How to Choose a Medicare Plan: Answers From Medicare Expert Christian Worstell

• by Christian Worstell
• January 12, 2024
• Reviewed by John Krahnert

If you are eligible for Medicare (or soon will be), it means that many of your hospital-related costs and 80% of the cost for many of your doctor bills (assuming you signed up for Medicare Part B) will be paid by the Federal Medicare program.

That’s the good news.

The bad news is that Original Medicare coverage (Part A and Part B) excludes most retail prescription drugs, which can be expensive.

Original Medicare also has no out-of-pocket spending limit, which means that you could potentially face high out-of-pocket costs in any given year, depending on your health care needs and your coverage.

How do I find Medicare coverage that works for my needs?

There are two types of private Medicare plans you might consider, depending on your eligibility, plan availability and your specific needs:

• Medicare Supplement Insurance (Medigap)
• Medicare Advantage (Part C)

Medicare Advantage plans and Medicare Supplement Insurance plans are very different. You cannot be enrolled in a Medicare Advantage plan and a Medicare Supplement Insurance plan at the same time.

• Medicare Supplement plans can pay for some of the out-of-pocket costs that Original Medicare doesn’t cover.
  
  These costs can include certain Medicare deductibles and copayments – such as the 20% coinsurance that Medicare Part B typically requires you to pay for approved doctor’s services and other outpatient care.
  
  If you have a Medigap plan, you may want to consider also enrolling in a Medicare prescription drug plan (Medicare Part D) also.
  
  
• Medicare Advantage plans are an alternative to Original Medicare. They replace your Original Medicare coverage completely. They include all the benefits of Original Medicare can 
  include benefits that Original Medicare doesn’t cover as well.

It is important to note that all Medicare Advantage plans do not offer the same package of services, so you need to pick a plan that covers what you want.

Not all plans are available in all areas, so you may be unable to find a plan with all of the benefits you want.

How do I choose a Medicare Supplement plan?

Except for in the states of Massachusetts, Minnesota and Wisconsin, there are 10 standardized Medigap plans available nationwide.

These 10 standardized plans are designated Plans A, B, C, D, F, G, K, L and N. Plan C and Plan F will not be available for new Medicare beneficiaries who become eligible for Medicare on or after January 1, 2020.

You may be able to keep your Plan C or Plan F if you are already enrolled in the plan before 2020. If you were eligible for Medicare before 2020, you may be able to buy Plan C or Plan F after this law goes into effect.

The biggest difference between each type of Medicare Supplement plan is what type of Medicare costs they cover and how much of the costs they cover.

You can use this Medicare Supplement Plans comparison chart to learn more about each type of standardized Medigap plan and what they cover.

You can use a Medicare Supplement plan at any doctor or hospital that accepts Medicare. A medical provider who accepts Medicare must also accept your Medigap plan.

How do I choose a Medicare Advantage plan?

Unlike Medicare supplement plans, Medicare Advantage plans may limit your choice of doctors and hospitals.

For example, let’s say you want to undergo a needed liver transplant at a specific facility.

If the hospital and the doctor performing your operation accept Medicare, and if your transplant is covered by Original Medicare, then your operation will be covered at that facility.

If you had a Medicare Advantage plan in the above example situation, your plan may feature a network of providers and hospitals that you are required to visit for your covered care.

You can check with your doctor and with your plan carrier to find out if your procedures are covered at a specific facility or by a certain doctor.

Some types of Medicare Advantage plans may allow you to use any doctor or hospital who accepts Medicare, but you may be charged a higher copayment or coinsurance for using an out-of-network provider.

In general, Medicare Advantage plans work on one of these models:

• Health Maintenance Organization (HMO): You can typically visit only the doctors and hospitals that the Medicare Advantage plan has contracted with (unless in the case of out-of-network emergency care or renal dialysis).
  
  
• Preferred Provider Organization (PPO): You can typically visit any doctor or hospital that the plan has designated as “preferred,” but you might pay a higher copayment or coinsurance if you visit a provider outside of the plan’s preferred network.

There may be additional types of Medicare Advantage plans available where you live.

What is the 2024 out-of-pocket limit for Medicare Advantage plans?

