Understanding Medicare Basics

There are so many questions about Medicare! The material presented below will help you understand Medicare basics and answer questions.

Medicare is a Federal Health Insurance Program for:

  • People age 65 or older

  • People under the age of 65 with specific disabilities

  • People of all ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant)

Medicare Part A and Part B are known as Original Medicare and are run by the Federal government. Medicare Advantage (Part C) and Medicare Prescription Drug Coverage (Part D) are sold by private insurance companies.

Medicare Supplement (Medigap) insurance is designed to fill in the gaps that Original Medicare does not cover. Medigap is not a part of the Federal Medicare program. Instead, private insurance companies sell it.

Hospital Insurance
Part A 

Part A covers inpatient hospital care, inpatient care in a skilled nursing facility, hospice care services, and home health care services.

Part A allows you to use any doctor, specialist, or hospital that accepts Medicare. You do not need a referral but deductibles, copayments, or coinsurance may apply for each provided service.

Most people age 65 or older don’t have to pay a monthly payment (called a premium) for Part A because the individual or their spouse paid Medicare taxes while they were working (40 or more quarters of Medicare covered employment)

Medical Insurance Part B  

Part B covers medically-necessary doctors’ services, outpatient care, home health services, durable medical equipment, and other medical services.  Part B also covers many preventative services.

Like Part A, Part B allows you to use any doctor or specialist accepting Medicare. Just like Part A, referrals are not required.

As a basic rule, most people age 65 or older pay the standard monthly Part B premium.

Supplement Plan (Medigap Plan) Basics

A Medigap Plan helps to fill the gaps (such as deductibles, copayments/coinsurances, and excess charges) in Parts A and B of Original Medicare.

Medigap is a health policy sold by private insurance companies that are licensed within your state. The payments are made after Medicare has paid its share of the bill.

Medigap benefits include some extra benefits not covered by Original Medicare, such as foreign travel emergency.

Drug Plan Part D 

Medicare Prescription Drug Plan helps to lower the cost of most generic and many commonly used brand name prescription drugs.

You may enroll in stand-alone Prescription Drug Plan (PDP), which are run by private insurance companies that have been approved by Medicare. Alternatively, you may enroll into the Advantage plan that normally includes PDP.

All Prescription Drug Plans must have at least a standard level of coverage set by Medicare, but each plan can vary in cost to you and the drugs covered.What are Medicare Advantage Plans (Part C plans)?

Instead of enrolling in Original Medicare (Part A and Part B), you may decide to join in a Medicare Advantage Plan, also known as Part C plan.

Medicare Advantage plans are offered by private insurance companies, and must be approved by Medicare. Part C Plans are available in all 50 states. They are not fee for service plans, such as original Medicare. Instead, Medicare pays a fixed amount every month to insurance companies for the enrolled members regardless of whether or not members used the services.

What are Medicare Advantage Plans (Part C plans)?

Instead of enrolling in Original Medicare (Part A and Part B), you may decide to join in a Medicare Advantage Plan, also known as Part C plan.

Medicare Advantage plans are offered by private insurance companies, and must be approved by Medicare. Part C Plans are available in all 50 states. They are not fee for service plans, such as original Medicare. Instead, Medicare pays a fixed amount every month to insurance companies for the enrolled members regardless of whether or not members used the services.

Why Enroll in a Part C Plan?

Part C plans benefits often include extra coverage, such as:

  • Vision

  • Hearing

  • Dental

  • Health and wellness programs

Part C plans can come as Medical only (MA), or may include Prescription Drug Coverage (MAPD).

There are multiple types of Medicare Advantage Plans available:

  • HMO plans

  • PPO plans

  • PFFS plans

  • Medical Savings Accounts (MSA) plans

  • Special Needs (SNP) plans