What Medicare Options Are Right for You?

If you qualify for Medicare, some of the choices you need to think about include:

  • Whether you want Original Medicare or a Medicare Advantage plan.
  • If you want Original Medicare, which Part D prescription drug plan to sign up for (if any), whether to decline Part B, and whether to sign up for a Medigap policy.
  • If you want Medicare Advantage, which plan to choose.

People make these choices when Medicare coverage starts, but can change their minds and their Medicare coverage at certain times.

Comparing Original Medicare and Medicare Advantage

To understand what Medicare options are right for you, it’s important to get a sense of how Original Medicare and Medicare Advantage work.

Note: Medicare Advantage is sometimes called Medicare Part C.

With Original Medicare:
  • Part A helps pay for hospitalization. Most people do not pay a monthly premium for Part A.
  • Part B helps pay for outpatient medical care, like when you go to the doctor’s office. Most people pay a $135.50 monthly premium for Part B (or a bit less).
  • Private Part D plans help pay for prescription drugs for people with Original Medicare coverage. You have to pay an extra monthly premium for Part D and the amount depends on which Part D plan you get.
  • Private Medigap policies cover some expenses that Original Medicare does cover. You have to pay an extra monthly premium for these policies, also called Medicare Supplement Insurance. In Arizona, you cannot get a Medigap policy if you are under age 65.
  • You can visit any doctor or hospital who accepts Medicare payments.
With Medicare Advantage:
  • A private company offers a policy that combines the benefits offered by Part A, Part B, Part D, and Medigap policies into a single plan.
  • There are many plans to choose from in most counties.
  • The exact benefits and the cost of those benefits depend on the plan you choose.
  • You may be restricted to certain hospitals or networks of doctors.
  • There is a $6,700 out-of-pocket maximum each year for expenses besides the premium.
Summary of Differences

Original Medicare

Medicare Advantage

Run by

The federal government

Private companies

Medical providers

Any who accept Medicare

May be a limited provider network

Costs

Based on Medicare’s rules

Depends on the plan; has a $6,700 annual out-of-pocket maximum

Services covered

Everything Part A and Part B cover

At least everything Original Medicare covers

Additional Benefits

Not included

May be included with plan

Drug Coverage

With a separate Part D policy

May be included with plan or through a separate Part D policy

Advantages

More service providers to choose from

Usually lower cost

The bottom line: Both Original Medicare and Medicare Advantage have advantages and are good ways to get Medicare benefits. In Arizona, 62% of Medicare beneficiaries choose Original Medicare and 38% choose Medicare Advantage.

How Other Coverage Can Affect Your Medicare Choices

Having another form of health coverage, such as employer-sponsored coverage or AHCCCS, is one of the biggest factors that can affect how you should get Medicare. Answer these questions to see how they might affect your Medicare choices.

If you need to talk with someone about these questions, call the Arizona State Health Insurance Assistance Program (SHIP) at 1-800-432-4040.

Do You Have Private Coverage That Covers What Parts B and D Cover?

If you get employer-sponsored coverage that covers what Medicare Parts B and D cover, you may want to opt out of Parts B and D, so that you don’t have to pay their premiums. (You still have Part A coverage, which usually has no premium.)

However, you might have to pay monthly penalties if you opt out and want Parts B and D later:

Note: If your income is below certain levels, you may qualify for a Medicare Savings Program, which would pay your Part B premium, and the Low Income Subsidy (LIS), which would pay your Part D premium. Look into these before you opt out of any parts of Medicare.

The bottom line: Don’t opt out of any Medicare coverage without carefully researching your options. If you decline Part B, you cannot sign up for Medicare Advantage either. If you have any questions, contact the Arizona State Health Insurance Assistance Program (SHIP).

Do You Also Have AHCCCS Coverage?

People who qualify for both Medicare and AHCCCS coverage are called “dual eligibles.” Most dual eligibles do not have to pay Medicare premiums, because either AHCCCS pays them or because the person also qualifies for a Medicare Savings Program. AHCCCS, including AHCCCS Freedom to Work, may also help pay for Medicare co-insurance and deductibles, as well as some services Medicare doesn’t cover. That’s why you shouldn’t decline Medicare Parts B or D if you also qualify for AHCCCS.

If you qualify for both Medicare and AHCCCS, there are different ways to get your medical coverage:

  • You can have separate Original Medicare and AHCCCS coverage. This gives you more flexibility to choose your medical providers, but some may not accept AHCCCS or Medicare as payment, which could mean you have to pay more.
  • You can have a Medicare Advantage plan with separate AHCCCS coverage. This can be a problem if you have a AHCCCS managed care plan with a different provider network than your Medicare Advantage network.
  • You can have a Medicare Advantage plan that is integrated with AHCCCS coverage. These are called Dual Special Needs Plans (D-SNPs). With a D-SNP, there’s less paperwork (you only have one insurance card) and you don’t have to worry so much about which of your benefits pays for which medical services.

The bottom line: If you like your AHCCCS managed care program, signing up for its D-SNP could make it easier for you to deal with your combined health coverage and may let you get additional benefits that Medicare doesn’t usually offer, such as dental, vision, and hearing aid coverage. However, if you want more flexibility than a managed care program, look into Original Medicare.

If you have Medicare and another insurance at the same time

If you have more than one type of coverage, including AHCCCS, employer-sponsored coverage, Veterans (VA) health benefits, military (TRICARE) benefits, or any other health coverage, one coverage may pay for costs that your other coverage doesn't pay for, meaning you have to pay less out of your own pocket. If you are in this situation, make sure you understand how Medicare interacts with other types of coverage.

Is Medicare Your Only Health Coverage?

If you do not have any private health insurance, don’t qualify for AHCCCS, and don’t have any other medical coverage besides Medicare, then you need to make sure that your Medicare coverage will be enough for all of your health needs.

If Medicare is your only health coverage:

  • Do not decline Parts B and D. They provide coverage you need, since you don’t have any other insurance that will pay for those medical expenses. Furthermore, if you turn them down, you have to pay a penalty if you want them later.
  • See whether you would prefer a Medicare Advantage plan. Medicare Advantage plans have to offer at least the benefits that Original Medicare offers, but some Medicare Advantage plans might also offer coverage for things that Original Medicare doesn’t cover. Use the Medicare Plan Finder to see if there’s a Medicare Advantage plan that meets your needs.
  • If you don’t want Medicare Advantage and are 65 or older, think about a Medigap policy (Medicare Supplement Insurance). If you are a senior and get Original Medicare, you can pay an extra monthly premium to get a private Medigap policy that covers some of the expenses that Medicare Parts A and B won’t cover, such as co-insurance, copayments, and deductibles. Learn more about Medigap policies or find one in your area.

The bottom line: If you don’t have other coverage, make sure that your Medicare coverage meets your needs.