Medicare in Arizona

Medicare is a federal health insurance program intended for seniors aged 65 and older, but certain disabilities or diagnoses can qualify younger individuals for eligibility. Eligible enrollees can choose from Original Medicare and Medicare Advantage. While both offer the same base services, there are a few notable differences. Original Medicare is administered federally, while Medicare Advantage Plans are purchased through private insurance providers. Original Medicare benefits consist of two primary parts: Part A for hospital and inpatient care and Part B covering outpatient care and services. Medicare Advantage Plans, sometimes called Medicare Part C, offer the same Part A and Part B coverage, but they set their own pricing models.

In most cases, people receive Part A coverage at no cost to the beneficiary, but they have a percentage copay depending on the length of stay. Those who don’t qualify for free coverage pay either $278 or $506 monthly for Part A based on how long they or their spouse worked and paid Medicare taxes. The Part B monthly premium in 2023 starts at $164.90 monthly.

Medicare accounts for around 10% of the federal budget and 21% of national health spending, totaling $689 billion in 2021. In 2021, Arizona spent $7.745 billion on Medicare Parts A and B services, a significant figure that’s likely to increase as the number of eligible enrollees increases. In 2023, 1,413,932 people enrolled in a Medicare program, representing around 19% of the total state population. 

In Arizona, nearly 1.45 million people are eligible for enrollment in Medicare Advantage, up 2.77% from 1.41 million people eligible in 2022. Of those, just over 717,000 are enrolled as of July 2023, representing 49% of those eligible. This is slightly above the national enrollment rate of 48%. Overall, the growth in the percentage enrolled in Arizona was 3.96%, almost half of the 6.90% nationwide figure. Compared to 2022, 6.83% more people enrolled in Medicare Advantage in 2023. Compared to national norms, this is a slower-than-average growth. Nationwide, the growth in enrollees increased by 9.75% from 2022 to 2023, but just 2.66% more people became eligible across the country. 

Options for Medicare Coverage in Arizona

The federal government manages Original Medicare, usable at any doctor or hospital in the United States that accepts Medicare. Arizona residents who qualify for Medicare also have other options provided by Medicare-approved private insurance companies. These companies must follow the rules that Medicare sets. They may provide Medicare Part D and Medicare Supplemental Insurance (Medigap) to complement Original Medicare. Most individuals enrolled in Medicare Advantage have included drug coverage (Part D) and do not need Medigap.

Original Medicare (Parts A & B)

The Centers for Medicare & Medicaid Services (CMS) administers Original Medicare to seniors 65 and older and those under 65 with qualifying disabilities or diagnoses. Original Medicare includes two parts. Part A coverage provides inpatient hospital care, skilled nursing and nursing home care, home health care and hospice. Part B covers medically necessary goods and services, including ambulance services, mental health, durable medical equipment and preventative care.

Unlike most private health care plans, Original Medicare’s provider network is not limited to certain geographic regions; beneficiaries can receive care anywhere in the country from physicians who accept Medicare. 

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 Plans provide Medicare Part A and B coverage through a private provider that has been approved by CMS. In most cases, Medicare Advantage beneficiaries must receive non-emergency services from physicians within their plan’s network. However, beneficiaries also receive additional benefits not included in Original Medicare, such as prescription drug coverage (Part D), dental, vision and hearing care, and there is typically an annual out-of-pocket cap. The most common Medicare Advantage Plans are:

• Health Maintenance Organizations (HMO)
• Preferred Provider Organizations (PPO)
• Private Fee-for-Service Plans (PFFS)
• Special Needs Plans (SNP)
• HMO Point of Service (HMO-POS)
• Medicare Medical Savings Account (MSA)

Who Should Consider Medicare Advantage

Medicare Advantage may be a good fit for those who:

• Want an all-in-one managed care plan
• Like access to additional benefits not offered by Original Medicare like dental, vision and hearing care
• Are relatively healthy and prefer lower premiums

The Top 10 Medicare Advantage Plans in Arizona

Compare these top 10 Medicare Advantage providers in Arizona by enrollment to understand the options available. Listings for each provider include plan types, a monthly cost range and its Medicare star rating. These details were last updated in August 2023. Learn more on the Medicare Advantage Plans in Arizona 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. Most Advantage plans include prescription drug coverage (Part D).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 Arizona

Medicare offers valuable health insurance coverage to older adults who may not otherwise be able to afford it, but many find the sign-up process confusing. They may not understand how Medicare works or their private insurance options. Seniors overwhelmed by the application and enrollment process have several resources in Arizona to help them unravel their coverage and benefits options to ensure they get the ideal coverage for their needs. These resources usually don’t charge a fee for counseling and other assistance that helps beneficiaries understand all aspects of the Medicare program, including Medicare Advantage plans, Medigap and prescription drug plans.