Medicare in Arizona

Medicare is a federal health insurance program primarily intended for seniors aged 65 or older. However, some people may qualify for it sooner if they have a disability, amyotrophic lateral sclerosis or end-stage renal disease. Nearly 1.4 million Arizona residents, or about 19% of the state’s population, were enrolled in Medicare for the 2022 plan year. It’s estimated that Medicare enrollment will increase by about 1.5 million beneficiaries annually from 2021 to 2029 nationwide.

Original Medicare consists of two primary parts, Part A and Part B, with Part D for prescription drugs sold by private insurance companies. Part A, often referred to as hospital insurance, helps with inpatient care costs in hospitals, plus home health, skilled nursing and hospice care costs. Part B, frequently referred to as medical insurance, helps with outpatient care costs and services provided by doctors and other medical professionals.

Most people get premium-free Part A, meaning there’s no cost to the beneficiary. Those who didn’t qualify for free premiums in 2022 paid $274 or $499 monthly, based on how long the beneficiary or their spouse worked and paid Medicare taxes. The Part B monthly premium in 2022 starts at $170.10.

Beneficiaries may also opt for a Medicare Advantage Plan, often called Medicare Part C, sold by private insurance companies. Medicare Advantage replaces Original Medicare, combining Parts A and B and usually prescription drug coverage (Part D) and other health care services. In Arizona, about 45% of Medicare beneficiaries chose Medicare Advantage in 2021 compared to the national average of 42%. 

This guide provides information on Medicare in Arizona, including an overview of coverage options. It also offers several resources to help seniors make informed health insurance decisions.

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)

Original Medicare is administered by the Centers for Medicare & Medicaid Services (CMS)and is open to seniors aged 65 and over, along with those under 65 years old, but with certain disabilities or end-stage kidney disease. It includes two parts. Part A covers inpatient hospital care, nursing home and skilled nursing care, hospice and home health care. Part B, or medical coverage, pays for medically necessary goods and services such as durable medical equipment, mental health services and emergency medical transportation. 

Unlike most private Medicare plans, Original Medicare’s provider network isn’t limited to the beneficiary’s geographic region, making it easier to obtain services while traveling within the country. In most cases, Medicare doesn’t pay for health services the individual receives outside the United States. 

Under this program, seniors pay for services as they receive them. They must pay an annual deductible, which is $1,556 for Part A and $233 for Part B in 2022. After they’ve paid this amount, Medicare covers all eligible services at 80%. Beneficiaries pay the remaining 20% out of pocket.

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, sometimes called MA Plans, provide alternate ways to receive Medicare Parts A and B coverage. Private health insurance companies administer these plans with Medicare approval. Most MA plans require beneficiaries to receive their health care services from providers within the plan’s network for non-emergency care. Medicare Advantage often offers additional benefits not included with Original Medicare, such as prescription drug coverage (Part D) and vision, dental and hearing care. These plans typically cap beneficiaries’ annual out-of-pocket costs. The four most common types of MA 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) and Medicare Medical Savings Account (MSA) plans are two other types of Medicare Advantage, but these are less common.

Nationwide, Medicare Advantage enrollment more than doubled between 2010 and 2020. Over the last decade, Medicare Advantage has swiftly grown to play a larger role in the Medicare program. About 45% of Medicare beneficiaries in Arizona chose Medicare Advantage over Original Medicare in 2021.

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 April 2022. 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 2022 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.