The two main options for hospital and medical coverage are Original Medicare (Parts A & B), provided by the federal government, or Medicare Advantage (Part C), approved by the government but sold through private insurers. If you opt for Original Medicare, you can fill coverage gaps and help your lower out-of-pockets costs by adding a Prescription Drug Plan (Part D) and/or a Medicare Supplement plan (Medigap).
Original Medicare (Parts A & B) helps cover hospital and medical expenses but doesn't include prescription drug coverage, dental and vision care, and some other common health services. Many people like to consider other options to expand their coverage or help them pay out-of-pocket costs, including deductibles and co-pays.
What are the other options to consider?
- Medicare Advantage plans (Part C), which are approved by the federal government but sold through private insurers, replace Original Medicare. They are required to offer at least the same benefits, typically also include drug coverage, and often provide more, such as coverage for dental and vision care.
- Prescription Drug Plans (Part D) help with prescription drug coverage for anyone with Original Medicare.
- Medicare Supplement Insurance (Medigap) can help reduce your out-of-pocket costs and, depending on the policy, fill in some of the coverage gaps left by Original Medicare.
Mixing and matching
Many of the options can be combined together to provide the most coverage. One important rule to know: You are not allowed to have both Medicare Advantage and a Medicare Supplement plan.
Here are some of the combinations available to you:
- Original Medicare (Parts A & B). This is the basic hospital-and-medical coverage option available from the government, with no additional benefits.
- Original Medicare (Parts A & B) + Prescription Drug Plan. This combination adds coverage for your prescribed medicines but does not include common healthcare services that Original Medicare (Parts A & B) doesn't cover, such as dental and vision care. Your out-of-pocket costs for medical coverage in this combo: Part B pays for approximately 80% of the costs; you are on the hook for the remaining 20%.
- Medicare Advantage. In addition to providing the same hospital and medical benefits as Original Medicare's Parts A and B, most Medicare Advantage plans include prescription drug coverage (often referred to as Medicare Advantage Prescription Drug plans or MAPD), and many cover other healthcare services as well.
- Original Medicare (Parts A & B) + Medicare Supplement plan. Adding a Medicare Supplement plan can help lower your overall costs and fill some coverage gaps in Original Medicare. There are many different Medicare Supplement plans to choose from, each labeled with a letter of the alphabet and with different levels of benefits. Prescription drug coverage is not included.
- Original Medicare (Parts A & B) + Medicare Supplement + Prescription Drug. This combination offers the broadest coverage under the Original Medicare program.
There are also less common Special Needs Plans and other coverage options that you may qualify for.