Most people have heard of Medicare: a nationally mandated health insurance plan designed by the government beginning in 1966 under the Social Security Administration aimed primarily at Americans aged 65 years and up. However, you may not realize that there are several different kinds of Medicare plans, and they vary in terms of both the services offered and the administrators who manage the plan. The following is a refresher on the basics of the different plans out there, and the distinct benefits offered by each one.
The Original Medicare Plan
As its name indicates, this is the main service plan offered by the federal government. Under the rubric of the Original Medicare Plan, most people have a combination of what is colloquially referred to as Part A and Part B benefits. There is also the option of adding a Medicare Prescription Drug Plan, and then purchasing a Medigap or supplemental policy. Medicare Advantage plans are HMO or PPO, which offer parts A and B coverage. So, without further ado, let’s look into each part and see what distinguishes them from the other.
Medicare Part A
Medicare Part A covers inpatient hospital care and is offered to those who paid Medicare taxes while working. For most, it is not necessary to pay a monthly premium for the coverage. Furthermore, Medicare Part A is available for medical emergencies such as blood transfusions, home health services, hospice care, hospital stays and even skilled nursing facility care — provided that recipients meet some key criteria.
Medicare Part B
Medicare Part B is optional and requires that people who enroll pay a monthly premium. Additionally, copayments and deductibles may apply to these services. Medicare Part B goes the extra mile by covering services that Medicare Part A doesn’t, such as outpatient care and doctors’ services that are also preventative in nature.
Medicare Part C, or Advantage Plus
Medicare Advantage Plans are offered by private companies and approved by Medicare. This includes, but is not limited to the Medicare insurance plans from Independence Blue Cross, which is offered to people still on Medicare. Medicare Advantage Plans provide the same coverage as Part A and Part B. Some service providers also offer extra benefits such as Part D prescription drug coverage.
Part D Prescription Drug Coverage
Medicare Part D offers prescription drug plans from private companies that are approved by Medicare. Prescription Drug Coverage is optional and members who wish to receive the benefits must pay a monthly premium. Also, it is important to note that different plans have different options based on cost, drug coverage, and convenience.
Also known as Medicare Supplemental Insurance is basically health insurance sold by private companies to fill in the gaps of the Original Medicare Plan. Individuals who sign up for this pay the private insurance company a monthly premium for their Medigap policy in addition to the monthly Part B premium that they pay to Medicare.
Public vs. Private
It should be clear from the points above that Medicare is essentially a public program with a few “add-ons” that can be purchased via private entities. This has become somewhat of a double-edged sword since the federally mandated option — which is now about fifty-four years old — has become diluted and is at the mercy of a few private insurance companies that tout extra benefits but at high premiums, driving up the costs of these services all across the board. The public option is the right of anyone who fits the criteria mentioned, and should not be disregarded. At the same time, some insurance companies do provide great services that take some weight off of the consumer’s shoulders — especially if they are the sort of plans offered by employers. While most people who are on Medicare would have ostensibly stopped working, there are many nowadays who continue to work for a variety of reasons, good insurance being one of them. At the end of the day, it all comes down to having options and being able to figure out what can easily be found at your fingertips.
As with everything else, it is imperative for one to shop around and research the best plans available. Even though Medicare seems like a one size fits all policy, it isn’t, and people sign up for services depending on their financial means and their immediate health needs.