Should You Choose a Medicare Advantage Plan, a Medicare Supplement Plan, or Traditional Medicare?

If you are financially well off, you have more choices than those of lesser means; most likely it is the more expensive of the Medicare Supplement Plans that will maximize your coverage and minimize paperwork, as it works in tandem with Traditional Medicare. There are a variety of Medicare Supplement Plans and differences in costs and availabilities of the different types of these Plans from state to state. Make sure you understand the similarities and the differences, so that you choose the optimal Plan for your needs.

If you are living on a very minimal income such that you are a beneficiary of both Medicare and Medicaid ["Dual Eligible"], there are special Medicare Advantage Plans called "Special Needs Plans" in which you may enroll at no premium cost including both medical care and prescription drug coverage. You will likely have a greater pool of physicians from which to choose care as the physicians will be contracted with both Medicare and Medicaid.

If you are not eligible for Medicaid itself and yet, you have a sufficiently low income, you may qualify for assistance from the Medicare Savings Program in which Medicaid may reimburse you the cost of your Medicare Part B and Medicare Part D monthly premiums. You may even be eligible for partial reimbursement for co-payments or co-insurance. And you may qualify for some of the Special Needs Plans.

If you are neither "rich" nor "poor" there are many choices available to you with respect to both Medicare Advantage Plans to Medicare Supplement Plans, all according to your needs. You may choose from a MAP with no premium including both medical care and prescription drug coverage, to a MAP that may be as expensive as some Medicare Supplement Plans. Some cost more, some less; some offer dental coverage or fitness club memberships, and some do not. Be sure you understand your choices so that you can make a confident decision.

Most Medicare Supplement Plans and most Medicare Advantage Plans offer a vitally important benefit that is not written into Traditional Medicare: MOOP (Maximum Out of Pocket) cost sharing. MOOP is a ceiling amount for annual medical co-payments after which the private insurance company picks up the tab. The MOOP ceiling amount may vary from policy to policy from as low as $1000 to as high as $5000 (these figures approximate the present MOOP range). This MOOP benefit can be profoundly important in protecting your home and your bank account. In the event of catastrophic illness or catastrophic medical event even the prorated costs of Traditional Medicare can snowball and result in the depletion of personal assets including the loss of a home. Can you afford not to protect yourself from the loss of your home and the loss of your assets due to an hypothetical medical catastrophe? This is something you must consider.

Retirement Plan Health Insurance originating with your employer or union are modeled after Medicare Supplement Plans and now recently and increasingly after Medicare Advantage Plans. You may or may not be better off to stay in or enroll in the Retirement Plan that is offered to you. Some Retirement Plans will offer more benefits and some less; some will cost more or cost less; some will allow you to return at any time, should you choose coverage outside of the Company Plan; some will never allow you to return; some may allow you to keep the Company Plan, if it is your choice for just the prescription drug coverage (and this may allow you to keep your foot in the door to return to the Company Plan for medical care, too; this is important due to the congressional legislation in the summer of 2008 that set a termination date for the PFFS* type Medicare Advantage Plan effective January 1, 2011; unless there is a reversal of this regulation, returning to your company Plan may possibly be your best option for 2011).

Military retirees may or may not be eligible for Tricare, a private insurance option that is similar to a Medicare Advantage Plan or a Medicare Supplement Plan. Regardless of participation in Tricare, at age 65 or by virtue of disability, Medicare in it's various forms may benefit the veteran, even when the VA medical facilities are the primary source of medical care.

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* There are three basic types of Medicare Advantage Plans and these are similar to the three basic types of health plans available in the strictly private sector: HMO's, PPO's, and PFFS's.

HMO's are "Health Maintenance Organizations" that maximize cost savings by limiting the patient to a strict network of health care providers. Patients must choose a PCP (Primary Care Physician), who is their "gatekeeper" to specialist care providers.

PPO's are "Preferred Provider Organizations" and are similar to HMO's in that there is often a designated Primary Care Physician and network of included medical providers. There is more freedom of choice, however, in that the patient is not limited to the network or to the medical providers specified by the PCP; these freedoms come at the price of additional costs for care provided "outside of network".

PFFS's are "Private Fee for Service Plans" that require no PCP and have no network; patients may use any physician or healthcare provider, as long as that provider is willing to accept the Plan. For at least 10% of Medicare Advantage Plan Beneficiaries, this type of Plan has been the Plan of their choice. (It is politics that has tentatively taken away this first choice to millions of Americans, and one hopes that politics will undo this mistake no later than the springtime of 2010 so that upheaval is not inevitable in 2011.)