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Section 3: Costs and Coverage 
 

Comparing Your Medicare Options

Consider your choice of doctors, your lifestyle and the costs


ESTIMATED READ TIME: 5 MINUTES

  

IN THIS ARTICLE

 

•  Your choice of doctors
•  Your coverage when traveling
•  Your options for additional coverage
•  Your expenses
 

When considering how to customize Medicare to meet your health care needs, you’ll want to weigh the pros and cons of coverage through the federally run original Medicare program or a private Medicare Advantage plan.

 

Your costs, prescription drug coverage, choice of doctors and ability to get coverage when you travel will differ. Before making a decision, be sure to compare the features of each option.

 

illustration of a woman holding a small version of herself in her hand as if she's examining her lifestyle

 

Your choice of doctors

 

Original Medicare. With traditional Medicare, you can choose any providers who accept Medicare. You don’t need a referral to see a specialist, and you don’t have to worry about your doctor leaving a plan’s network.

 

About 99 percent of physicians who don’t treat children participate in Medicare, according to the Kaiser Family Foundation. But if you’re looking for a new doctor, you may discover that it’s harder to find one who accepts Medicare. About 1 in 5 primary care doctors aren’t taking new Medicare patients.

 

Medicare Advantage. This Medicare option resembles a private insurance plan that you may have had through an employer. The most common types are health maintenance organization (HMO) and preferred provider organization (PPO) plans.

 

Both have networks of doctors, hospitals and other services. You’ll usually pay less if you use in-network providers.

 

If you have an HMO plan, you may not have any coverage for out-of-network providers except in emergencies. Medicare Advantage HMOs generally have a primary care physician who directs your care, meaning you will need a referral to see a specialist. With a PPO, you may be able to use out-of-network providers, but you’ll usually have higher copays than you would with in-network providers.

 

Your coverage when traveling

 

Original Medicare. With traditional Medicare, you can go to a doctor anywhere in the United States, as long as the provider accepts Medicare.

 

However, original Medicare generally doesn’t cover medical expenses when you travel outside the U.S. You can buy a supplemental Medigap policy to cover some of the costs of a foreign travel emergency.

 

Medicare Advantage. These plans have networks of providers usually based in a specific geographic area. The average Medicare beneficiary has a choice of 39 plans, but your options may be limited in some rural areas. A few spots, including some cities, have no plans available.

 

So if you travel frequently or have a vacation home where you spend a lot of time, you may not find providers in your network. If you see an out-of-network provider, your care may not be covered, or you may have to pay more. However, if you’re traveling within the U.S., emergency and some urgent care are covered.

 

Most Medicare Advantage plans don’t cover health care abroad, although some have limited coverage for emergency care outside the U.S.

 

 

Your options for additional coverage

 

Original Medicare. To receive full coverage through original Medicare, you’ll likely have to enroll in four separate plans: Part A, which covers hospitalization; Part B, which covers doctor visits and outpatient services; a Part D prescription drug plan; and Medicare supplement insurance, better known as Medigap, which can help you pay for deductibles and copayments. Most people who have original Medicare coverage buy a Medigap policy if they don’t have supplemental coverage through a retiree health plan or other source.  

 

Medicare Advantage. This option combines parts A and B of original Medicare in one plan. In addition, almost 9 out of 10 of these plans also cover prescription drugs. If you choose one of those, you won’t have to enroll in a separate Part D plan.

 

Some of the plans also provide dental, hearing and vision coverage, services that you would have to pay for yourself with traditional Medicare or look at separate private insurance policies. Although Medicare Advantage plans are required to cover the same services as original Medicare, you may have different deductibles and copayments and fewer out-of-pocket costs.

 

If you select a Medicare Advantage plan, you’re not allowed to purchase a Medigap policy.

