Fisher Investments Reviews Medicare Coverage Options

Medicare Parts and Enrollment

There are four parts of Medicare coverage—Parts A, B, C and D. “Original Medicare” is made up of Parts A and B, which are provided by the federal government. Part C is called “Medicare Advantage” and is provided by private insurance companies. Medicare Advantage combines Parts A and B and may even offer prescription drug coverage (known as Part D) as well as other benefits like vision, dental, hearing care, wellness services and on-call nursing telephone lines. Below is a summary of additional information to consider when evaluating which type of Medicare coverage and supplemental insurance may work best for you.

Medicare Part A

Medicare Part A primarily covers hospital stays for inpatient procedures.

Please see below for information regarding costs associated with Part A:

• Typically, if you are eligible for any type of Social Security benefit, you are not required to pay a monthly premium.
• Part A premiums are waived for people 65 and older (and their spouses) who have paid Medicare taxes for at least 10 years.
• For the 2025 calendar year, the Part A deductible has risen to $1,676 per occurrence.

Medicare Part B

Part B is the medical insurance component of the Medicare program. It covers costs such as doctor’s office visits, medical equipment, and outpatient procedures performed at hospitals, doctor’s offices or other healthcare facilities. Both Parts A and B cover medically necessary home health services, though it does not cover long-term nursing home care.

Please see below for information regarding costs associated with Part B:

• Part B premiums vary according to income (Exhibit 1, click to reveal Part B premiums), as defined by the Social Security Administration (SSA).
• Those with Part B coverage must meet an annual deductible of $257 in 2025. After meeting this amount, beneficiaries pay 20% of the Medicare-approved amount for covered services.^[i]

Exhibit 1: Medicare Part B Premium Rates

Source: https://www.medicare.gov/basics/costs/medicare-costs

Medicare Part C (Medicare Advantage)

Part C, known as Medicare Advantage, is a private healthcare plan that covers the same benefits available in Medicare Parts A and B, in addition to potentially offering some extra benefits “Original Medicare” doesn’t cover. Medicare Advantage is administered by private insurance companies which contract with Medicare—often a Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO).

To join a Medicare Advantage plan, you must first sign up for Parts A and B (“Original Medicare”) with the Social Security Administration. Under Part C, it is advisable to visit doctors within the Medicare Advantage service network, as visiting doctors outside of the service network may result in a higher copay.

Please see below for more information regarding costs associated with Part C:

• Monthly premiums may vary significantly between plans as costs are determined by private insurance companies and depend on the type of coverage included. However, all Medicare Advantage plans have annual limits on out-of-pocket costs by law.
• Part B premiums must be paid in addition to those required for Part C. However, some Medicare Advantage plans offer premium coverage, which can waive part or all of the Part B premium.
• Part C plans may have additional premiums for benefits like Part D prescription drug coverage, dental coverage or routine hearing and vision services.
• Use the Medicare Plan Finder to view a list of Medicare plan options available to you, along with summaries of coverage, premiums, and benefits sorted by plan and provider.

Medicare Part D

Part D allows plan participants to receive prescription medication coverage. Under Part D, a monthly premium must be paid to a private insurance carrier. The plan participant may use this insurance provider’s network of pharmacies to purchase prescription medications.

Please see below for more information regarding costs associated with Part D:

• The average monthly premium for a basic Part D plan in 2024 was $43, though individual premium amounts can vary.^[ii] Plans with extended coverage may cost more.
• Part D plans may or may not include a deductible, but the maximum deductible for 2025 is fixed at $590.^[iii]
• Starting in 2025, all Medicare plans will include a $2,000 cap on what you pay out-of-pocket for prescription drugs covered by your plan.^[iv]

When Can I Enroll in a Medicare Plan?

Enrollment, modification, and cancelation of Medicare plans must be done during enrollment periods. These include initial and special enrollment periods, along with general (Parts A and B) and open (Parts C and D) enrollment periods. We recommend referencing Medicare.gov, the official U.S. government website for Medicare, for additional information and enrollment instructions. Please see Exhibit 2 and 3 for a closer look at enrollment periods.

Exhibit 2: A Closer Look at Initial, Special and Medigap Open Enrollment Periods

Exhibit 3: General and Open Enrollment Periods

Source: https://medicare.com/enrollment/complete-guide-to-medicare-understanding-when-you-can-enroll-in-medicare/

Supplemental Insurance Coverage

Medicare Supplemental Insurance, often called “Medigap”, provides extra insurance to help address potential financial risks associated with unexpected medical costs under original Medicare.

