Sharon O’Day has enjoyed a long career in international finance, market research, and communication. For the past five years, Sharon has been a sought-after content writer for many projects to educate her peers by making complicated healthcare topics easy to understand.
Updated on June 18th, 2024
Diane Omdahl has been helping people navigate the complexities of Medicare for more than three decades. She is a nationally recognized Medicare expert, a registered nurse, serial entrepreneur, and has served as a technical expert for the Centers for Medicare and Medicaid Services (the organization that runs the Medicare program). She is a frequent speaker on Medicare-related issues. She has been featured in many national publications, including the Washington Post, CBS MoneyWatch, Forbes, The Wall Street Journal Market Watch, Kiplinger, and many more. Her most recent startup, 65 Incorporated, helps people 65 and older get the clear, correct, complete, and credible information they need to make important Medicare decisions. She is also the architect behind the i65 Medicare optimization software suite. i65 enables financial advisors to help clients make smart Medicare decisions.
We aim to help you make informed healthcare decisions. While this post may contain links to lead generation forms, this won’t influence our writing. We follow strict editorial standards to give you the most accurate and unbiased information.
Explaining the Medicare Coverage Gap.
Additional plan options outside of Original Medicare (Parts A and B) coverage help limit unexpected healthcare costs. Your health at 65 might not predict future needs, and medical bills can quickly add up. This can be especially challenging on a fixed income, making supplemental insurance a valuable option.
At 65, your primary decision is between Original Medicare and Medicare Advantage (Part C). Original Medicare covers most hospital and doctor expenses but does not include prescription drugs (which can be added with Medicare Part D). It offers flexibility with no network restrictions or referral requirements. However, there is no cap on out-of-pocket costs.
Medicare Advantage bundles hospital, doctor, and often drug coverage. It caps out-of-pocket expenses but restricts you to a network and usually requires referrals for specialists. It may also include dental and vision coverage.
Original Medicare doesn’t cover all costs. Medicare Supplement (also known as Medigap) helps manage out-of-pocket expenses like copayments, coinsurance, and deductibles. Offered by independent insurance companies, these policies supplement Original Medicare but do not add new coverage.
Medicare Supplement plans work with Original Medicare to limit your exposure to unexpected medical costs. You decide the level of coverage and premium you prefer. To buy a policy, you must be enrolled in Medicare Part A and B. Medicare handles billing and claims with your insurance provider, simplifying the process.
The federal government standardizes Medicare Supplement plans, ensuring consistent coverage regardless of the insurer. There are ten plans (A through N), but C and F are no longer available to new beneficiaries. Each plan covers different out-of-pocket costs, such as:
These plans do not extend coverage beyond Original Medicare. They don’t cover dental, vision, hearing aids, private-duty nursing, or long-term care. Prescription drugs are not covered unless you have a separate Medicare Part D plan. Some plans cover foreign travel emergencies.
Original Medicare offers broad acceptance and no network restrictions, but to minimize out-of-pocket costs, a Medicare Supplement policy is beneficial. It ensures predictable expenses and comprehensive coverage.
The Open Enrollment Period lasts six months, starting when you are 65 or older and enrolled in Medicare Part B. During this time, you can’t be denied coverage or charged more due to medical conditions. Outside this period, you may face underwriting, potentially leading to higher costs or denial of coverage
You can buy a Medicare Supplement policy from any licensed insurer in your state. However, you can’t have both a Medicare Supplement policy and a Medicare Advantage plan. Availability varies by state.
Original Medicare may not be the cheapest option, but it offers freedom in choosing healthcare providers. Adding Medicare Supplement to Original Medicare provides predictable out-of-pocket costs and comprehensive coverage. Medicare Advantage offers bundled services but comes with network restrictions and capped out-of-pocket costs. Assess your healthcare needs and financial situation to decide the best option for you.
See your options to find savings.