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Lower monthly premiums may look appealing, but understanding the trade-offs can help you avoid unexpected costs and protect access to care.
Medicare open enrollment runs Oct. 15 through Dec. 7, giving adults age 65 and older an opportunity to review their coverage, switch between Original Medicare and Medicare Advantage, or change prescription drug plans. Before making a decision, it’s important to understand how these options differ.
Original Medicare includes Part A, which covers inpatient hospital care and certain skilled nursing services, and Part B, which covers physician services and other outpatient care. Beneficiaries can generally see any provider who accepts Medicare, offering broad access to hospitals and physicians nationwide. Because Original Medicare has no annual out-of-pocket maximum, many beneficiaries purchase supplemental Medigap coverage and a separate Part D prescription drug plan to help manage costs.
Medicare Advantage, also known as Part C, provides Medicare Part A and Part B benefits through private insurance plans. Many plans include prescription drug coverage and additional benefits, such as dental, vision and hearing services. They also have an annual out-of-pocket maximum for covered Part A and Part B services. Some plans offer low or $0 additional monthly premiums, but beneficiaries must generally continue paying their Medicare Part B premium.
Those benefits come with trade-offs. Medicare Advantage plans typically have more limited provider networks and may require referrals or prior authorization for certain treatments and services, including hospital stays and skilled nursing care. When care is denied, beneficiaries may face delays and must navigate the appeals process. A lower monthly premium does not necessarily mean lower overall costs.
Rural residents should take extra care when comparing plans. Limited participation by local hospitals, physicians and specialists can make it harder to find in-network care close to home, potentially requiring longer trips for treatment or rehabilitation.
Before choosing a plan, do your homework
During open enrollment, take these steps to make an informed decision:
- Check your providers. Contact your preferred doctors, hospitals and specialists to confirm whether they accept the plan you’re considering.
- Compare total costs. Look beyond monthly premiums to deductibles, copayments, coinsurance, prescription drug costs and the annual out-of-pocket maximum.
- Review your medications. Make sure your prescriptions are covered, understand any restrictions and confirm that your preferred pharmacy is in network.
- Understand approval requirements. Ask whether referrals or prior authorization are required for hospital stays, specialist visits, rehabilitation and other services you may need.
- Consider future health needs and travel. Determine whether the plan provides access to specialized care, coverage when traveling and convenient options if your health changes.
- Review next year’s changes. If you’re already enrolled in Medicare Advantage or a Part D plan, read your Annual Notice of Change to understand updates to costs, benefits and provider networks.
- Understand your Medigap options. If you’re considering switching from Original Medicare to Medicare Advantage, learn about your rights to purchase supplemental coverage if you later return to Original Medicare. You may not be guaranteed the ability to buy the policy you want.
Your local hospital and health care providers may be able to help you understand coverage differences and identify questions to ask when comparing plans.
The bottom line: The lowest monthly premium isn’t always the best value. Take time to compare costs, provider access and coverage rules so you can choose a plan that fits your health needs and budget.
