People with Medicare can access their benefits through the Original Medicare plan (with or without a Medigap supplement policy) or through the Medicare Advantage program.
Medicare Advantage plans are considered easiest on the wallet because they have low monthly premiums and cover things Original Medicare does not, like dental visits and eyeglasses.
The prevailing opinion is that this kind of health insurance is a really good value. But like all insurance, one person's best Medicare plan isn't always the best for someone else.
Imagine you're inside a store that sells two insurance products.
One product costs $100 a month. It helps pay for some but not all of the things your primary health insurance doesn't cover, like deductibles and co-insurance. You pay this bill every month no matter how much medical care you need.
The other product costs $0 a month. You get good major medical coverage PLUS extra benefits for which you pay no extra monthly fee. If you need medical care, you will pay your doctor a fixed amount in the form of a co-pay.
You may think to yourself: The $100 product, called a Medicare supplement (or Medigap) insurance policy, is clearly more expensive than the other one, known as Medicare Advantage.
Only a dummy would pay more money for fewer benefits, right?
Insurance decisions are a little like gambling.
In one bet, you'll pay a guaranteed, fixed amount of money every month. There are no co-pays or co-insurance. If you need a lot of care in any given year, you come out ahead. In healthier years, the insurance company wins.
This is called Medicare supplement insurance.
To mix metaphors, this insurance (sometimes called Medigap) is like the buffet option on a restaurant menu. Buy a meal ticket and eat until you're stuffed.
In the other bet, you only pay when you consume care.
Doctor visits and blood tests might cost $20 each. More significant care, like surgery or a hospital stay, will cost more. The healthier you are in a year, the more you come out ahead.
This is called Medicare Advantage insurance. It's like ordering off the a la carte menu at dinner. You only pay for what you eat.
In a bad health year, all those small charges for doctor visits and hospital stays can cost much more than the $100 you'd pay every month for a Medigap plan.
Medicare supplement plans are good for people who need or want financial predictability.
Hate surprises? You can take comfort in knowing exactly what you'll pay for your care each and every year.
That predictability also makes life easier for anyone on a fixed budget. It's easy to manage your cash flow and, because there are no doctor networks, you're free to see any doctor who accepts Medicare.
Better still, Medicare supplement members don't need a referral to see a specialist.
Medicare Advantage plans are ideal for anyone seeking the most possible coverage for the lowest possible price. These policyholders are betting that over time, they won't need as much care as the insurance company predicts.
People with a Medicare Advantage plan are okay with not knowing exactly what they'll pay out of pocket as long as there's a yearly cap on those expenses.
They are also willing to use a doctor network to save even more money.
In most of America, the number of Medicare plan options is overwhelming. Each one has small but important differences that can be hard to notice or understand.
Finding the best Medicare plan is easier with the help of a professional.
Consider working with an independent, licensed insurance agent before choosing your Medicare plan. An insurance agent will explain the options available in your area and help you find the one that best meets your individual needs.
Look for an agent who specializes in senior insurance plans and who represents more than one insurance company. Ask questions and take your time.
Remember: An insurance professional will never use high pressure sales tactics or force you into any specific plan. Never enroll in something you don't understand and always feel free to get a second opinion before making your decision.