Medicare in Alabama

Medicare provides federally funded health insurance coverage for those aged 65 and over, as well as younger people with approved disabilities or permanent kidney failure. In 2023, approximately 1,095,323 Alabama residents are eligible for Medicare enrollment, which is 1.90% higher than the number of people who qualified for this coverage in 2022. While this falls short of the national eligibility growth of 2.66%, it highlights Alabama’s reliance on this program.

Original Medicare has two parts, each of which has its own benefits and cost-sharing obligations. Part A, which provides hospital coverage, pays for inpatient hospital stays, hospice, home health care and nursing home care. For most beneficiaries, this coverage is free. However, if neither the beneficiary nor their spouse has paid Medicare taxes for at least a decade, there’s an income-dependent monthly premium of $278 or $506. Part B coverage pays for medical costs outside a hospital setting, including preventative care, diagnostic and screening services, durable medical equipment and medical transportation. This coverage has a standard monthly premium of $164.90, although high-income earners may pay more.

In addition to Original Medicare, beneficiaries can enroll in Medicare Part C, also called Medicare Advantage. This coverage is available through private health insurance companies and includes all Part A and B benefits, along with some additional perks, such as out-of-pocket maximums. In Alabama, 57% of enrollees have Medicare Advantage instead of Original Medicare, putting this state among the top in the nation for Part C adoption. The percentage of beneficiaries with this coverage grew by 6.42% between 2022 and 2023, and the total number of people enrolled in Part C went up by 8.44%. By comparison, nationally, 48% of Medicare beneficiaries opt for Part C coverage versus 45% in 2022.

This guide offers comprehensive information on Alabama Medicare, enlightening seniors about various coverage options, Medicare Advantage, and who should consider enrolling in Medicare Advantage Plans. It also includes details on top Medicare Advantage Plans, prescription drug coverage and Medigap and provides a curated list of Medicare resources to help them determine the most suitable coverage for their needs.

Options for Medicare Coverage in Alabama

While the federal government offers Original Medicare coverage, additional coverage is also available through private insurance companies. This option is ideal for seniors who need more than the basic coverage that Original Medicare provides. Private options are easy to tailor to individual needs to make medical treatment more affordable and accessible for older adults.

Original Medicare (Parts A & B)

The Centers for Medicare & Medicaid Services administers Medicare in Alabama, as well as every other state, and sets rules regarding coverage and cost-sharing requirements. The program features two parts, including Part A hospital coverage and Part B medical coverage. Both coverage options have annual deductibles beneficiaries must pay before their coverage kicks in. For Part A, there’s a $1,600 deductible for every hospital stay, along with a daily copay for stays beyond 60 days. Part B has an annual deductible of $226. Once beneficiaries meet this deductible, they’re responsible for 20% of covered health care expenses.

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)

Medicare Advantage, or Medicare Part C, is sold by private health insurance companies and provides another way for beneficiaries to get their benefits. Part C plans include all benefits from Medicare Parts A and B, but they’re popular among people who want more robust coverage and annual out-of-pocket maximums. Many plans feature prescription drug, vision and dental benefits, which are omitted from Original Medicare, and some plans have $0 deductibles. There are four main types of Medicare Advantage Plans, including HMOs, PPOs, PFFS plans and SNPs, although the plans an individual has access to depends on where they live.

Who Should Consider Medicare Advantage

Medicare Advantage is a good choice for the following individuals:

• Seniors who want to limit on their out-of-pocket expenses 

• Are in good health and qualify for lower premiums

• Individuals who want to add hearing, dental and vision services to a single plan
• Individuals who are comfortable with managed care
• Seniors who need long-term care in a residential facility (select MA plans offer this coverage)

The Top 10 Medicare Advantage Plans in Alabama

Alabama seniors have access to a variety of Medicare Advantage plans to best suit their individual needs. The following table details the top Medicare Advantage plans throughout the state, including the number of individuals enrolled in each plan, the plan type and the average monthly premium cost. More information is available on the Medicare Advantage Plans in Alabama 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.

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:

• Currently 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 Alabama

Medicare can be a complicated program to navigate, considering each decision can affect seniors’ abilities to afford health care. Fortunately, some organizations and agencies can assist in the application process. These resources help explain the available plans in Alabama and how to obtain the best coverage for additional services such as prescription medications and dental and vision services.