Why is Medicare Different in Each State?

You may have noticed that Medicare is not the same everywhere. Plans are different. Costs are different. And, benefits are different, too.

In this article, we’ll explain the differences in Medicare, and how you can get the most Medicare possible, no matter what state you’re in.

Does it Matter What State You Live in for Medicare?

Yes.

Although we are all guaranteed the same core Medicare benefits for inpatient careInpatient care refers to care provided in a hospital or other inpatient facility. Inpatients are admitted and stay at least one night depending on their condition. and medical care, where you live matters. In fact, it matters a lot.

Since its inception, Medicare has always had private insurance company involvement. At first, it was just Medicare Supplement InsuranceMedicare Supplements are additional insurance policies that Medicare beneficiaries can purchase to cover the gaps in their Original Medicare (Medicare Part A and Medicare Part B) health insurance coverage. (Medigap). Then, after the Medicare Modernization Act was passed, we got Medicare Advantage plansMedicare Advantage (MA), also known as Medicare Part C, are health plans from private insurance companies that are available to people eligible for Original Medicare (Medicare Part A and Medicare Part B). and Medicare prescription drug plansMedicare Part D plans are an option Medicare beneficiaries can use to get prescription drug coverage. Part D plans provide cost-sharing on covered medications in four different phases: deductible, initial coverage, coverage gap, and catastrophic. Each....

Although Medicare regulates what private health plans must include, it does not regulate their monthly premiumsA premium is an amount that an insurance policyholder must pay for coverage. Premiums are typically paid on a monthly basis. In the federal Medicare program, there are four different types of premiums. , out-of-pocket costsOut-of-Pocket Costs for Medicare are the remaining costs that are not covered by the beneficiary's health insurance plan. These costs can come from the beneficiary's monthly premiums, deductibles, coinsurance, and copayments., or the delivery of healthcare services. This allows insurance companies to create plans that best serve local populations, and allow them to compete.

You might be surprised to learn that Medicare Advantage plans are not available everywhere. In fact, there are more than 200 counties that have no plans available at all, including the entire state of Alaska.

Does My Medicare Coverage Change If I Move to Another State?

No. We are all guaranteed the same coverage.

The federal government guarantees that all of the services and benefits available in Medicare Part AMedicare Part A is hospital coverage for Medicare beneficiaries. It covers inpatient care in hospitals and skilled nursing facilities. It also covers limited home healthcare services and hospice care. and Medicare Part BMedicare Part B is medical coverage for people with Original Medicare benefits. It covers doctor visits, preventative care, tests, durable medical equipment, and supplies. Medicare Part B pays 80 percent of most medically necessary healthcare services. are available to beneficiaries no matter what. Where you live does not matter. And how you choose to receive your benefits does not matter.

However, if you qualify for both Medicare and MedicaidMedicaid is a public health insurance program that provides health care coverage to low-income families and individuals in the United States., where you live could make a difference. Unlike Medicare, Medicaid is a joint state and federal program. Each state determines its own level of funding.

Many states that expanded their Medicaid funding under the Affordable Care Act (Obamacare) offer Medicaid beneficiaries more benefits, such as coverage for routine dental, vision, and hearing.

As a result, we now see more Medicare Special Needs Plans (SNPs), for dual-eligibleDual-eligible beneficiaries are those who receive both Medicare and Medicaid benefits. It includes beneficiaries enrolled in Medicare Part A and/or Part B while receiving full Medicaid and/or financial assistance through a Medicare Savings Program.... individuals, in the states that expanded their Medicaid programs. We have a tool that allows you to find and compare Special Needs Plans available in your area.

Is Medicare Run By Each State?

No.

Both Medicare and Medicaid are run by the same federal agency, the Centers for Medicare & Medicaid Services (CMS).

Why Aren’t Medicare Plans Available Everywhere?

By law, CMS can regulate private health plans, but it can’t mandate that insurance companies offer plans.

Most health plans use provider networks to deliver care to their members. When a pool of providers does not exist, it isn’t possible to create a provider network for Medicare coverage.

Why Do Medicare Advantage Plan Costs Vary So Much?

In a word, competition.

In large metro area, there are more plan vying for members. As a result, both monthly premiums and maximum out-of-pocket limits are lower.

For example, in Los Angeles County, the average monthly premium is just $5.45 per month and the average maximum out-of-pocket (MOOP) limit is $2,552 per year (2023 rates). Compare this to one of California’s most rural areas, Sierra County, where the average premium is $43.50 per month and the average MOOP is $6,100 per year.

When it comes to Medicare Advantage plans, Medicare beneficaries in large counties have the advantage.

Why Don’t All Areas Have 5-Star Medicare Advantage Plans?

Medicare Advantage plans are not the same everywhere.

Most Medicare Advantage plan organizations are local, not national. And, all Medicare Advantage plans, with the exceptionIn a Medicare Part D plan, an exception is a type of prescription drug coverage determination. You must request an exception, and your doctor must send a supporting statement explaining the medical reason for the... of Medicare Cost plans and Medicare Savings Account plans have local provider networks. Provider networks play a huge part in people’s perception of plan quality.

This is one of the reasons that Kaiser Permanente is consistently rated the best plan in the country. Kaiser’s provider network is mostly made up of healthcare professionals that work directly for Kaiser. This gives Kaiser more control over its quality control processes.

