Aon Hewitt

Building Complete Coverage

First Things First

You must be enrolled in original Medicare through the Social Security Administration before you can start building on your coverage. Reach Social Security by:

 

Download a free copy of "Making Sense of Medicare."
This guide contains information to help you understand your Medicare options, make a well-Making Sense of Medicareinformed coverage decision, and enroll in a plan.

 






For even more information, the Centers for Medicare & Medicaid Services (CMS) offer a "Medicare & You" handbook.

Click Here to Download a Copy

Original Medicare Basics

Original Medicare is a low-cost government insurance program that guarantees access to health insurance for Americans age 65 and older and younger people with certain medical disabilities. It pays for many health care expenses but not all. Medicare covers its share of an approved amount and you pay the rest through deductibles and coinsurance. Original Medicare is made up of two parts:

Part A:Hospital insurance which helps cover inpatient care in hospitals and skilled nursing facilities, hospice care, and home health care. Most people do not pay a monthly premium for Part A.

Part B:Medical insurance which helps cover medically necessary doctor services and visits, lab tests, outpatient care, durable medical equipment and supplies, ambulance services, and preventative care. Part B carries a monthly premium.

Your options for more comprehensive coverage

Private insurance companies on the Aon Retiree Health Exchange offer plans with monthly premiums to help cover costs that Original Medicare does not. Instead of paying doctors and hospitals directly, the government pays these private insurers to administer your plan. These options cover all or part of the deductible for Original Medicare Part A, as well as Part B co-insurance and deductibles, and keeps all the benefits and services covered under Original Medicare. You may also add prescription drug coverage or routine dental and vision care.

Side-by-Side Comparisions of The Most Complete Options

 

MAPD

Medicare Advantage Bundled With Prescription Drug

MEDIGAP + PART D

Medicare Supplement (Medigap) Plus Prescription Drug

Your Choices

The doctors and hospitals are part of a provider network (HMO and PPO) so you need to be sure your providers are included. With a PPO, you get an extended network but cost is higher.

You can use any provider that accepts Medicare. Cost is the same for all providers.

Out-of-Pocket Costs

Monthly premiums are typically lower, leading to lower total out-of-pocket cost if you don't frequently use medical services. If you do have higher usage, costs can vary for expected OR unexpected services.

Monthly premiums are typically higher, but if you use services often, out-of-pocket costs are limited. Out-of-pocket cost can be higher if you don't use services. Monthly costs are more dependable.

We recommend that you compare the total estimated out-of-pocket cost between MAPD and MEDIGAP + Part D to see whether the difference impacts you.

Option 1

Medicare Advantage (Part C) Bundled With Prescription Drug (Part D) = MAPD

 

Original Medicare Insurance

1 Or 2

Medicare Advantage bundled with a Prescription Drug Plan

Medicare Supplement Plan

Medical Coverage

Prescription Drug Plan

Prescription Coverage

+

Bundles Part C; D Plans into a single complete plan

Part C, also known as Medicare Advantage (MA)*: Network-based like a HMO or PPO, these plans combine all the benefits covered under Original Medicare into one policy with greater financial protection. 

Part D: Prescription Drug plans help pay for medications you may need.

Why it makes sense:With a select provider network to contain costs (be sure your doctors and hospitals are in the carrier’s network), Medicare Advantage bundled with a built-in Prescription Drug Plan (MAPD) covers more than Original Medicare and is the most complete option. Plus, many Medicare Advantage plans offer additional hearing, vision, and dental benefits. This combination reduces or limits out-of-pocket medical costs, and premiums are generally lower than Medicare Supplement (Medigap) options.

Considerations:Medicare Advantage plans are less predictable from a monthly out-of-pocket perspective because you pay for services if and when you use them.

What is a Medicare Advantage (Part C / MA) Plan?

Medicare Advantage (Part C or MA) plans are offered by private insurance companies on the Aon Retiree Health Exchange and are approved by Medicare. If you join a Medicare Advantage plan, you still have Original Medicare (Part A and Part B), but the insurance company is responsible for coordinating your care and paying claims.

Most Medicare Advantage plans have a Prescription Drug plan (Part D) built in (MAPD). For those that don’t, you can purchase prescription drug coverage separately. Always make sure your medications are listed in the formulary (a list of covered prescription drugs).

With Medicare Advantage, you are always insured for emergency and urgent care. Extra coverage for vision, hearing, dental and health/wellness programs may be available at an additional cost.

