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Insurance and Healthcare Consultant

Tammy Burns is an experienced health insurance advisor. She is ACA-certified for health insurance and other ancillary, life, and annuity product.

Find the most affordable Medicare plan for you using resources from Medicare and in your area, whether it is a Medicare Advantage Plan or a Medicare Supplement plan to help with Original Medicare costs. Your healthcare expenses, including premiums and other out-of-pocket costs, can vary depending on which type of plan you choose and how much you need to access your healthcare benefits. Plan ahead and engage with your health.

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What You Should Know About How to Find an Affordable Medicare Plan

  • Out-of-pocket costs: Understand your potential out-of-pocket costs and anticipate how much you think you may need to access your healthcare benefits to determine which plan is best for you.
  • Compare plans: Search and compare Medicare plans and supplements that are available in your area. Access your online resources and local experts to help you find the most affordable plans.
  • Consider Medigap: Compare Medigap policies in your state by shopping around. Plans are standardized, but premiums vary among insurance companies.

How Do You Choose an Affordable Medicare Plan?

The first step is to understand the two main ways you can get your Medicare coverage.
You can choose Original Medicare or a Medicare Advantage Plan:

Original Medicare Medicare Advantage Plans
  • Original Medicare, which includes Part A (hospital insurance) and Part B (medical insurance)
  • Original Medicare with supplemental coverage (Medigap)
  • Original Medicare with a drug plan (Part D)
  • Medicare Advantage Plans, which typically bundle Parts A, B, and D together

There are plenty of resources to help you search for a Medicare plan available in your area. You can visit Medicare.gov to research your options, and you can visit with a licensed Medicare insurance agent or your local Area Agency on Aging. You should review your Medicare insurance plan each year to make sure you have the best, most affordable plan for you.

Consider the fixed and variable out-of-pocket expenses you will be responsible for paying, depending on which Medicare plan you choose.

Health care can be expensive. Affordable care should give you the best bang for your buck and ensure the services you need are available to you when you need them without breaking the bank. You could view an affordable health plan as an intersection of quality care and the lowest possible cost.

What to Consider When You Choose a Medicare Plan

  • Premiums. A payment you make to Medicare or your health care or drug coverage plan. Just like any other type of insurance, you pay periodic premiums to maintain your policy, whether you access your benefits or not. This is a fixed cost.
    • Original Medicare Part A – Most people do not have to pay a premium for Part A because they have worked and paid Medicare taxes. If you do not qualify for premium-free, you can purchase Part A. Click here to see your costs.
    • You will have to pay a monthly premium for Part B, whether you have Original Medicare or a Medicare Advantage plan. For most people, that is $148.50 in 2021. If your annual income is higher than $88,000 for individuals or higher than $176,000 for joint income tax filers, you will pay more.
    • Medigap – You will pay a monthly premium that can range from around a hundred dollars to several hundred dollars, depending on which plan and insurance carrier you choose.
    • Part D (drug coverage) If you purchase drug coverage, you will pay a monthly premium. The national weighted average premium in 2021 is $38 per month. If you have a Medicare Advantage plan with drug coverage, you may pay a drug premium.
    • Medicare Advantage Plan – Most Medicare beneficiaries have access to a zero-premium plan in their area.
  • Deductibles. The amount you must pay for services or medications before your insurance begins to pay. This is a variable cost, depending on whether or not you access your benefits.
    • Original Medicare Part A – You pay a deductible ($1,484 in 2021 for each benefit period). It is hard to predict whether or not you will need hospitalization, but if your health history includes frequent hospitalizations, you should consider this expense.
    • Part B deductible is $203 in 2021 and typically goes up every year.
    • Medigap deductible. This is only applicable if you purchase a high-deductible plan.
    • Part D plan – deductibles vary
    • Medicare Advantage Plan – deductibles vary
  • Copays/coinsurance. A copay is an amount you pay as your share of the cost for a service, such as a doctor’s visit or prescription drug. It is usually a set amount of dollars. Coinsurance is a percentage, for example, 20%, that you pay as your share of the cost for a service after you pay deductibles. This is a variable cost, depending on whether or not you access your benefits.
    • Part B – 20% is the usual coinsurance amount for Medicare-covered services and supplies.
    • Part D – Copays vary, depending on which prescription medication you need. Generic drugs are cheaper than brand-name drugs.
    • Medicare Advantage Plan – Copays for visits to primary physicians are typically minimal and slightly higher for specialists. Coinsurance may apply for some procedures and treatments. If you access extra benefits, you may pay a copay, coinsurance, or have an allowance of a certain amount, such as $200 toward a pair of eyeglasses.
  • Maximum out-of-pocket costs. Medicare Advantage plans come with an out-of-pocket maximum dollar amount that is the most you may have to pay for your Medicare-covered benefits in a year. Costs for healthcare services or supplies that are not covered or partially covered, such as dental, vision, and hearing benefits, do not count toward your maximum out-of-pocket amount. If you have Original Medicare without a Medigap policy to cover out-of-pocket costs, there is no cap on how much you will have to pay.

