4 things to consider when choosing a Medicare plan

Medicare offers a lot of options, and it can be hard to decide which plans are best for you. No matter what your needs, there are four factors you should always consider when comparing Medicare plans.

If you’ve ever been insured under an HMO or PPO plan, you may be familiar with the terms in-network and out-of-network. When a provider or hospital is in-network, you likely pay less for that visit. But it's important to realize that not every plan type relies on networks to determine cost:

• Original Medicare (Parts A and B) and Medicare Supplement: These plans do not use networks or service areas, which means you can see any Medicare-approved doctor or visit any Medicare-approved hospital.
• Medicare Advantage (Part C): These plans use provider networks. This means you must visit a doctor or hospital that is in-network to receive the greatest savings. 

Every private insurance company has different provider networks. When comparing plans, you’ll want to check if your doctors are in network. 

Many of us rely on maintenance medications to stay healthy. When comparing prescription drug coverage, it’s important to see if your medications are covered. A list of medications covered by a plan is called a formulary. You’ll want to be sure your medications are on this list. 

Once you know if your medications are covered, you’ll want to compare your costs for each. Some plans require copays (what you pay each time you fill a prescription), and others may have deductibles (amounts you must pay yearly before you receive a percentage off your cost). 

You’ll also want to check if there are quantity limits and requirements for which pharmacies you can use. Some plans limit your choice of pharmacy by geographic area; others require you to fill your prescriptions by mail either exclusively or after certain quantities of medication are filled. Different plans have different levels of coverage, so be sure to find the one that works best for you.

If you plan to travel often in retirement, it’s important to look at what your health care costs could be when out-of-state or out of the country:

• Original Medicare and Medicare Supplement: With Original Medicare, including Medicare Supplement, you have the freedom to see any Medicare-approved doctor or visit any Medicare-approved hospital nationwide. Some plans offer coverage for foreign travel emergency care.
• Medicare Advantage: You’ll want to choose a PPO plan if you travel often or spend an extended period of time outside the service area. PPO plans give you the freedom to see doctors and other health care providers outside your network using your out-of-network benefits. HMO plans only offer out-of-network coverage for emergencies.

Plan premiums may seem like the obvious bottom line when choosing a plan, but it’s important to look closely at the total value of a plan – not just the cost. In addition to the rates, you want to consider a few important questions when choosing a plan:

• Do you get more for your dollar with one plan over another? 
• Does the plan offer exclusive extras, such as fitness and discount programs? 
• Are your out-of-pocket costs lower with one plan versus another? 

Everyone’s financial situation is different. Taking a look at the total picture can help you find the plan that best meets your needs now and in the future.