In addition to your Part B premium, Medicare Advantage plans typically have low or $0 monthly premiums. However, your costs will include copayments, deductibles, and coinsurance. Your annual out-of-pocket costs will vary depending on which plan you choose. All your coverage is combined into a single plan, with a single ID card, and one bill to pay.

Because these plans are network based (HMO and PPO), check to make sure your preferred doctors, hospitals, and specialists are included in the provider network.

When can you join a Medicare Advantage Plan?

Initial Enrollment: You have a 7-month period during initial enrollment. You can join 3 months before the month you turn 65, the month you turn 65, and up to 3 months after the month you turn 65.

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If You Are Disabled: You can join during the 7-month period that begins 3 months before your 25th month of disability and ends 3 months after your 25th month of disability.

Annual Open Enrollment Between October 15 and December 7: Anyone with Medicare can join, switch, or drop a Medicare Advantage plan.

Special Enrollment: In certain situations, you may be able to join, switch, or drop a Medicare Advantage plan. Those special circumstances include a move out of your plan’s service area or you lose your current coverage.

Option 2

Medicare Supplement (Medigap) Plus Prescription Drug = MEDIGAP + PART D

 

Original Medicare Insurance

1 Or 2

Medicare Advantage bundled with a Prescription Drug Plan

Medicare Supplement Plan

Medical Coverage

Prescription Drug Plan

Prescription Coverage

+

Combines two separate plans for remaining coverage needs after Original Medicare

Medicare Supplement, also known as Medigap*: Pays some of the health care costs that Original Medicare doesn’t cover, like copayments, coinsurance, and deductibles.

Part D: Prescription Drug plans help pay for medications you may need.

Why it makes sense: Medicare Supplement(Medigap) pays secondary to Original Medicare and is designed to cover the costs that remain after approved Parts A and B have been paid. These plans give you flexibility when choosing your doctors — you can go to any doctor or hospital that accepts Medicare — and monthly out-of-pocket costs are more predictable.

Considerations: Premiums and total out-of-pocket costs can be higher than Medicare Advantage.

*You cannot have Medicare Advantage and Medicare Supplement at the same time.

What is a Medicare Supplement (Medigap) Plan?

As the name suggests, Medicare Supplement (Medigap) insurance is designed to fill gaps in costs that Medicare Parts A and B do not cover. While there are a number of different Medigap options offered by private insurance companies on the Aon Retiree Health Exchange, benefits are standardized in each state.

Medigap does not include prescription drug coverage, so you should consider enrolling in a Prescription Drug plan (Part D) as well.

For all states except Massachusetts, Minnesota, and Wisconsin, the chart below summarizes what each standardized Medigap plan (A-N) covers. With Plan F, you only pay the monthly premium and pay nothing additional for a Medicare-covered procedure when you see a doctor or go to a hospital that accepts Medicare.

Although Medigap offers standardized benefit packages, insurance companies set their own monthly premiums, so you need to compare prices among your options.

Checkmarks indicate plans that pay 100% of the benefit cost.
 

2019 Medicare Supplement (Medigap) Plans

Medigap Benefits A B C D F1 G K2 L2 M N3
  50% 75% 50%
    50% 75%
50% 75%
               
50% 75% 3
               
50% 75%
    80% 80% 80% 80%     80% 80%

1Some insurance companies offer a high-deductible version of Plan F, which requires you to pay a deductible of $2,300 before these costs are covered (in 2019).

2Maximum out-of-pocket expenses of $5,560 for Plan K and $2,780 for Plan for Plan L apply (in 2019).

3Plan 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 inpatient admission.

When can you join a Medicare Supplement (Medigap) Plan?

Medigap Open Enrollment: This 6-month period begins on the first day of the month in which you’re 65 or older and enrolled in Part B. (Some states have additional Open Enrollment Periods.) After this enrollment period, your option to buy a Medigap policy may be limited and may cost more.

  • If you delay enrolling in Part B because you have group health coverage based on your (or your spouse’s) current employment, your Medigap Open Enrollment Period won’t start until you sign up for Part B.
  • Some states require Medigap insurance companies to sell Medigap policies to people under 65.

Outside Open Enrollment: If you apply for Medigap coverage after Open Enrollment, there's no guarantee of acceptance unless you meet the medical underwriting requirements or are eligible because of a special situation.

What is Prescription Drug coverage (Part D)?

Because Original Medicare does not include coverage for most prescription drugs, Prescription Drug Plans (Part D or PDPs) help pay for commonly prescribed generic and brand-name medications.

