Medicare in Iowa

Medicare is a federal program that provides health insurance for seniors aged 65 and over, as well as for adults with disabilities. Original Medicare splits its coverage into three parts: A, B and D. Part A is available at no monthly cost to enrollees who have the minimum required work credits and covers the inpatient expenses beneficiaries incur during stays in the hospital. Part B is the optional outpatient benefit that covers medical office visits, transportation services and medically necessary equipment. As of 2023, the basic premium for Part B is $164.90 a month. Part D is also optional and helps cover the cost of prescription drugs at the pharmacy. Premiums vary for Part D, and seniors with low income may qualify for Extra Help.

Medicare Advantage is commonly called Part C because it was adopted before Part D, but it isn’t part of Original Medicare. Instead, it’s an alternative method for enrollees to get their benefits through an approved private insurance company. Part C plans combine all the same coverage as Parts A and B for a single monthly premium. Premium amounts vary by state, risk group and plan, with some plans available in Iowa for $0 a month. Seniors who enroll in Medicare Advantage can save further by skipping unnecessary Medicare supplement (Medigap) premiums.

More than 661,000 people in Iowa are enrolled in Medicare in 2023, a jump of over 29% from 2010. As of July 2023, 71% of enrollees get their benefits via original Medicare, while 33% have chosen one of the state’s authorized Medicare Advantage Plans. This represents a 13.82% jump in Medicare Advantage enrollment from 2022 to 2023. During the same period, Medicare Advantage enrollment grew nationally by just 6.9%. Iowa spends $4.6 billion each year in Medicare, which works out to $6,959 per beneficiary.

This guide goes over the choices seniors have when planning their medical coverage in Iowa. It lists specific costs, describes available benefits and provides helpful resources for older adults and families looking for the health care that best meets their needs.

Options for Medicare Coverage in Iowa

Original Medicare is still the most popular choice for Iowa residents because it offers basic coverage that meets many peoples’ needs. Some residents may require more comprehensive coverage, however, and have the choice to review alternatives. Medicare Advantage plans and Medigap policies sold by private insurance companies offer ways to bring down out-of-pocket costs and add services not covered by Original Medicare.

Original Medicare (Parts A & B)

Original Medicare is open to seniors aged 65 and over, along with adults who have certain disabilities or end-stage kidney disease (ESRD). Part A covers inpatient hospital care, nursing home and skilled nursing care, hospice and home health care. Part B pays for medically necessary goods and services.

Seniors generally don’t have to pay a premium for Part A, but Part B does charge a monthly premium that changes from year to year. There’s also an annual deductible of $1,600 for Part A and $226 for Part B in 2023. After this, Medicare covers 80% of costs for eligible services.

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 is an increasingly popular alternative to Original Medicare that combines benefits from Parts A and B into a single plan with one monthly premium. Most plans also include drug coverage and even a few extras that Original Medicare doesn’t pay for, such as dental, vision and hearing aids. Medicare Advantage Plans are issued by private insurers and differ from state to state, but there are similarities in plan structure across providers. Medicare Advantage Plans in Iowa are available as HMOs, PPOs, PFFS plans and SNPs, or special needs plans. Prices and terms for these policies vary by provider.

Who Should Consider Medicare Advantage

Medicare Advantage plans are ideal for seniors who:

• Would like more control over out-of-pocket expenses through out-of-pocket maximums
• Need coverage for vision and dental care

• Are generally healthy, so may benefit from lower premiums

• Don’t mind receiving managed care 

The Top 10 Medicare Advantage Plans in Iowa

Iowa residents considering Medicare Advantage have a lot of options to choose from, which could complicate the process of building custom coverage. The following table highlights the top plans in the state based on how many people have enrolled, monthly premiums and estimated out-of-pocket expenses as of August 2023. More information is available on the Medicare Advantage Plans in Iowa 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 Iowa

Understanding Medicare benefits and enrolling for coverage is often a complex, confusing process that frustrates seniors who are looking to build the right coverage for their needs. Iowa residents have access to resources to help them review plans, apply for coverage and determine if they qualify for financial assistance programs such as Medicaid. The following organizations offer free assistance and may be able to help in person, over the phone or virtually.