Medicare is the federal government program that gives you health care coverage (health insurance) if you are 65 or older, or under 65 and have a disability, no matter your income. When you pay taxes on your income, part of the money goes toward Medicare. Medicare has different parts that cover inpatient services, outpatient services, and prescription drugs at the pharmacy.
Unless you make another choice for how to get your benefits when you become eligible for Medicare, you will have Original Medicare, the traditional program offered directly through the federal government. In Original Medicare, you are covered to go to just about any doctor or hospital in the country.
As an alternative, you may choose to get your Medicare benefits from a Medicare Advantage plan such as an HMO or PPO. These plans must offer at least the same benefits as Original Medicare but can have different co-pays, deductibles, and rules. They can also offer additional benefits.
If you are still working, you may choose to continue coverage with your employer. The key is that there are multiple choices on how to receive your coverage under Medicare. It’s important that you understand your choices and make the best decision on how to receive your coverage under Medicare.
There are four parts to Medicare: Part A, Part B, Part C and Part D.
Original Medicare is made of two parts: Part A and Part B. Most people are covered by Original Medicare which is administered directly by the federal government.
Part A is Hospital Insurance and covers most medically necessary hospital, skilled nursing facility, home health and hospice care. It is free if you or your spouse has worked and paid Social Security taxes for at least 40 calendar quarters. If you haven’t, you will have to pay a monthly premium for Part A coverage.
Part B is called Medical Insurance and covers doctors’ services, preventive care, durable medical equipment, hospital outpatient services, home health care, laboratory tests, x-rays, mental health care, and more. You pay a monthly premium for this coverage based upon your income.
Medicare Part C
Medicare Part C is not a separate benefit under Medicare but a way for Medicare Beneficiaries to have more choices on how to receive their Medicare coverage. Under Part C private health insurance companies contract with the federal government to provide Medicare benefits. They provide this coverage under plans known as Medicare Advantage Plans. If you want, you can choose to get your Medicare coverage through a Medicare Advantage plan instead of Original Medicare.
Medicare Advantage plans must offer at least the same benefits as provided under Parts A and B of Original Medicare. These plans are offered with low monthly premiums and replace the need for you to purchase a Medicare Supplement Plan. Many also include your Part D Prescription Drug coverage inside of the plan.
Medicare Part D – Prescription Drug Coverage
Medicare Part D is the Prescription Drug coverage under Medicare. Part D drug plans are only available through private insurance companies who contract with the federal government for this purpose. If you are covered under Medicare, you must buy a Part D plan when you begin Part B coverage or you may be subject to a penalty when you do purchase a plan.
It’s also important to make sure that you purchase a plan that works with your basic coverage. If you use Original Medicare, than you will want to buy a stand-alone Prescription Drug plan. However, if you use a Part C plan such as a Medicare Advantage plan, that plan may have Prescription Drug coverage built right into the plan.
A Medicare Supplement (often called a Medigap policy) is an insurance plan that you can buy from a private insurance company to fill in the gaps in Original Medicare coverage by paying for your Medicare deductibles, coinsurances and copayments. Depending on where you live, you have up to 10 different Medigap plans to choose from, A, B, C, D, F, G, K, L, M, N (Wisconsin, Massachusetts, and Minnesota have different types of plans available). Each offers a different set of benefits. Premiums vary, depending on the plan you choose and the company you buy it from.
Medical Advantage Plan
A Medicare Advantage Plan is the kind of Medicare health plan offered by private companies that contracts with Medicare to provide Part A and Part B benefits.
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