Medicare in Vermont

Medicare is a health insurance program that helps pay for some medical costs for those aged 65 and older and for people with certain disabilities. 

Original Medicare consists of two parts: Part A and Part B. Part A covers the costs of inpatient hospital care, skilled nursing care in a nursing home, hospice care and home healthcare. Individuals who paid Medicare payroll tax for a minimum number of years receive this coverage for free. Through Part B, Medicare recipients get help paying for some of the costs of outpatient medical care, durable medical equipment, mental health services, ambulance and other services and. Medicare recipients pay a monthly premium for Part B coverage. In 2022, the cost is $170.10.

Medicare recipients may choose to receive coverage through Medicare Advantage or Medicare Part C provided by a private insurer rather than to participate in Original Medicare. Prescription drug coverage is available to both Original Medicare and Medicare Part C enrollees through Medicare Part D. Most Medicare Part C plans include Part D, and therefore seniors enrolled in this plan do not need to apply separately for drug coverage. 

In Vermont, 154,684 individuals are enrolled in Medicare in 2022; almost 24% of the state’s more than 645,000 residents are participating in this program. About 82% of Medicare beneficiaries in Vermont received coverage under traditional Medicare, with the remaining 18% covered by Medicare Advantage plans in 2021. This puts Vermont’s share of Medicare Advantage recipients well below the nationwide rate which was 42% in the same year. This guide reviews the options for Medicare coverage in Vermont to help those eligible for Medicare make important decisions regarding their health coverage.

Options for Medicare Coverage in Vermont

Vermonters have choices when it comes to Medicare. Residents of the state may opt to receive Original Medicare or a Medicare Advantage plan through a private health insurance company. Add-on coverage for prescription drugs is available to all Medicare beneficiaries through Part D plans offered by private insurers. In addition, Original Medicare recipients may add Medicare Supplement insurance to lower their out-of-pocket costs.

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. 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 are an alternative to Original Medicare offered through private insurance companies. Laws require Medicare Advantage plans to cover as much as Original Medicare covers (except hospice care which remains covered by Medicare Part A), but to give insurers the option to provide additional benefits.

Vermonters who opt for a Medicare Advantage plan may receive access to coverage for vision and dental care, prescription drugs and other services that Original Medicare usually won’t pay for. Instead of paying 20% coinsurance for outpatient services, most plans require enrollees to pay a copay, which may result in lower out-of-pocket costs.

Four main types of Medicare Advantage plans are available: Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Private Fee For Service (PFFS) plans and Special Needs Plans (SNPs).

Who Should Consider Medicare Advantage

Medicare Advantage may be a good choice for individuals who:

• Wish to have more control over what medical expenses they pay for out of pocket
• Want additional benefits like prescription drug, dental and vision coverage
• Are in overall good health and may qualify for lower premiums
• Are comfortable with managed care

The Top 10 Medicare Advantage Plans in Vermont

The table below lists the 10 most popular Medicare Advantage plans (by enrollment) in Vermont. Most Medicare Part C insurance providers offer more than one plan, so cost information includes a range, while enrollment numbers reflect the total number of Vermonters enrolled in all of the insurer’s Medicare Advantage plans as of April 2022. Learn more about Medicare Advantage plans here.

Medicare Prescription Drug Coverage (Part D)

Original Medicare doesn’t pay for most prescription drugs through Part A or B coverage. Instead, Original Medicare users purchase separate prescription drug policies, also called Part D coverage. Part D is already included in most Advantage plans. 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 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 Vermont

Vermonters have a wealth of options when it comes to Medicare coverage. While that means that seniors and those with disabilities are free to choose the type of health insurance that fits their budgets and suits their medical needs, it can also make it difficult to know which plans to choose. Fortunately, resources are available to provide free advice and assistance so that people eligible for Medicare can make informed choices.