Larger, nationwide health insurance companies, like UnitedHealthcare (UHC), do not own their hospitals and and healthcare centers. That said, UHC has made exceptional improvements in its quality control processes, which shows in its latest Medicare Advantage plan 5-star scores.

Use the following tool to find 5-star plans where you live.

Are There Premium-Free Plans Everywhere?

Only Medicare Part A is available premium-free everywhere. If you worked and paid Medicare taxes for a minimum of 40 quarters, you don’t pay a premium for Medicare Part A.

Everyone, in all states, pays a Medicare Part B premiumThe Medicare Part B premium is the monthly charge paid by beneficiaries for their outpatient medical care, services, and supplies. A beneficiary's premium may be uplifted by an IRMAA surcharge if their income is above..., even if you have Medicare Advantage or a Medigap plan. Some low-income individuals qualify for premium assistance through the Medicare Savings Program.

Some areas have Medicare Advantage plans that do not charge an additional premium. An, although there are some cheap Medicare Supplements, there are no free Medicare Supplements.

Does a Medicare Supplement Insurance Plan Work Everywhere?

Yes. Everywhere you have Medicare coverage, you also have coverage from your Medigap plan.

Medicare covers you in all 50 states and all U.S. territories. However, it does not cover you outside of the USA or its territories.

Some Medigap plans offer foreign travel emergency coverage. The most common plans that cover you abroad include Plan F, Plan G, and Plan N. The following chart shows what each plan covers:

Can I Keep My Medigap Plan If I Move?

Yes. In most cases you can keep your current Medicare Supplement plan, even if you move to a new state.

There are no federal or state laws that allow a private insurance company to cancel you Medicare Supplement insurance if you move from the state where it was purchased. However, your new state may have better rates or better protections.

Moving from one state to another can have a significant impact on how much you pay for your Medigap plan. It can also have an impact on your right to buy a different policy. Some states have enacted annual Medicare Supplement open enrollment rules that allow an annual change, known as the birthday rule, but most don’t.

Likewise, eight states have laws that do not allow Medicare Part B excess charges. These are additional charges that people with Original MedicareOriginal Medicare is private fee-for-service health insurance for people on Medicare. It has two parts. Part A is hospital coverage. Part B is medical coverage. pay if a doctor does not accept Medicare’s standard rates. In these few states, it is not as important to have a Medigap plan that covers excess chargesA Medicare Part B excess charge is the difference between a health care provider’s actual charge and Medicare’s approved amount for payment., such as Plan F, Plan C, or Plan G.

What About Medical Underwriting?

Original Medicare beneficiaries do not have to worry about medical underwriting. Your Medicare Part A and Part B benefits cannot be denied due to pre-existing conditionsA pre-existing condition is any health problem that occurred before enrolling in a health plan. The Affordable Care Act law made it illegal for health plans to or charge more due to a pre-existing condition..... And, the federal government prohibits Medicare Advantage plans and Medicare prescription drug plans from denying coverage due to health conditions, as well.

However, medical underwriting is allowed with Medigap insurance. Unless you have Medigap protections, specifically a guaranteed issue rightGuaranteed-issue is a right granted to Medicare beneficiaries and applies to Medicare Supplement insurance (aka, Medigap plans). All states and the federal government enforce this essential right, which protects Medicare beneficiaries from medical underwriting., you can be denied a Medigap policy. Or, you may have to pay higher premiums or have a waiting period.

Medigap beneficiaries only have a guaranteed issue right when they first sign up for Medicare Part B (6-month period) and under special circumstances.

Medicare grants a Special Enrollment PeriodSpecial Enrollment Periods (SEPs) allow beneficiaries to change their Medicare Advantage and Part D plans due to a special circumstance. Common reasons for a SEP include moving, losing employer coverage, and Medicaid eligibility, to name... (SEP) to individuals for special circumstances. One of those circumstances is when you move outside of your current Medicare plan’s service area. An SEP can apply to Medigap policies, Medicare Advantage plans, and Medicare Part D plans.

Does Moving Affect My Medicare Part D Plan?

Moving can potentially have a big impact on your Medicare prescription drug plan.

If you have either a Medicare plan that includes Part D, or a stand-alone Medicare prescription drug plan, and you move out of the plan’s service area, you will need to switch plans.

Most Medicare Advantage plans include Part D benefits. So, if you move out of the plan’s service area, you will need to switch plans.

Most stand-alone Part D plans are national plans. However, some are regional. Regardless, what you pay at the pharmacy will likely be impacted, even if you are able to keep the same plan.

All prescription plans have arrangements with their preferred pharmacy for prescription drugs. These arrangements control pricing, which can vary widely from zip code to zip code.

What If I Have Limited Income?

Individuals with limited income may be affected by a move. Average premiums on both Medicare Advantage plans and Part D plans vary by state.

Also, Medicare enrollees who qualify for Medicaid may be affected. Social Security benefits do not change, including the Extra HelpSocial Security's Low-Income Subsidy (LIS) program helps Medicare beneficiaries pay for their Medicare Part D prescription drugs by paying some of the costs. Also known as "Extra Help", beneficiaries who qualify for LIS receive premium... Program, but the availability of Specicial Needs Plans in most states is highly dependent on where you live. A licensed insurance agent can tell you if you qualify for certain programs and help you find Medicare plans or additional coverage.

Use the following tool to find SNP plans where you live.