There are two ways you can get the prescription drug coverage you need from private insurance companies on the Aon Retiree Health Exchange:

  • Medicare Part D can be added to Medicare Parts A and B, and is a more complete option when a Medigap plan is included.
  • Medicare Advantage Prescription Drug (MAPD) Plans bundle Medicare Advantage with prescription drug coverage. If you enroll in a MAPD, you do not need to enroll in a separate prescription drug plan. (While most Medicare Advantage are MAPD and include a prescription drug plan, some options allow you to add stand-alone drug coverage if it’s not included).

The Donut Hole
The Medicare Part D coverage gap, commonly referred to as the "donut hole," is a temporary limit on what the drug plan will cover. It begins after you and the prescription drug plan have spent a certain amount for covered drugs for the year.

While in the coverage gap, you will be responsible for the majority of your prescription costs. If your needs are significant, and you reach the annual threshhold in total prescription costs for the year, then you will automatically get catastrophic coverage. Catastrophic coverage ensures you will only pay a small coinsurance or copayment for covered drugs for the rest of the year.

 

When can you join, switch, or drop a Prescription Drug plan?

If you decide not to join a Medicare prescription drug plan when you are first eligible, you could pay a late enrollment penalty if you join one later.

Initial Enrollment: You have a 7-month period during initial enrollment. You can join 3 months before the month you turn 65, the month you turn 65, and up to 3 months after the month you turn 65.

 

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If You Are Disabled: You can join during the 7-month period that begins 3 months before your 25th month of disability and ends 3 months after your 25th month of disability.

Annual Open Enrollment Between October 15 and December 7: Anyone with Medicare can join, switch, or drop a prescription drug plan.

Special Enrollment: In certain situations, you may be able to join, switch, or drop prescription drug coverage. Those special circumstances include a move out of your plan’s service area or you lose your current coverage.

Alternate Option

Original Medicare (Parts A and B) plus a Prescription Drug Plan (Part D)

 

Original Medicare Insurance

1 Or 2

Medicare Advantage bundled with a Prescription Drug Plan

Medicare Supplement Plan

Medical Coverage

Prescription Drug Plan

Prescription Coverage

+

Protection from the high cost of prescription drugs outside of Original Medicare

Why it makes sense: Original Medicare (Parts A and B) does not include prescription drug coverage, so this option adds a stand-alone prescription drug plan (Part D).

Considerations: Parts A and B only cover inpatient and basic outpatient services, leaving retirees to pay the full cost of anything not completely covered.

What is Prescription Drug coverage (Part D)?

Because Original Medicare does not include coverage for most prescription drugs, Prescription Drug Plans (Part D or PDPs) help pay for commonly prescribed generic and brand-name medications.

There are two ways you can get the prescription drug coverage you need from private insurance companies on the Aon Retiree Health Exchange:

  • Medicare Part D can be added to Medicare Parts A and B, and is a more complete option when a Medigap plan is included.
  • Medicare Advantage Prescription Drug (MAPD) Plans bundle Medicare Advantage with prescription drug coverage. If you enroll in a MAPD, you do not need to enroll in a separate prescription drug plan. (While most Medicare Advantage are MAPD and include a prescription drug plan, some options allow you to add stand-alone drug coverage if it’s not included).

The Donut Hole

The Medicare Part D coverage gap, commonly referred to as the "donut hole," is a temporary limit on what the drug plan will cover. It begins after you and the prescription drug plan have spent a certain amount for covered drugs for the year.

While in the coverage gap, you will be responsible for the majority of your prescription costs. If your needs are significant, and you reach the annual threshhold in total prescription costs for the year, then you will automatically get catastrophic coverage. Catastrophic coverage ensures you will only pay a small coinsurance or copayment for covered drugs for the rest of the year.

 

When can you join, switch, or drop a Prescription Drug plan?

If you decide not to join a Medicare prescription drug plan when you are first eligible, you could pay a late enrollment penalty if you join one later.

Initial Enrollment: You have a 7-month period during initial enrollment. You can join 3 months before the month you turn 65, the month you turn 65, and up to 3 months after the month you turn 65.

 

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If You Are Disabled: You can join during the 7-month period that begins 3 months beore your 25th month of disability and ends 3 months after your 25th month of disability.

Annual Open Enrollment between October 15 and Decembr 7: Anyone with Medicare can join, switch, or drop a prescription drug plan.

Special Enrollment: In certain situations, you may be able to join, switch, or drop prescription drug coverage. Those special circumstances include a move out of your plan’s service area or you lose your current coverage.

Comparing Medicare Advantage & Medigap Plans
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