Options available for medical coverage

Joe Cameron, 78, pays the same monthly premium for health insurance through a Medicare Advantage HMO that he would pay for Medicare Part B alone — and he doesn't need a Medicare-supplement policy and separate prescription-drug coverage.

Cameron suffered a massive heart attack five years ago. His medical bills totaled more than $1.3 million — but he paid only $2,300 out of pocket. He now requires medications that could cost him more than $900 per month. But with generic substitutes and the coverage provided by his UnitedHealth SecureHorizons plan, his monthly cost is about $120.

Many Medicare Advantage plans, which are private health plans that are heavily subsidized by the federal government, bundle medical and drug coverage for no more than the cost of Medicare Part B alone ($93.50 to $161.40 per month in 2007, depending on your income).

To get comparable coverage with traditional Medicare, you'd have to pay for Part B as well as a separate medigap policy and a prescription-drug plan — which could cost you $2,000 more each year.

The least-expensive Medicare Advantage plans tend to be traditional HMOs, which limit you to in-network doctors and hospitals. But many people have the option to enroll in preferred-provider plans, which allow you to go outside the network. Your premiums and co-pays will probably be higher than with an HMO, especially if you use a doctor or hospital that's not a preferred provider.

A still more flexible — but more expensive — option is the new, private fee-for-service Advantage plan, which lets you use any doctor or hospital that accepts Medicare throughout the country. To find out your options and calculate your potential out-of-pocket costs for both Medicare Advantage and traditional Medicare plus medigap and Part D coverage, use the Medicare Options Compare tool at www.medicare.gov/mppf. Most insurers also have calculators on their Web sites.

If you are already covered by Medicare with Part D prescription-drug coverage, you had until March 31 to choose a Medicare Advantage plan with drug coverage. If you are turning 65 this year, you have a seven-month window — three months before and three months after the month you turn age 65 — to sign up, regardless of the time of year.

Medicare Advantage premiums are so low because of those generous government subsidies. In fact, since the passage of Medicare Part D, the government pays more per Advantage beneficiary than it does for each traditional Medicare recipient.

Congress may try to reclaim the money paid to private insurers. But if you sign up now, you're at least assured of a good deal for the coming year. And if the government does reduce subsidies and insurers pull out of the program, you can still enroll in traditional Medicare.