As we noted above, Original Medicare and Medicare Supplement plans do not include an out-of-pocket maximum. This means that in extreme cases, you could potentially face high out-of-pocket Medicare costs in a given year.

Medicare Advantage plans do have an out-of-pocket limit. In 2024, the maximum out-of-pocket spending limit for many Medicare Advantage plans is $8,850. Many plans may have a lower limit.

How much does a Medicare Supplement Insurance Plan cost?

The cost of a Medicare Supplement Insurance plan may vary from area of the country (zip code) to another.

The cost of plans can also vary based on location, provider and coverage offered. Plans with more benefits typically cost more than plans with less coverage.

In 2024, the average Medigap plan premium was $130.58 per month.¹

If you enroll in a Medigap plan, you are also typically required to be enrolled in Medicare Part B. For most people, the 2024 Part B premium is $174.70 per month.

How much does a Medicare Advantage plan cost?

The cost of a Medicare Advantage plan may also vary by zip code, the services covered, and the type of care model it uses (such as an HMO or a PPO).

In 2024, the average monthly premium for a Medicare Advantage plan is $13.24 per month.²

Medicare Advantage plan carriers are paid by the Federal government to take on Medicare beneficiaries. Many plan carriers have been able to realize some operational efficiencies by doing things such as restricting the use of high-cost providers.

How do I choose a Medicare Part D plan?

One important thing to consider about a Medicare prescription drug plan (Part D) is whether it covers the drugs that you actually take or your physician believes that you are likely to need.

This can be difficult, as some Part D plans may change their list of covered drugs, called a formulary, from one year to the next.

One way to find out if a Part D plan covers the drugs you need is to speak with a licensed insurance agent who can help you compare Medicare drug coverage options in your area.

You can also compare Part D plans available where you live and enroll in a Medicare prescription drug plan online in as little as 10 minutes when you visit MyRxPlans.com.³

Again, Medicare prescription drug plan costs may vary by zip code, the drugs that are covered and the plan deductible. 

For 2023, the average Part D plan premium was $55.50.⁴

How do I decide what type of Medicare coverage is right for me?

All the foregoing information may make the challenge of picking your Medicare coverage even more daunting.

But making your decision may boil down to a few factors, such as:

• How healthy am I? Am I likely to say healthy?
• Can I access the providers I want to use?
• Does the Part D plan (or the Medicare Advantage prescription drug plan) cover the drugs I am likely to take?
• Can I afford the premiums for the plan(s) I have chosen?

As a very general rule, if having a wide range of choice of providers is important to you, choose your Medicare Advantage plan carefully and be sure to learn about whether your doctor will accept the plan you are considering.

You may also want to consider costs.

You will typically be required to pay your Medicare Part B premium, even if you choose a Medicare Supplement Insurance plan or a Medicare Advantage plan.

Depending on which Medicare supplement plan or Medicare Advantage plan you choose, the premium cost could vary.

If you keep the four points above in mind, you will be able to choose a Medicare plan that is right for you.

About the author

Christian Worstell is a senior Medicare and health insurance writer with MedicareAdvantage.com. He is also a licensed health insurance agent. Christian is well-known in the insurance industry for the thousands of educational articles he’s written, helping Americans better understand their health insurance and Medicare coverage.

Christian’s work as a Medicare expert has appeared in several top-tier and trade news outlets including Forbes, MarketWatch, WebMD and Yahoo! Finance.

Christian has written hundreds of articles for MedicareAvantage.com that teach Medicare beneficiaries the best practices for navigating Medicare. His articles are read by thousands of older Americans each month. By better understanding their health care coverage, readers may hopefully learn how to limit their out-of-pocket Medicare spending and access quality medical care.

Christian’s passion for his role stems from his desire to make a difference in the senior community. He strongly believes that the more beneficiaries know about their Medicare coverage, the better their overall health and wellness is as a result.

A current resident of Raleigh, Christian is a graduate of Shippensburg University with a bachelor’s degree in journalism.

If you’re a member of the media looking to connect with Christian, please don’t hesitate to email our public relations team at Mike@tzhealthmedia.com.

 

 

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