Understanding The Differences Between Medicare Plans

The choices for Medicare coverage are more numerous than ever before.

“For anyone considering Medicare and related products, it’s important to compare all your options and decide what’s best for you,” said Brad Meyer, Director of Consumer Sales at Avera Health Plans. “One of the best ways to make an informed decision is to sit down with a knowledgeable agent who knows all the ins and outs of Medicare coverage,” Meyer said.

Original Medicare Plus Medicare Supplement

Original Medicare includes Part A for hospitalization; Part B for expenses like outpatient surgery, clinic visits, diagnostic imaging, therapy and more; and Part D for prescription drugs.

Medicare Supplement Plans (also known as Medigap policies) are necessary to cover the gaps that Medicare doesn’t pay, including deductibles and coinsurance.

What costs could you potentially incur with Medicare? Medicare Part A includes a deductible per inpatient hospital benefit period of $1,632 in 2024. You can have more than one inpatient hospital benefit period in a year if you have multiple hospitalizations. After the deductible, Medicare covers 100% of costs for the first 60 days of hospitalization. After 60 days, there is a daily coinsurance amount.

Medicare Part B pays 80% of outpatient and professional expenses, and you are responsible for the remaining 20%. There’s also no cap on out-of-pocket costs.

If you don’t have Medicare Supplement, you could be responsible for the Medicare Part A deductible (one or more payments of $1,632), plus coinsurance if you are hospitalized longer than 60 days, plus 20% of costs covered by Medicare Part B, like outpatient surgery. For example, if Part B costs mount up to $100,000, your out-of-pocket responsibility would be $20,000.

“These costs can add up quickly. For people on Original Medicare, a Medicare Supplement plan protects their personal finances if or when they have a major health event,” Meyer said.

Why Consider a Medicare Supplement

“Original Medicare plus a Medicare Supplement is a predictable way to budget for health care expenses, especially for people who have need for frequent health care or who do not have savings set aside for health care expenses,” Meyer said. “It’s a budget-friendly option that helps you plan ahead for what you’re likely to pay for health care for the entire year – reducing your worries for unexpected out-of-pocket costs.”

Most people don’t pay a monthly premium for Medicare Part A. The standard monthly premium for Medicare Part B enrollees will be $174.70 for 2024. The annual deductible for Medicare Part B is $240 in 2024. Medicare Part D premiums vary depending on the plan you select as well as your income. Medicare Supplement plans range in price from less than $100 per month to over $600, depending on your age and the type of plan you select.

“A general rule of thumb is with Original Medicare plus Medicare Supplement, you will have consistent and predictable monthly payments that help with budgeting. If you have a health event, your out-of-pocket cost is likely to be lower. In fact, there are plans to choose from that would result in very minimal out-of-pocket costs,” Meyer said.

Understanding Medicare Advantage

Medicare Advantage (also known as Part C) is a Medicare-approved plan from a private company that offers an alternative to Original Medicare. These plans bundle Part A, Part B and usually Part D.

“Medicare Advantage offers a different way to get Medicare coverage,” Meyer said.

MA plans act more like a typical health insurance plan with an annual deductible, co-pays and coinsurance. MA plans may have low premiums. “Yet your out-of-pocket costs might be higher, depending on the deductible and/or coinsurance you choose,” Meyer said.

For MA coverage, the yearly out-of-pocket limit for 2024 is $8,850 for in-network services.

“Companies from across the country sell Medicare Advantage plans. We recommend working with a local agent to ensure you get the right plan for your needs,” Meyer said.

Enrollment Periods When You Can Make a Change

Around the time you turn 65 or when you sign up for Medicare Part B, there’s a seven-month enrollment period for you to make these decisions (three months before and three months after your birthday month). During this initial enrollment period, you can buy any Medicare Supplement plan sold in your state and you can’t be denied coverage due to pre-existing health conditions. After age 65, there are annual enrollment periods when you can make a change in coverage:

Oct. 15-Dec. 7, 2024: Medicare annual open enrollment, when you can change your Medicare health or drug coverage for the next year. You can select or switch between options including Medicare Advantage or Original Medicare.

Jan. 1-March 31, 2025: If you're in a Medicare Advantage plan, you can change to a different MA plan or switch to Original Medicare (and join a separate Medicare drug plan) once during this time.

Avera Health Plans Open Enrollment

Avera Health Plans offers open enrollment periods for certain Plan G Medicare Supplement plans. “This is a unique benefit, because you can enroll in Medicare Supplement coverage with no medical questions asked,” Meyer said.

Avera Health Plans’ new AgilityPlus Select Plan G has open enrollment based on the purchaser’s requested policy effective date. Any policy with an effective date between Oct. 1, 2024, to Jan. 1, 2025, will be considered open enrollment.

Open enrollment for Avera Health Plans Traditional Select Plan G is now through Dec. 31, 2024.

Find or contact an Avera Health Plans agent to learn more about Medicare options or call 877-322-4885.

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© 2024 Avera Health Plans, All Rights Reserved. Network restrictions apply with Select plans. A Plan G policy may not cover all of your medical expenses. Neither Avera Health Plans nor its agents are connected with Medicare or state or federal government.