Medicare in New Jersey

Medicare is a health insurance program run by the federal government that covers health care for seniors over 65 years old and younger adults with qualifying disabilities. In 2020, over 1.6 million New Jersey residents were enrolled in Medicare, up from 1.3 million in 2010. Original Medicare is still more popular than the Medicare Advantage program, but the number of people choosing Advantage plans is rising. 

The Original Medicare program is made up of several parts. Part A is offered free to residents who contributed long enough through taxes while working. It covers emergency services, inpatient treatment and skilled nursing care in an assisted living facility or home care services. The standard Part B premium amount is $170.10 per month in 2022 and covers preventative care, outpatient procedures, diagnostic testing, medical supplies and equipment and medical transportation. 

Medicare Advantage is also called Medicare Part C and is an alternative to Original Medicare. Enrollees may choose an insurance plan from a private insurance company. Advantage plans must cover the same services as Parts A and B except for hospice care which remains covered under Medicare Part A. These plans allow seniors to add benefits not traditionally offered by Original Medicare, such as vision and dental coverage or private prescription medication coverage. 

Part D covers prescription medications, and seniors may enroll in Part D if they have Original Medicare. Most Advantage plans include prescription drugs, so most seniors enrolled in these plans don’t need a separate Plan D. Premiums vary based on how much coverage is selected. Finally, seniors may purchase a Medicare Supplement plan to reduce out-of-pocket expenses, such as for copayments and meeting their deductibles. 

This guide offers a comprehensive review of seniors’ medical insurance options in New Jersey. It provides an overview of how to customize coverage and where seniors can turn if they need assistance understanding or applying for their benefits. 

Options for Medicare Coverage in New Jersey

Original Medicare offers valuable health coverage that’s sufficient for many seniors in New Jersey. Some residents require more comprehensive care, however, and there are plenty of ways they can customize their insurance coverage to reduce costs and meet their unique needs. Medicare beneficiaries can access these programs and policies through private insurance companies within the state. 

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)

The Medicare Advantage program is an alternative to Original Medicare. It allows seniors to choose an insurance plan that’s administered by a private insurance company instead of the federal government. The primary advantage is the ability to add coverage for vision, dental and prescription drugs and to enroll in savings programs that grant discounts for wellness services such as gym memberships and local activities. Some Advantage plans offer coverage for over-the-counter medications and have annual out-of-pocket limits so that enrollees don’t need to worry about exceeding their budgets. 

There are four types of Medicare Advantage plans: Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Private Fee-for-Service plans (PFFS)and Special Needs Plans (SNPs). Premiums, deductibles, copayments, network providers, access to specialists and eligibility requirements are different from plan to plan. 

Who Should Consider Medicare Advantage

Medicare Advantage is a good choice for people who:

• Would like to keep their out-of-pocket expenses under control
• Wish to enroll in dental, hearing or vision coverage
• Are in mostly in good health 

The Top 10 Medicare Advantage Plans in New Jersey

With so many Advantage plans available, seniors living in New Jersey may have difficulty finding a plan that suits their needs. The following table reviews the top insurance companies in the state based on enrollment data, costs as of April 2022 and customer satisfaction. Because most providers have a number of plan options, a range of costs is shown for each provider. More information about Medicare Advantage plans is available on the Medicare Advantage Plans in New Jersey 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 offer coverage for prescription drugs. 

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 New Jersey

It can be challenging for seniors to review all of their insurance options and navigate the enrollment process. Several programs and agencies in the state offer free support for anyone who needs assistance assembling the right coverage options, applying for Medicare and determining eligibility for financial assistance programs. The following resources are a great place to start.