In addition to the original Medicare Parts A and B for hospital and medical coverage, seniors' choices for health insurance include various types of Medicare Advantage plans, Part D prescription coverage and lesser-known plans such as Medicare cost plans. If you use original Medicare, you can also purchase Medicare supplemental insurance.
Original Medicare includes Part A hospital coverage plus Part B medical coverage. Part A is premium-free for most people, but seniors at most income levels pay $104.90 per month as a Part B premium.
With original Medicare A and B, you get coverage directly from Medicare, and you can choose you own doctors and health care providers as long as they accept Medicare. However, you usually have to pay a deductible and coinsurance for services.
Common Advantage Plans
Medicare Advantage, called Plan C, is available through private insurance companies. At a minimum, Advantage plans include Plan A and Plan B hospital and medical coverage, but many also include prescription coverage and additional benefits, such as vision or dental.
The most common Advantage plans are health maintenance organizations, or HMOs, which typically limit you to doctors and providers in the plan's network. Plan members usually pay a $104.90 monthly Plan B premium plus an Advantage premium, and some plans have other costs, such as copayments. The insurance companies establish the premiums and fees for all Advantage plans.
Other Advantage Plans
The second most-common type of Advantage plan is the Preferred Provider Organization, or PPO. PPO plans pay a higher percentage of your health care costs if you use in-plan providers than if you go outside. Most of these programs include prescription insurance.
Another type of Advantage plan is the private fee-for-service plan, or PFFS. The insurance company determines how much it will pay for each treatment and what your share is. Some plans allow you to choose any provider.
Special needs plans, or SNPs, are Medicare Advantage plans for people with particular health problems, such as end-stage kidney disease or diabetes. They include prescription coverage.
An HMO point of service plan, or HMOPOS, is a special type of HMO that permits the use of providers outside the network, but at an additional cost to the insured.
A Medical Savings Account or MSA plan is high-deductible health care insurance that also includes a savings account. The plan makes regular deposits into your medical savings account, and you can use the balance toward paying the deductible.
Prescription coverage, or Part D, is an add-on for original Medicare. You get Part D insurance from private insurance companies that have an agreement with the government, and most plans charge a monthly premium.
If you have hospital and medical insurance through Medicare Advantage, you're usually required to get Part D coverage through your Advantage plan.
Other Health Plans
Additional Medicare plans are available that differ both from original Medicare and from Advantage plans. Some of these plans include both Part A and B coverage, but most of them only offer Part B medical. Some include prescription coverage. The costs of these plans vary and are determined by the insurance companies that offer them.
Medicare cost plans, available only in some locations, combine coverage through an insurance company with government insurance. These plans come in different varieties. Some cost plans include both Plan A and Plan B coverage and allow you to receive coverage under original Medicare if you use out-of-network providers. Other cost plans include only Part B, so you receive Part A and Part D through original Medicare.
The Program of All-inclusive Care for the Elderly, PACE, aims to meet the needs of elderly patients comprehensively. It includes services such at-home care, adult day care, lab services, physical therapy and Part D prescription coverage.
Medicare pilot programs and demonstrations are special research projects testing new ways to offer Medicare. They are typically available in limited areas and for limited time periods.
Medicare also offers medication therapy management programs, or MTMs, to help people with Part D coverage learn how to manage their prescriptions.
People with original Medicare Parts A and B can purchase a supplemental policy, or Medigap, from a health insurance company. Supplemental insurance isn't available for Advantage plans or for a Medicare Medical Savings Account.
As secondary insurance, Medigap pays some of your out-of-pocket costs with original Medicare, such as your deductible, coinsurance and copayments. First Medicare determines the approved cost and pays its share, and then Medigap pays its portion. New Medigap policies require you to purchase Part D separately. You must pay a Part D premium in addition to the Medigap premium and Part B premium.
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