The Different Types of Medicare Plans Explained

What is the best type of Medicare plan?

The best Medicare plans are the ones that fit your needs and budget. Original Medicare covers hospital insurance (Part A) and medical insurance (Part B). Medicare Advantage plans (Part C) are an alternative to Original Medicare, and in addition to covering Part A and Part B, Medicare Advantage plans usually cover prescription drugs, too. If you choose Original Medicare, you may want additional coverage, such as Medicare Prescription Drug coverage (Part D) or Medicare Supplement insurance (Medigap). When considering how to choose Medicare plans, let SelectQuote help—there’s no obligation to enroll.

Types of Medicare Plans: Medicare Advantage Plans

Medicare Advantage plans are offered by private health insurance companies that are approved by Medicare, and in addition to covering hospital (Part A) and medical insurance (Part B), many Medicare Advantage plans also include prescription drug coverage. Some Medicare Advantage plans also include additional benefits, such as routine dental, vision, hearing and fitness memberships.

If you decide to purchase a Medicare Advantage plan, you may have to pay a monthly premium, but some plans can be as low as $0/month.* Some plans require a deductible while others do not—copayments and coinsurance can vary greatly with Medicare Advantage plans. For example, one plan may charge you a 20% coinsurance to see a primary care doctor and another may charge you $0. When considering a Medicare Advantage plan, it’s important to consider all of the available plans in your area to ensure you get the right plan for your needs.

Types of Medicare Plans: Medicare Prescription Drug Plans

Prescription medications you take at home are not typically covered by Original Medicare. And if you are wanting prescription drug coverage through a Medicare plan, you have two options:

1. Enroll in a stand-alone Medicare Part D plan (Prescription Drug plan) that works alongside Original Medicare
2. Choose a Medicare Advantage plan that also includes prescription drug coverage

As you consider a Medicare prescription drug plan, pay attention to the formulary—a list of covered prescription drugs. If you are already taking prescription medications, be sure to check that your prescription is covered before you sign up for a plan. Medicare Part D plans may include both brand name and generic prescription drugs. Medicare drug plans generally need to include at least two drugs in the most commonly prescribed categories and classes, but plans can choose which drugs are covered and which ones aren’t.

In terms of monthly costs, most Medicare prescription drug plans charge a monthly premium. You’ll need to pay this in addition to the Medicare Part B premium. If you join a Medicare Advantage plan (Part C) that includes Medicare prescription drug coverage, the plan’s monthly premium may include an amount for drug coverage. Deductibles vary between Medicare drug plans and Medicare prescription drug plans may also have a copayment or coinsurance.

Types of Medicare Plans: Medicare Supplement Plans (Medigap)

Medicare Supplement insurance plans, also commonly referred to as Medigap plans, help with gaps in coverage from Medicare Parts A and B, including copayments, coinsurance, and deductibles. Medicare Supplement plans generally cover Medicare Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are exhausted. Additionally, they generally cover:

• At least 50% of Medicare Part B coinsurance or copayment
• The first three pints of blood received in a medical procedure
• Part A hospice care coinsurance or copayment

Your Medicare Supplement insurance plan (Medigap Insurance) may or may not cover all or part of:

• The skilled nursing facility care coinsurance
• Medicare Part A deductible
• Medicare Part B deductible
• Medicare Part B excess charges
• Foreign travel emergencies up to plan limits

In terms of cost for Medicare Supplement insurance plans, most have a monthly premium that’s set by the private insurance companies who offer these plans. The premiums are based on age, health status, gender and various other factors. Unfortunately, you must pay the premium even if you do not use any medical services. Only Medicare Supplement Plan K and Plan L have an out-of-pocket maximum.