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 (Medicare Supplemental Insurance) 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.

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 $8,850 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 California, 45% of Medicare beneficiaries choose Original Medicare and 55% choose Medicare Advantage.

How Other Coverage Can Affect Your Medicare Choices

Having another form of health coverage, such as employer-sponsored coverage or Medi-Cal, 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 Health Insurance Counseling & Advocacy Program (HICAP) at 1-800-434-0222.

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:

• For Medicare Part B, you can only opt out without paying penalties later if you have an employer-sponsored insurance policy. If you do, make sure to check with your employer or insurer whether it's safe for you to opt out of Part B.
• If Medicare Part D says the other coverage you have is “creditable,” which means it meets certain standards, you can opt out of Part D and you don’t have to pay a penalty if you decide to sign up for it later within certain time limits.
• If you opt out of Parts B and D and your coverage doesn't meet these standards, you may have to pay monthly penalties if you want Parts B and D later. The longer you go without coverage, the higher the penalties might be.

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 Health Insurance Counseling & Advocacy Program (HICAP).

Do You Also Have Medi-Cal Coverage?

People who qualify for both Medicare and Medi-Cal coverage are called “dual eligibles.” Most dual eligibles do not have to pay Medicare premiums, because either Medi-Cal (or Medi-Cal's Working Disabled Program) pays them or because the person also qualifies for a Medicare Savings Program. Medi-Cal, including Medi-Cal's Working Disabled Program, 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 Medi-Cal.

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

• You can have separate Original Medicare and Medi-Cal coverage. This gives you more flexibility to choose your medical providers, but some may not accept Medi-Cal or Medicare as payment, which could mean you have to pay more.
• You can have a Medicare Advantage plan with separate Medi-Cal coverage. This can be a problem if you have a Medi-Cal managed care plan with a different provider network than your Medicare Advantage network.
• You can have a Medicare Advantage plan that is integrated with Medi-Cal coverage. These are called Dual Special Needs Plans (D-SNPs) or Medi-Medi Plans. With a D-SNP or Medi-Medi Plan, 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 Medi-Cal managed care program, signing up for its D-SNP or Medi-Medi Plan 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.

Is Medicare Your Only Health Coverage?

If you do not have any private health insurance, don’t qualify for Medi-Cal, 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. The California Health Advocates' website has an excellent description of Medigap in California. 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.