Medigap

Medigap plans include a wide variety of coverage options. Policies are named by letter, and the lettered plans are standardized. Policies with the same letter offer the same benefits regardless of your location or insurance company. However, access may vary across the country.^[v] Medigap insurance providers may select where they offer coverage within a particular state, and medical facility options may be limited in rural areas. With many coverage options available, it’s important to compare the primary features and benefits of all Medigap options (Exhibit 4) before selecting a plan.

As of January 1, 2020, newly issued Medigap plans sold do not cover the Part B deductible. Because of this, Medigap Plans C and F are no longer available to new enrollees. If you already had these plans or the high deductible version of Plan F before January 1, 2020, you may keep your plan. If you were eligible for Medicare before January 1, 2020 but did not enroll by this date, you may still be able to buy one of these plans.

Exhibit 4: Comparing Medigap Plans

Yes = Medigap covers 100% of the benefit
No = Medigap does not cover this benefit
N/A = Not applicable
Percentage = Medigap covers the specified percentage of this benefit

Source: https://www.medicare.gov/supplements-other-insurance/how-to-compare-medigap-policies
*Medigap policies are standardized differently in Massachusetts, Minnesota and Wisconsin:
MA: https://www.medicare.gov/supplements-other-insurance/how-to-compare-medigap-policies/medigap-in-massachusetts
MN: https://www.medicare.gov/supplements-other-insurance/how-to-compare-medigap-policies/medigap-in-minnesota
WI: https://www.medicare.gov/supplements-other-insurance/how-to-compare-medigap-policies/medigap-in-wisconsin
**Plans F and G also offer a high-deductible plan in some states. With this option, you must pay for Medicare-covered costs (coinsurance, copayments, and deductibles) up to the deductible amount of $2,800 in 2024 before your policy pays anything. (Plans C and F aren’t available to people who were newly eligible for Medicare on or after January 1, 2020.)
***For Plans K and L, the percentage listed is how much they cover until you meet your our-of-pocket yearly limit. After you meet your out-of-pocket yearly limit and your yearly Part B deductible, the Medigap plan pays 100% of covered services for the rest of the calendar year. https://www.cms.gov/Medicare/Health-Plans/Medigap/KandL
****Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don’t result in an impatient admission.

Support in Selecting Appropriate Supplemental Insurance Coverage

The Senior Health Insurance Information Network (SHIIP) is a nationwide network of trained counselors available to help you evaluate which Medigap plan is most appropriate for your personal situation. These counselors are familiar with insurance providers and local medical facilities in most states—down to the county level. You may use the State Health Insurance Assistance Program National Website to find a SHIIP counseling office near you.

Should I Enroll in a Medigap or Medicare Advantage Plan?

This decision will depend on your personal circumstances, such as what types of coverage you will need, if you are still working, whether you already have Medicare due to a disability and a variety of other factors. Exhibit 5 provides an overview of the key differences between Medigap and Medicare Advantage plans. Additionally, conducting due diligence by using online services like the Medigap Policy Finder and the Medicare Plan Finder may be helpful as you weigh your options.

If you are viewing from a desktop, hover over the boxes below to see the main differences between Medigap and Medicare Advantage plans. If you are viewing from a mobile device, please click the boxes to learn more.

Exhibit 5: Comparing Medigap and Medicare Advantage Plans

Source: https://www.consumerreports.org/cro/news/2014/10/medigap-vs-medicare-advantage-consumer-reports/index.html

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To learn more about these services and how we can help you, please visit our Financial Planning page.

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Nothing herein constitutes legal, tax or investment advice. The foregoing constitutes the general views of Fisher Investments and should not be regarded as personalized advice. Please seek the guidance of a CPA when making tax planning decisions. You should consult with a lawyer qualified in your state before implementing any changes to your estate plan. Fisher Investments cannot sell you an insurance policy. If you want to purchase an insurance policy, you should contact a licensed insurance provider in your state. Investing in securities involves a risk of loss.

[i]Source: https://www.medicare.gov/basics/costs/medicare-costs
[ii]Source: https://www.kff.org/medicare/issue-brief/key-facts-about-medicare-part-d-enrollment-premiums-and-cost-sharing-in-2024/
[iii]Source: https://www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/yearly-deductible-for-drug-plans
[iv]Source: https://www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/costs-in-the-coverage-gap
[v]Source: Medigap policies in Massachusetts, Minnesota or Wisconsin, Medigap are standardized. For more details, see: https://www.medicare.gov/supplements-other-insurance/how-to-compare-medigap-policies