re sixty-five or older, you’re probably already enrolled in Medicare. But did you know that along with Original Medicare, you can sign up for additional benefits in the form Supplemental Medicare or Medicare Advantage? Which additional plan you choose depends on where you think most of your medical spending will go in the years to come.
Why can’t I just go with Original Medicare?
You can, but you could be stuck with high out-of-pocket costs. While Original Medicare limits your cost for each hospital stay to $1,260 as of this year, you must pay 20% for each out-patient medical procedure or office visit. These out-of-pocket fees can quickly add up in the treatment of chronic conditions.
With Original Medicare (Part A for hospital care and Part B for other medical care), you can purchase additional, private coverage called Supplemental Medicare or Medigap. This pays for costs not covered under Original Medicare, such as premiums, copays and deductibles. However, Supplemental Medicare doesn’t cover services that Original Medicare doesn’t cover—like vision, dental, or long-term care.
Most states offer different categories of Supplemental Medicare plans, under the letters A, B, C, D, etc. The different categories offer the same benefits from state to state, but costs can vary greatly.
Keep in mind that Supplemental Medicare doesn’t pay for prescription drugs. You can purchase that coverage under Medicare Part D.
Also called Medicare Part C, Medicare Advantage is private medical insurance that covers all the benefits of Medicare Parts A and B through private insurers approved by Medicare. Some Medicare Advantage plans have additional benefits, like vision and dental, and most cover Medicare Part D prescription drug costs. Medicare Advantage does not cover hospice care, which would still be provided under Medicare Part A.
How can I decide?
Both types of plans have their advantages: Medicare Advantage can keep your premiums low, while Supplemental Medicare can reduce your out-of-pocket costs.
You may want to try Medicare Advantage first; most plans have a 12-month trial period, during which you can switch back to Original Medicare. Just remember that you can’t use the two types of plans together, so if you want to switch from one to the other you must cancel what you already have.