Medicare in Michigan

Medicare, a federal health insurance initiative, extends coverage to adults aged 65+ and younger individuals who meet specific disability criteria. Medicare Part A is typically free and covers vital services, such as emergency care, inpatient treatment, nursing home care and home health services. Seniors must pay a premium of $164.90 in 2023 to access Part B’s coverage of outpatient services and preventative care, such as medical transportation, diagnostic tests, medical supplies and equipment. The annual cost to the state of Michigan for Medicare, as of 2021, is $11.15 billion.

Medicare Advantage, known as Medicare Part C, blends all the benefits of Parts A and B minus hospice care. As of 2023, 207 plans are available in Michigan, with 100% of residents eligible for 0% premiums. However, the inclusion of additional coverage, such as dental, vision and prescription drugs, raises the median monthly premium this year to $23.38. Part D covers prescription drugs for Original Medicare recipients and the few Medicare Advantage beneficiaries whose plans don’t include this benefit. Several factors determine the premiums, such as a person’s prescriptions and the tier levels of their medication. To manage out-of-pocket expenses, such as copayments and deductibles, some seniors purchase a Medical Supplement Plan, better known as Medigap. 

Approved private insurance companies manage Medicare Advantage Plans, while the Centers for Medicare & Medicaid Services (CMS) run Original Medicare. Almost 2.2 million Michiganians are eligible for Medicare Advantage in 2023, an almost 2.5% increase from the previous year. As of July 2023, 57% of the state’s eligible residents have purchased a Medicare Advantage Plan — a 4% increase from 2022. Between 2022 and 2023, an additional 2.47% of residents became eligible, while the percentage who signed up was 6.90%, suggesting this option is becoming increasingly popular. These figures support the data that shows Medicare Advantage supplanting Original Medicare in Michigan, as the national average is 48%, which is 9% below Michigan’s uptake.

In this guide, readers will find a review of Michigan’s medical insurance options. There is also information on how to personalize coverage and where to find more information and support.

Options for Medicare Coverage in Michigan

Original Medicare offers basic coverage that meets many seniors’ needs, but some people need more coverage than what the original program provides. Michigan residents have a few options for creating custom insurance coverage suited to their unique needs. These alternatives are available through private insurance companies. Some residents may also be able to apply for financial assistance if they meet the right criteria. 

Original Medicare (Parts A & B)

Original Medicare isn’t limited to a region, so beneficiaries can obtain the same services wherever they are in Michigan or the country. However, U.S. citizens can only rarely access Medicare if they get ill while abroad. Therefore, the U.S. Department of State recommends citizens traveling outside the country get appropriate insurance for their destination.

Under this program, beneficiaries pay for services as they receive them. Medicare covers 80% of costs, with the beneficiary covering the remaining 20% out of pocket. As of 2023, the annual deductible for Part A is $1,600, and for Part B, it’s $226.

Who Should Consider Original Medicare

Original Medicare may be a good option for those who:

• Travel frequently within the United States
• Don’t need extra benefits such as home-delivered meals and coverage for over-the-counter medication
• Want to choose their own prescription drug coverage

Medicare Advantage (Part C)

As Medicare Advantage is more flexible than Original Medicare, it can offer more benefits than the federally-run program. Therefore, beneficiaries only pay for the services they need. There are five types of plans:

• Health Maintenance Organization (HMO)
• Preferred Provider Organization (PPO)
• Private Fee-for-Service plans (PFFS)
• Special Needs Plans (SNPs)
• Medicare Savings Account (MSA)

Each is designed to address different requirements, such as recipients wanting a particular physician and people needing customized treatment for specific health conditions. Consequently, the applicant’s choices will determine the eventual premium, as will their state of health at the time of their application.

Who Should Consider Medicare Advantage

Medicare Advantage plans are ideal for people who:

• Are in good health overall
• Want to add custom coverage options such as vision or dental
• Wish to have more control over their out-of-pocket expenses

Top 10 Medicare Advantage Plans in Michigan

Michigan’s seniors have access to a growing number of Medicare Advantage plans due to their rising popularity over the last decade. The following table helps seniors narrow their list of plans by reviewing the top insurance companies in the state using enrollment numbers, ratings and costs as of August 2023. More information about Medicare C can be found on the Medicare Advantage Plans in Michigan page. 

Medicare Prescription Drug Coverage (Part D)

Original Medicare doesn’t pay for most prescription drugs through Part A or B coverage. Instead, seniors purchase separate prescription drug policies, also called Part D coverage. Medicare contracts with private health insurance companies to provide this coverage. There are multiple plans to choose from with varying monthly premiums, which beneficiaries pay in addition to their Original Medicare premiums. While seniors don’t have to purchase prescription drug coverage when they’re first eligible for Medicare, not obtaining this coverage at this time may result in late enrollment penalties they pay for as long as they have Medicare if they enroll later. Most Medicare Advantage Plans include prescription drug coverage; therefore, seniors don’t need to purchase a separate Plan D in many cases. 

Each prescription drug plan has its own formulary, or list of covered drugs. Formularies are typically split up into tiers. The tier a medication is in determines how much the insurance company pays and how much the beneficiary pays for it. Lower-level tiers are usually made up of generic and low-cost brand name drugs, while higher tiers are composed of more expensive brand name and specialty drugs. In most cases, the lower the tier, the lower the policyholder’s cost-sharing responsibility.

Who Should Consider Medicare Prescription Drug Coverage

Seniors who may benefit from prescription drug coverage include those who:

• Take prescription medication or expect to in the future
• Want to avoid late enrollment penalties
• Want to reduce out-of-pocket prescription drug expenses

Medicare Supplement Insurance (Medigap)

While Original Medicare provides coverage for many medical costs, seniors may still have significant out-of-pocket expenses. These may include copays, coinsurance and deductibles. Seniors may be able to reduce their cost-sharing obligations by purchasing a Medigap plan. These plans can only be used with Original Medicare. It’s illegal for private insurance companies to sell Medigap plans to those with Medicare Advantage plans.

For more information on Medigap plans, seniors can refer to the Best Medicare Supplement Companies of 2023 page.

Who Should Consider Medicare Supplement Insurance

Good candidates for Medigap may be those who:

• Have ongoing health issues and expenses
• Travel overseas often
• Want to access an expanded network of health care providers
• Expect to need health services not covered by Original Medicare

Medicare Resources in Michigan

Selecting the right coverage and understanding Medicare benefits can be frustrating and complicated for many seniors. Michigan residents have access to several resources when they have questions, want to find the best coverage options for their needs and require assistance applying for their benefits. The following agencies and programs can help seniors get one-on-one help when enrolling in Medicare and researching Medicare Advantage and Medigap plans in the state.