If you’re 65 or older, you can get Medicare coverage and choose from several options: Original Medicare with or without Part D, Medicare Advantage, or Original Medicare with Medigap.

Anyone 65 and older is eligible for Medicare, but you may wonder about the best plan.

While there are several Medicare plan options to choose from, the best plan for you will depend on your medical and financial situation.

Luckily, you can compare the advantages and disadvantages of each Medicare offering to find a plan that works well for you.

Medicare is a government-funded insurance option available to people 65 or older and individuals receiving disability benefits. When you enroll in Medicare, you can choose from various coverage options.

These are Original Medicare (Parts A and B), which cover hospital services and general medical services, respectively, Part D (prescription drug coverage), and Part C (Medicare Advantage).

You also have the option to enroll in Medigap, which can supplement some of your costs.

Original Medicare consists of Medicare Part A and Medicare Part B. For many Americans, this covers most necessary medical expenses. However, Original Medicare doesn’t cover prescription drugs, vision, dental, or other services.

Advantages of Original Medicare

  • Cost-effective: Most Americans don’t have to pay a monthly premium for Part A. In addition, the monthly premium for Medicare Part B starts as low as $174.70 in 2024. Your monthly Medicare costs can be automatically deducted if you receive Social Security payments.
  • Provider freedom: With original Medicare, you can visit any provider that accepts Medicare, including specialists. This means that you may be able to continue seeing your favorite healthcare providers after enrollment.
  • There is nationwide coverage: Original Medicare is accepted all over the United States, which can be especially beneficial for people who travel frequently.

Disadvantages of Original Medicare

  • Lack of additional coverage: Original Medicare only covers hospital and medical services, which can lead to coverage gaps for vision, dental, and other services.
  • No out-of-pocket maximum: Original Medicare has no yearly out-of-pocket maximum cost. If you have frequent medical costs, this can add up quickly.

Roughly 31% of Medicare beneficiaries have a Medicare Advantage plan. While most Advantage plans can cost more upfront, they can also help save money in the long run.

Advantages of Medicare Advantage

  • Cost-effective: Medicare Advantage can help save you money. Research suggests that those enrolled in Advantage plans can save more money on certain healthcare services. In addition, all Part C plans have an out-of-pocket maximum.
  • Plan variety: There are roughly five types of Advantage plan structures to choose from: HMO, PPO, PFFS, SNP, and MSA. Each of these has its own advantages and disadvantages.
  • Coordinated care: If you’re enrolled in a Medicare Advantage plan, you’ll likely benefit from coordinated care from in-network providers.

Disadvantages of Medicare Advantage

  • Additional up-front costs: Unlike original Medicare, the additional costs of an Advantage plan include in-network, out-of-network, and prescription drug deductibles, copays, and coinsurance.
  • Provider limitations: Most Medicare Advantage plans are either HMO or PPO, with some provider limitations. Other plan offers may also come with additional provider limitations.
  • State-specific coverage: Medicare Advantage plans cover you within the state you enrolled, typically the state you live in. This means that if you travel, you may not be covered for out-of-state medical expenses.

Part D offers additional prescription drug coverage for medications not included under Original Medicare. A Medicare Advantage plan can replace Part D, but Part D is a great alternative if you don’t want Medicare Advantage.

Advantages of Medicare Part D

  • Standardized coverage: When you enroll in a Part D plan, each must follow a set amount of coverage defined by Medicare. No matter how much your medications cost, you can rest assured that your plan will cover a set amount.

Disadvantages of Medicare Part D

  • Varied formularies: The prescription drugs covered under Medicare Part D vary by plan. This means you must find a plan that specifically covers your medications. In some cases, you may need to make compromises.
  • Coverage rules: Some prescription restrictions exist under Part D coverage rules. For example, some medications may require prior authorization to be filled, which can be inconvenient if you need the medication immediately.

Medigap is a supplemental private insurance option to help pay for Medicare costs, such as deductibles, copays, and coinsurance.

Medigap isn’t necessarily an alternative to Medicare Advantage but a cost-effective alternative for those who choose not to enroll.

Advantages of Medigap

  • Financial coverage: Medigap is a good supplemental option for anyone who needs additional coverage for medical fees. Medigap kicks in to cover additional costs after Medicare pays its share.
  • Out-of-country coverage: If you add a Medigap policy to your Medicare plan, you’re also covered for out-of-country services. This is beneficial for anyone who likes to travel outside the United States.

Disadvantages of Medigap

  • Single coverage: Medigap is a single-user policy, meaning your spouse won’t be covered. You must enroll in separate Medigap plans if you and your spouserequire supplemental insurance.
  • No additional healthcare benefits: Medigap doesn’t offer additional coverage for prescription drugs, dental, hearing, or vision services. Consider a Medicare Advantage plan if you need more coverage than Original Medicare.

If you’re still unsure about the best Medicare plan for you or a loved one, consider the advantages and disadvantages of each plan.

Here are some important things to consider when choosing the best Medicare plan for you:

  • The type of coverage you already have: Do you have veteran’s benefits or coverage under an employer or spouse’s employer?
  • The type of coverage you need: Are you managing any chronic conditions or know that you’ll need a surgical procedure in the near future?
  • The prescription drugs you take: Do you take several medications each month or specialty drugs?
  • Foreign travel: Do you travel abroad and want emergency coverage overseas?
  • How much can you afford to pay for medical care? What is your income each month? Each year?

If you need help calculating costs for plans in your area, visit Medicare.gov and use their find a plan tool. This can help you compare plan types, costs, coverage, etc.

Important Medicare enrollment deadlines

To ensure that you enroll on time to avoid coverage gaps and late penalties, pay close attention to the following Medicare enrollment periods:

  • Your 65th birthday: You can enroll in Medicare any time within the 3 months before or after your 65th birthday.
  • Six months following your 65th birthday: If you want to enroll in Medigap, you can do so for up to 6 months after your 65th birthday.
  • January 1 to March 31: This is the enrollment period for anyone who didn’t sign up for a Medicare plan when first eligible (although there are penalties for waiting). You can also sign up for a Medicare Advantage plan during this period.
  • April 1 to June 30: If you’re interested in adding Part D to your original Medicare plan, you can enroll at this time. However, it’s important that you enroll in a Part D plan as soon as you’re eligible to avoid a permanent late enrollment penalty.
  • October 15 to December 7: This is the open enrollment period. During this time, you can enroll in, drop, or change your Medicare Part C or Part D plan.
  • Special enrollment period: Under some circumstances, you may qualify for a special enrollment period. During your special enrollment period, you’ll have 8 months to enroll in a plan.

The best Medicare plan covers all necessary medical and financial needs. Each plan option has advantages and disadvantages, from cost-effectiveness to provider limitations.

Whether you choose original Medicare with add-ons or Medicare Advantage, shop around and compare the best Medicare plan for you.