When you qualify for Medicare, you might decide that the plan that is best for you is a Medicare Advantage plan. This is a plan that offers most of the perks of Medicare, but with added benefits. Most of these plans include prescription drug coverage. Therefore, you’ll be able to get your health insurance and your prescription drug coverage in one place. Take a look at some of the costs and structures that might differ between Advantage plans.
What’s a Medicare Advantage Plan
The Medicare that the U.S. government created over 50 years ago is today professionally called Original Medicare. That’s because, in addition to Original Medicare, there are various other Medicare plans on the market. Private insurers offer many of these plans under the name of Medicare Advantage.
To qualify for a Medicare Advantage plan, you must first enroll in Original Medicare, which offers two distinct types of coverage:
- Original Medicare Part A: This coverage pays for hospital expenses, such as surgeries, inpatient costs and related expenses.
- Original Medicare Part B: You use this coverage to pay for expenses that you might incur during outpatient medical care. It can cover your checkups, lab testing, certain outpatient imaging and other similar costs.
However, what neither plan will cover is prescription drug costs. Many Americans choose to buy their prescription drug coverage through a Medicare Advantage plan.
Medicare Advantage plans are sometimes called Part C plans. They cover all of the costs of Medicare Part A & Part B, with only a couple of exceptions. However, they also allow the policyholder to enroll in other coverage, usually including prescription drug coverage.
Prescription Coverage Under the Plan
On one hand, different federal regulations require that Medicare Advantage plans offer certain benefits. However, beyond those regulations, Advantage plans can differ among themselves.
- Each plan will include a formulary that lists and explains which prescription drugs it will cover. Usually, the plan will offer at least two choices of the same type of medications. For example, you’ll usually be able to choose between two blood pressure medications, and so on. These formularies can change.
- Plans will separate drugs into tiers. The most-expensive drugs will go into the highest tiers.
- Depending on your plan, your out-of-pocket costs for drugs will vary. Two plans might cover the same drug, but the costs might vary between plans.
Talk to your insurer about the costs of your Medicare Advantage plan, and the drugs covered within your prescription plan. That way, you can choose the most-appropriate plan for your own needs. You can ensure that you get the best balance of your premiums and out-of-pocket obligations.