You can compare these out-of-pocket costs as you research which Medicare plan is best for you. It is important to remember that any one of these costs, such as the monthly premium, doesn’t stand alone. Suppose you anticipate that you will access your benefits frequently. In that case, you may choose to purchase a Medigap plan to supplement Original Medicare so that Medigap will cover most of your out-of-pocket expenses. If you anticipate that you won’t access your benefits often, you may view a zero-premium Medicare Advantage Plan as the most affordable for you.

You also should explore whether or not you qualify for financial assistance to help with Medicare costs. Click here for more information.

What is The Best Way to Keep Medicare Costs Low?

There are several ways to keep your Medicare costs as low as possible:

  • If you have a Medicare Advantage plan, stay in-network and follow the plan’s rules for receiving services, such as obtaining prior authorizations and referrals.
  • Ask for generic versions of your prescribed drugs.
  • Avoid late enrollment penalties. Sign up for Medicare (if you are not automatically enrolled) during your initial enrollment period. Make sure you have creditable coverage for medical and drug expenses, or sign up for Part B, and purchase Part D or join a Medicare Advantage Plan with drug coverage.
  • If you have Original Medicare, use providers and suppliers accept Medicare assignments so that you won’t be billed for more than the Medicare deductible and coinsurance.
  • Make full use of your preventive care benefits.
  • Be prepared when you see your physician make the most of your encounter.
  • Utilize telehealth services when you can.
  • Engage in health-promoting activities.
  • Review your health plan choices each year. Licensed agents or your local Area Agency on Aging can be helpful.
  • If you choose a Medigap policy, ask what discounts may be available to you.
  • Check to see if you qualify for financial assistance.
  • Check into drug discounts programs. You may be able to get prescriptions for less than your insurance copay.
  • Don’t be overinsured. For instance, if you qualify for Medicaid, you will not need a Medigap policy to help with Original Medicare out-of-pocket expenses.
  • Keep good records in case you need to appeal a claim.

How Do You Find an Affordable Medicare Supplement Plan?

The best source for an affordable Medicare Supplement plan (Medigap) is Medicare.gov. Follow the prompts to view and compare the benefits of each plan that is available to you. You can also call your State Health Insurance Assistance Program (SHIP), your State Insurance Department, or a plan’s insurance company.

Medigap plans are standardized across all states, but premiums vary depending on:

  • The insurance carrier
  • Your age
  • Your gender
  • Where you live

There are different types of plans, and not all insurance carriers are licensed to offer plans in all states.

Some states have the option for you to buy another type of Medigap policy called Medicare SELECT that requires you to receive services that are in-network to receive full benefits. If you buy one of these policies, you have the right to change your mind within 12 months and switch to one of the standard Medigap policies.

If you live in Massachusetts, Minnesota, or Wisconsin, Medigap plans are standardized in a different way. See more details here.

An affordable Medicare Supplement plan will help cover the out-of-pocket costs you incur when you access Part A and Part B benefits, including deductibles, copays, and coinsurance amounts. An affordable plan will also have the lowest premium possible for the benefits you anticipate you will need.

Refer to this chart on the Medicare.gov website to view the standardized plans and their benefits. When you compare plans from different insurance companies, make sure you do a side-by-side comparison of the same plan letter/type. For instance, Plan G with all carriers, or Plan N with all carriers, so you are comparing apples to apples. Premiums vary, but the benefits of each plan are standardized.

Medigap policies can be priced in three different ways:

  • Community-rated (also known as “no age-related”) policies charge the same monthly premium to everyone, regardless of age. Premiums may go up because of inflation or other factors, but not because of your age.
  • Issue-age-rated (also known as “entry age-rated”) policies charge premiums based on how old you are when you purchase a policy. The younger you are, the lower the premium, and they won’t go up as you age. They may rise due to inflation or other factors.
  • Attained-age-rated policies base your premium on your current age and continue to rise as you get older.

Another tip for finding an affordable policy is to inquire about discounts that may be available to you. Some insurance companies offer discounts for women, non-smokers, or married persons, or if you pay your premium yearly instead of monthly, or pay by electronic fund transfer.

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