Frank is retired and receiving Social Security benefits. He’s healthy, and other than his annual medical checkups, he doesn’t see a doctor very often or take any medications.
He doesn’t travel much, and he’s looking for the least expensive way to get coverage in case he develops any medical conditions. He wouldn’t mind switching doctors if he can save money by doing so.
Frank’s decision: Medicare Advantage
Since Frank is already receiving Social Security benefits, he’ll be enrolled automatically in parts A and B of Medicare and his Medicare coverage will start the first day of the month he turns 65. He won't need to pay the Part A premium. He chooses a Medicare Advantage plan that doesn’t charge a monthly premium, has no annual deductible and has prescription drug coverage. The plan doesn’t cover out-of-network providers and hospitals, but he finds a new doctor nearby. He won't have to pay a copay for preventive care or visits to his primary care doctor. His costs:
- $148.50 monthly premium for Part B
- $40 copay for specialist visits, plus copays for other medical services and procedures, such as lab visits, physical therapy, urgent care and X-rays
- $325 annual deductible before the plan starts paying for any occasional prescription
- $325 daily copayment for days 1 through 5 as an inpatient in the hospital. No charge for days 6 through 90.
- $5,900 annual out-of-pocket maximum for in-network health services in 2021 for the plan he chose, not including premiums or prescription drug costs. So he won’t be responsible for any charges beyond that amount for services in his plan’s network.
If Frank develops any health problems and needs regular prescription medications — or if he wants to start seeing a doctor who isn’t covered under his current plan — he can reevaluate his Medicare Advantage options or switch to traditional Medicare during the annual open enrollment period, which runs from Oct. 15 to Dec. 7. A switch to another plan would start Jan. 1. Or he could swap Medicare Advantage plans during the other open enrollment period, which runs from Jan. 1 to March 31.
Switching to traditional Medicare after being in a Medicare Advantage plan could be more difficult for him if he also wants to buy a private Medigap policy. If more than six months have passed since Frank enrolled in Part B, Medigap companies could charge him more or reject him for any medical conditions he developed before he decided to switch.