Medicare is designed to cover the costs of a wide range of health care services and items most commonly needed by seniors. Although it did not initially do so, Medicare now allows recipients to choose how they receive coverage – through Original Medicare or through certain private health insurance companies which are contracted to Medicare.
This is great news, because you and your health are simply not the same as someone else’s. (And, let’s face it, not the same as a decade or so ago.) Having more choices makes it easier to find coverage that meets your specific needs and preferences.
You can change your mind, too. Just as with any private health insurance, there is an open enrollment period each year. (Medicare open enrollment ends the first week of December). During this time, you can review your current coverage and costs in terms of your current health status, then decide if you want to keep your current plan or change to another one that offers more or different benefits. Medicare makes changes and upgrades to Original Parts A and B each year, and Medicare Advantage providers also make changes to their coverage offerings and costs.
Original Medicare is divided into two parts that categorize different types of care:
Part A – Hospital Insurance
This part of Medicare covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some types of home health care services. There is no monthly premium for Medicare Part A, but you will still have out-of-pocket expenses for copays and deductibles.
Part B – Medical Insurance
This part of Medicare covers things like certain doctors' services, outpatient care, and medical supplies as well as certain preventive services. You must pay a monthly premium for Part B. There are also deductibles that apply, so you’ll have to pay up to those amounts, and there are copays (20% of the Medicare-approved amount, once you’ve met your deductible).
Original Medicare allows you to use any doctor or hospital you want, anywhere in the US. However, it’s important to note that not all health care providers (physicians, hospitals, etc.) accept Medicare insurance. You’ll need to ask. Even if they do, just as with any other insurance, if Medicare doesn’t pay the provider’s entire charges, you will be responsible for the difference. There is no cap on out-of-pocket expenses.
Part D – Optional Drug Coverage
Original Medicare does not include prescription drug coverage, but there is a separate Medicare plan called Part D that does. It also covers the cost of many shots and vaccines commonly recommended for seniors. If you choose to sign up for Part D, you will pay an additional premium based on the specifics of your coverage.
You can learn more about Original Medicare here.
Medicare Advantage Plans
These alternatives to Original Medicare cover Parts A and B and, usually, Part D as well, so they are sometimes referred to as bundled plans. Many major health insurance providers offer Medicare Advantage Plans. They are called “advantage” because most of them cover a broader range of services than Original Medicare, and their out-of-pocket costs are often lower. With the right plan you can get coverage for:
- Vision exams and eyewear
- Hearing exams and aids
- Dental services
- Chiropractic services
- Podiatric services
- Transportation to visit your doctor
- Certain over-the-counter drugs such as calcium and vitamin D prescribed for women to prevent or treat osteoporosis
Many Medicare Advantage plans also include valuable senior-specific wellness programs such as Silver&Fit membership or free at-home fitness kits. In addition, some offer custom-tailored coverage for those who have a chronic illness. Because these plans are offered by private insurers, they can be more restrictive than Original Medicare. For example, you will very likely have to use providers within their network and follow other rules such as getting a referral to see a specialist or determining what happens if you use an out-of-network provider.
If you choose a Medicare Advantage Plan, the provider (XYZ Insurance Company) becomes your official insurance carrier. You’re still “on” Medicare, just through a third party. Medicare pays Advantage Plan providers a fixed monthly amount for the services they provide, but the providers can also charge you a monthly premium to offset costs of their expanded coverage, lower out-of-pocket or deductible requirements, etc. On the other hand, unlike Original Medicare, there is a limit on out-of-pocket costs for Part A and Part B services when you have a Medicare Advantage Plan. If you reach that limit, you won’t have to pay more for the remainder of the year
But wait! Despite the extras, many providers charge a premium of $0. So you won’t pay any more than you would for Original Medicare, but you could receive numerous additional benefits and save money, too. Plan details change from year to year, but the Medicare open enrollment period applies across the board, so you can re-evaluate your plan and compare it to others annually to ensure the coverage you choose aligns with your current health care needs and personal desires.
You can learn more about Medicare Advantage Plans in general online. Want to see what plans are available in your area? Use this link.