As you consider how Medicare can help cover your health care needs, your first decision should be which type of insurance to enroll in: the federally funded Original Medicare plan or a private Medicare Advantage plan. Some aspects of your care will be the same regardless of which plan you choose, but others will be significantly different. Here’s what you should know.
Choosing Between Original Medicare and Medicare Advantage in NJ
If you elect to go with what’s referred to as Original Medicare, you’ll get:
- Part A (hospital insurance)
- Part B (doctor visits/outpatient care insurance)
- Part D (prescription drugs coverage)
If you decide to go with Part C, a Medicare Advantage plan, this will be bundled for you along with Original Medicare Parts A and B.
Let’s take a closer look into these two options and which is best for your needs.
Going to the Doctor
Under Original Medicare, you can choose any providers that accept Medicare. Thankfully, 93 percent of non-pediatric primary care doctors accept Medicare. However, 30 percent of primary care doctors aren’t accepting new Medicare patients, so be sure to check on this before switching doctors.
With Medicare Advantage, things are slightly different depending on whether you have an HMO or PPO. If you go with an HMO plan, be aware that you’ll be limited to a specific network of hospitals and doctors.
Covered Care
Medicare covers most medical needs, except for vision, dental, and hearing. Fortunately, you can pick up a supplemental plan to cover these services. Under Medicare Advantage, you get all the same services as you do with Original Medicare, as well as some coverage for dental, vision, and hearing.
While Medicare Advantage plans do look attractive, there are some pitfalls. For example:
- You must follow specific plan rules to get coverage
- You’re limited on the doctors you can see
- You may have trouble getting emergency care due to rationing
And unfortunately, some private plans aren’t financially stable and may suddenly stop providing coverage.
Costs
With Original Medicare, the federal government sets the premiums, deductibles, and coinsurance for Part A and Part B. For example, you’re responsible for 20 percent of a doctor's visit or lab bill. Many people choose to take out a supplemental plan to help pay these costs.
Medicare Advantage plans work a little differently. You’ll still have to pay the government-set premiums, but instead of paying 20 percent coinsurance, your plan will probably have a set copay amount. This can lead to lower out-of-pocket costs, although not always.
Be aware that some hospitalizations, outpatient services, and medical equipment often cost more under Medicare Advantage plans.
What Our Financial Advisors Recommend for Medicare
While there are some great features to Medicare Advantage plans, we generally don’t recommend them. You’re far more limited in choice, your out-of-pocket costs can quickly add up, and you have to follow specific rules to get covered care.
Your best option is Original Medicare and a supplemental plan that fills in the gaps and helps cover out-of-pocket costs.
