Medicare in Vermont

Medicare is a federal health insurance program that provides coverage for individuals aged 65 and older and younger citizens with qualifying disabilities. Its primary components are Parts A and B, the former concerned with critical services and the latter with outpatient care. Part A’s benefits include emergency care, inpatient treatments and skilled care within nursing homes and the beneficiary’s home. Part B grants access to outpatient care services, diagnostic testing, medical transportation and essential medical supplies and equipment. Part A is free for almost everyone who meets the eligibility criteria, while Part B has a monthly premium of $164.90. As of 2021, Medicare costs the state of Vermont approximately $1.15 billion per year.

Medicare Advantage, known as Part C, combines the services provided by Parts A and B, except hospice care. There are 25 plans available in Vermont in 2023, with premiums starting at 0%. However, as seniors often add benefits, such as dental, vision and meal delivery, the state’s median monthly premium is $18.43. Medicare Part D covers costs for prescription drugs. As these vary between people, so does the premium, because factors such as prescribed medications and the tier levels of those drugs influence costs. To mitigate out-of-pocket expenses, including deductibles and copayments, beneficiaries can purchase a Medicare Supplement Plan, commonly known as Medigap.

While the Centers for Medicare and Medicaid Services (CMS) run Original Medicare, approved private insurance companies manage Medicare Advantage. As of July 2023, 31% of Vermont’s eligible residents have enrolled in a plan, which is below the national average of 48%. However, this shows a 4% increase from the previous year, suggesting there is a gradual move toward Part C in the state. As confirmation of this, another 2.89% of Vermont’s citizens became eligible for Medicare Advantage in 2023, with 14.07% more than last year deciding to enroll. 

This guide contains a review of the medical insurance options offered to Vermont’s older residents. It also includes information on how to tailor coverage to fit needs. Additionally, it explores the various resources in Vermont that help seniors make more informed choices about health insurance.

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)

As Original Medicare is standard nationwide, beneficiaries can obtain the same services, regardless of where they are in Vermont or the country. However, if they get ill outside the U.S., Medicare is unlikely to cover their costs. Consequently, the U.S. Department of State strongly recommends citizens visiting foreign countries take out health insurance appropriate to their destination.

Under this program, seniors pay for their health services upon receipt. Medicare covers 80% of the eventual costs, and the recipient covers the remaining 20%. As of 2023, Part A’s annual deductible is $1,600, and Part B’s is $226.

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’s appeal is in offering choice, compared to Original Medicare’s fixed coverage. Consequently, beneficiaries are more likely to find a plan that meets their specific needs. There are five types of Medicare Advantage Plans:

• Health Maintenance Organization (HMO)
• Preferred Provider Organization (PPO)
• Private Fee-for-Service plans (PFFS)
• Special Needs Plans (SNPs)
• Medicare Savings Account (MSA)

Each plan caters to seniors with different needs, such as those looking for a greater network of health care providers and individuals content with a limited network. Numerous factors determine the premium, including the options the senior chooses and their general health when they apply.

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 Medicare Advantage Plans in Vermont

The table below lists the 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 August 2023. 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 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 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.