When, Why, and How to choose a plan that's right for you
(especially if you're already enrolled).
Whether you’re looking into Medicare for the first time, or taking advantage of annual enrollment to update your strategy, we’ve broken down the critical choices you must make into a simple decision-making tool (including the easy-to-understand questions you MUST ask yourself before choosing a plan).
Getting the answers wrong can cost you big-time! Not only is health care likely to be your largest expense in your retirement (potentially $315,000 or more), but nearly every American over age 65 must eventually enroll in Medicare.
Making the wrong choices could cost you thousands in permanent penalties, leave you facing high medical bills without coverage, or force you into a too-expensive plan.
In this blog, we’ll walk you step-by-step through a simple set of questions to help you choose a Medicare plan. By virtue of its simplicity, this decision-making tool leaves out most of the nitty gritty.
When to enroll
Do I need to enroll in Medicare? Key questions to help guide your decision:
Are you at least 65? Unless you qualify for disability, you typically don’t qualify for Medicare until age 65 with limited exception.
Are you covered by employer-sponsored or retiree health insurance? If so, and your employer has at least 20 employees, you may not need to enroll in Medicare yet.
Do you qualify for VA benefits or TriCare? If so, you may still need to enroll in Medicare Part B because VA and Medicare benefits do not overlap.
Warning! If you are eligible for Medicare coverage and are not covered by qualifying insurance, you should consider enrolling in Medicare ASAP to avoid late enrollment penalties and higher premium costs.
Now, let’s talk about which Medicare strategy might be right for you…
Why choose a medicare plan?
What Medicare plan is right for me?
Choosing a Medicare plan means balancing priorities and knowing what’s most important to you. Remember — there are no right or wrong answers to these questions.
Choosing between A +B & C (Advantage)
Which sounds like you?
- I already have doctors and specialists, and don’t want to switch.
- I travel away from home and want coverage that spans the entire United States.
- I value the freedom to visit almost any doctor, hospital, and medical provider that accepts Medicare…
You Should Consider Original Medicare Part A (Hospital Insurance) + Part B (Medical Insurance)
- I don’t mind going through a primary care physician to see specialists…
- I stay close to home and can find a doctor within my network…
- I value simplicity and don’t want to manage multiple insurance plans…
You Should Consider a Medicare Advantage Plan (Part C)
Part A covers hospitals, rehab, and hospice care, whereas Part B covers doctor visits, lab tests, screenings, and other outpatient services. While Part A is free for most people, you’ll pay monthly premiums for Part B plus deductibles, copays, and coinsurance.
Pros: You have the freedom to visit any provider or hospital in the U.S. that participates in Medicare and don’t need to work with a primary care physician to see specialists. This flexibility is ideal if you travel outside of your home network or have existing relationships with doctors you want to keep.
Cons: Services have deductibles and copays, which may require you to purchase a Medigap or Medicare Supplement Plan to control your out-of-pocket spending. You will also need to purchase prescription drug coverage (Medicare Part D) separately.
Offered through private insurers, Part C is often structured like an HMO or PPO and provides comprehensive health coverage combining Parts A and B.
Pros: Many Part C plans cover extra services like vision, hearing, and dental and may include prescription drug coverage. Plans have an annual limit on your total out-of-pocket costs.
Cons: While premiums can appear quite favorable (some as low as $0), Advantage plans utilize co-pays, co-insurance, and deductibles, which can quickly override any premium savings. Also, the fact that these plans utilize networks based on your zip code can create issues for seniors who intend to travel or are “snowbirds.” Even if remaining local, it’s wise to find out ahead of time if your preferred doctor, hospital, and pharmacy will accept the Advantage Plans you’re considering. Performing a provider search on the plan’s site will help narrow your options by showing compatibility of existing preferences.
Now, let's talk about any prescription drug coverage you may need...
Choosing Original Medicare (Parts A + B)?
Since it doesn’t cover prescription drugs, you automatically need Medicare Part D.
You’ll need to sign up as soon as you become eligible for Medicare, even if you don’t use prescription drugs, to avoid paying late enrollment penalties.
Pros: Copays, deductibles, and other plan details vary by state and insurer, but they will cover most of the cost of your prescriptions. There are often benefits in choosing generic options over brand names. You pay no more than 25% of the cost, which will be in the form of co-pays, co-insurance.
Cons: At a certain point you will reach a coverage gap, where you’ll continue to pay 25% for both generic and brand named drugs, but keep in mind 25% may be more than what you were paying as a fixed co-pay prior to reaching the gap. The remaining 75% is largely covered by a manufacture’s discount. What you pay + the manufacture’s discount goes toward meeting your catastrophic threshold ($8,000 for 2024). Once this threshold is met, you’ll no longer be responsible to pay toward prescriptions for the remainder of the year.
For more information on how Medicare enrollee prescription costs are calculated, please refer to this piece from KFF: Changes to Medicare Part D in 2024 and 2025 Under the Inflation Reduction Act and How Enrollees Will Benefit
Let's see if you need supplemental insurance to lower your out-of-pocket costs.
Do you have retiree coverage through the military or a private company?
81% of Original Medicare participants had some type of supplemental coverage.
If not, you may want to consider a Medicare Supplement Plan or Medigap.
What is it? Private insurance that fills the coverage gaps in Parts A and B of Medicare and helps with deductibles, copays, coinsurance, etc.
Pros: It limits your out-of-pocket costs for Original Medicare.
Cons: There are many different types of Medigap plans, all with different details.
Choosing a Medicare Advantage Plan (Part C)?
You’ll need to determine whether prescription drug coverage is included. Most Medicare Advantage plans include prescription drug coverage, though not all do. Read your policy documents carefully.
How to Enroll
You don’t need to make critical Medicare decisions by yourself
Wingate Wealth Advisors have connections with Medicare enrollment agents that can help clients choose the right Medicare route given their current situation. With enrollment happening annually, it’s a great opportunity to assess your health, location, medical spending, and pharmacy to ensure your current plan makes sense for the coming year. Agents are able to help you decide on choosing an Advantage or Supplemental plan, plus pick the best Part D option given your current and expected prescriptions. The service is of no cost to you, they are paid a commission by the chosen coverage provider. Please note that not all providers work with enrollment agents.
If you’d prefer to work with someone for purely informational purposes, request an appointment with a SHINE counselor. These counselors can not enroll you, but can explain your options and walk you through the process. Once the enrollment period opens, we recommend booking your appointment as soon as possible to help ensure a spot.