Medicare in New Jersey

Medicare is a federal health insurance program that provides coverage for adults aged 65 and older and younger people with qualifying disabilities. Original Medicare has two parts: Part A and Part B. The former is free for most people and covers essential services, such as emergency care, inpatient treatment, skilled nursing care and home health services. As of 2023, the premium for Part B is $164.90 per month, which pays for outpatient care, diagnostic tests, medical transportation and medical supplies and equipment. The latest published data for the cost of Medicare to the state of New Jersey are for 2021, revealing it to be just over $13.3 billion.

Medicare Advantage, or Medicare Part C, combines the benefits of Original Medicare, minus hospice care, into one plan. Different plans offer extra cover, such as dental, vision and prescription drugs. Medicare Part D specifically covers prescription drugs for beneficiaries of Original Medicare and Medicare Advantage recipients whose plans don’t include this benefit. Several factors determine the premium, including an enrollee’s prescriptions and the tiers of their medications. To reduce out-of-pocket expenses such as deductibles and copayments, beneficiaries can purchase a Medicare Supplement Plan, known as Medigap.

Unlike the federally-run Original Medicare, approved private insurance companies offer Medicare Advantage. As of July 2023, 39% of eligible seniors in New Jersey have purchased one of their plans. This figure is a 2% increase from 2022, although still below the national average of 48%. The number of seniors eligible for Medicare Advantage in New Jersey rose by 2.75% between 2022 and 2023, but the rate of adoption rose by 5.41%, suggesting seniors are moving toward this option. The total number of New Jersey residents eligible for Medicare in 2023 is just over 1.7 million — an increase of almost 60,000 from the previous year.

Seniors will find in this guide a comprehensive exploration of their medical insurance options in New Jersey. It also includes particulars on how to personalize coverage and where to go for additional information and assistance.

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 nationwide by the Centers for Medicare & Medicaid Services (CMS). Beneficiaries can access the same services anywhere in New Jersey and the country, including when they’re vacationing or moving to a new state. However, Medicare rarely pays for health services outside the country, so seniors will need to source insurance suitable for their destination.

Medicare Part A’s annual deduction in 2023 is $1,600 per benefit period, while Part B’s deductible is $226. Once the senior reaches these figures, Medicare covers all further eligible medical expenses at 80% — the remaining 20% being covered by the beneficiary.

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 is a more flexible alternative to Original Medicare. The primary advantage is it can offer plans that are more in line with seniors’ specific needs, so they only pay for what they’re getting.

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)

As each plan is different, so are the eligibility requirements, deductibles, co-payments, network providers and access to specialists. Additionally, the senior’s health at the time of application is a determining factor in the size of the premium.

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 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 August 2023 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 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 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.