 

Your expenses

 

Original Medicare. The federal government sets the premium, deductible and coinsurance amounts for parts A and B. For example, most people pay $170.10 a month for the Part B premium, and they’re generally responsible for a $233 yearly deductible and 20 percent of the cost of doctor visits, lab tests and other outpatient services.

 

Most people don’t have to pay a premium for Part A hospitalization. But they do have to pay a $1,556 deductible for each benefit period they use, which could amount to more than one period in a year if you face several hospitalizations, and a $389 daily copayment for days 61 to 90 in the hospital per benefit period.

 

The government also sets maximum deductibles for the Part D prescription drug program. In 2022, Part D deductibles can’t be greater than $480, but plans can have lower or no deductibles. The premiums and cost sharing vary by plan.

 

Many people who elect original Medicare also purchase a Medigap supplemental policy to help defray many out-of-pocket costs, such as deductibles and coinsurance. Private insurers sell these policies, and the premiums vary.

 

Medicare Advantage. Enrollees must pay the Part B premium, which is $170.10 a month in 2022 for most people, as well as any Part A premiums if they aren’t eligible for free coverage. They may have to pay a monthly Medicare Advantage premium, too, although many plans don’t charge additional premiums. Enrollees typically are required to pay copayments for a hospital stay and copayments or coinsurance for Part B services, such as doctor visits and X-rays.

 

Medicare Advantage plans have an annual cap on out-of-pocket expenses, which include deductibles and copayments but not premiums. In 2022, the limit is $7,550 for in-network services although some plans have lower caps. If you choose a Medicare Advantage PPO, the limit is $11,300 for using a combination of in- and out-of-network sevices.

 

The Centers for Medicare & Medicaid Services’ tools can help you compare your estimated out-of-pocket expenses for various Medicare coverage options. Start by entering your zip code into the Your Medicare Options tool. For a list of Medicare options in your area, use Medicare’s Plan Finder tool.

 

ORIGINAL MEDICARE VS. MEDICARE ADVANTAGE AT A GLANCE

You may pay more in total for the flexibility of being able to keep your doctors or keep up with health care appointments when you spend a few months away from home. You have to decide what's important to you.

 

  Original Medicare Medicare Advantage
Doctors and hospitals Any that accept Medicare patients Those in a plan's network, sometimes out-of-network services allowed for extra fees
Specialists No referral needed HMOs often require referral from primary care physician
Coverage area Nationwide Limited to plan's area, except for emergencies
Supplemental insurance Medigap policy available to buy Not available
Prescription drugs Never included, but Part D plan available to buy Almost 9 of 10 plans include prescription drug coverage with cost sharing
Costs

 

Part A: Free for most
Part A deductible: $1,556 per benefit period
Part A copayment: $389 a day for days 61 to 90 in a hospital, $778 a day for 60 lifetime reserve days after
Part B: $170.10 a month for most
Part B deductible: $233 a year
Coinsurance: 20 percent of most services
Part D premium: $7 to $99 a month in 2022
Part D deductible: Zero to $480 a year
Part D cost sharing: Varies by drug tier and plan
Medigap premium: Varies by insurer, policy type and pricing method

 

Part A: Free for most
Part B: $170.10 a month
for most
Plan premium: Zero to more than $100 a month
Deductible: Most enrollees don't pay a deductible for in-network medical services covered under parts A and B. Among those who do, the average in-network deductible is $817. There's often a separate deductible for prescriptions.
Copayments: Zero to $50 typically charged each time you see a doctor, access a covered service or buy prescription drugs. You'll usually pay a copayment for the first few days of a hospital stay, such as $325 per day for days 1 through 5.
Coinsurance: Can be 20 percent of covered services and medications
Out-of-pocket limit No limit, but buying a Medigap policy can help cover those bills

In-network: $7,550

In- and out-of-network combined: $11,300

Some plans have lower out-of-pocket limits.

Sources: Medicare, Kaiser Family Foundation and AARP research

 

3. Costs and Coverage
5 Questions to Consider When Choosing Coverage