Paul Sanchez
Medicare is federal health insurance for anyone aged 65 and over and some people under 65 with certain disabilities. There are two main ways to get Medicare coverage: Original Medicare and Medicare Advantage. Original Medicare includes Part A (Hospital Insurance) and Part B (Medical Insurance), and you can choose to add drug coverage by joining a separate Medicare drug plan (Part D). Medicare Advantage Plans (Part C) are offered by Medicare-approved private companies and typically include Part D coverage. They may also include additional benefits such as prescription drug coverage (Part D), but you may have to use doctors within the plan's network. When considering whether insurance is a Medicare replacement, it is important to understand the different parts of Medicare, the coverage options available, and how they can be combined with supplemental insurance plans.
| Characteristics | Values |
|---|---|
| Medicare type | Original Medicare includes Part A and Part B. Medicare Advantage (Part C) is an alternative to Parts A and B that bundles several coverage types, including Parts A, B, and usually D. |
| Coverage | Medicare Advantage Plans include drug coverage (Part D). |
| Availability | Insurance companies can decide to offer a plan in a specific state or only in certain counties. |
| Cost | The cost of Medicare Advantage Plans varies by provider. |
| Medicare Supplement Insurance (Medigap) | Medigap policies are standardized, and in most states named by letters, like Plan G or Plan K. The benefits in each lettered plan are the same, no matter which insurance company sells it. |
| Eligibility | Medicare is federal health insurance for anyone age 65 and older, and some people under 65 with certain disabilities or conditions. |
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What You'll Learn
Medicare Advantage Plans (Part C)
Medicare Advantage Plans, sometimes called "Part C" or "MA Plans", are offered by private companies approved by Medicare. These plans provide all of your Part A (Hospital Insurance) and Part B (Medical Insurance) coverage. Medicare Advantage Plans may offer extra benefits, such as vision, hearing, dental, and/or health and wellness programs. Most include Medicare prescription drug coverage (Part D).
Medicare pays a fixed amount for your care every month to the companies offering Medicare Advantage Plans. These companies must follow rules set by Medicare. However, each Medicare Advantage Plan can charge different out-of-pocket costs and have different rules for how you get services. For example, you may need a referral to see a specialist, or you may have to go to doctors, facilities, or suppliers that belong to the plan.
All Medicare Advantage plans require that you continue to pay your Part B insurance premium. You might also have to pay a separate monthly insurance premium for your Medicare Advantage plan. Some plans have deductibles, and a copayment may apply to specific services, such as doctor office visits. All Medicare Advantage plans have an annual limit on your out-of-pocket expenses to ensure predictability for your budget, which is a feature not available through Original Medicare.
Before joining a Medicare Advantage Plan, talk to your employer, union, or other benefits administrator about their rules. In some cases, joining a Medicare Advantage Plan might cause you to lose your employer or union coverage. If you drop or lose employer or union coverage for yourself, you may also lose coverage for your spouse and dependents.
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Medicare Supplement Insurance (Medigap)
Medicare Supplement Insurance, also known as Medigap, is extra insurance that you can purchase from a private health insurance company. This insurance helps cover out-of-pocket costs associated with Original Medicare (Part A and Part B). It is important to note that Medigap is not a replacement for Medicare but rather a supplement to it. Generally, you must have Original Medicare, including Part A and Part B, before you can buy a Medigap policy. Medigap policies are standardized, and the benefits offered by each lettered plan, such as Plan G or Plan K, are the same across different insurance companies. The price is usually the only differentiating factor between policies with the same letter sold by various companies.
Medigap policies help cover your share of costs in Original Medicare, but they do not cover everything. Typically, Medigap does not cover long-term care, such as nursing home stays, vision, dental, hearing aids, private-duty nursing, or prescription drugs. However, some Medigap policies provide coverage for medical emergencies when travelling outside the United States.
It is recommended to purchase a Medigap policy within six months of enrolling in Part A and Part B to avoid paying higher premiums or facing enrolment restrictions. If you are under 65, you may face challenges in purchasing a Medigap policy or may have to pay higher prices. Before buying a Medigap policy, it is advisable to consult with your local State Health Insurance Assistance Program (SHIP) to receive free and personalized health insurance counselling.
Medigap is distinct from Medicare Advantage Plans (Part C), which are offered by Medicare-approved private companies as an alternative to Original Medicare. Medicare Advantage Plans typically include drug coverage (Part D) and may have different rules and restrictions compared to Original Medicare. It is important to carefully consider your coverage options, including Medigap and Medicare Advantage Plans, to choose the most suitable option for your health needs and financial situation.
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Medicaid
Eligibility for Medicaid is determined by each state. It is typically based on Modified Adjusted Gross Income (MAGI) for children, pregnant women, parents, and adults. States have the option to establish "medically needy programs" for individuals with significant health needs whose income is too high to qualify for Medicaid under other eligibility groups. These individuals can become eligible by spending down their income on medical and remedial care.
To find out if you qualify for Medicaid, contact your state Medicaid agency. They can provide information on eligibility requirements, renewal or application processes, and the specific services covered in your state. Additionally, they can assist with obtaining replacement cards and answering any other Medicaid-related questions you may have.
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Part D coverage
Medicare Part D refers to prescription drug coverage. It helps pay for medications you take regularly to manage chronic conditions, such as heart disease, high cholesterol, or asthma. It also covers medications you take for a short period, such as antibiotics.
There are two ways to get Part D coverage. Firstly, you can enrol in a separate, standalone Medicare Part D prescription drug plan when you turn 65 or during open enrolment. Secondly, you can choose to join a Medicare Advantage plan (Part C) that includes drug coverage. Not all Medicare Advantage plans include drug coverage, so it is important to review the details of any plan before enrolling.
Part D plans are part of the government's Medicare program but are offered and managed through approved private insurers. These plans help protect against high-cost prescription drugs by offering various levels of cost coverage for different "tiers" of drugs. They also offer flexible plan options, with choices in cost and benefit levels depending on your needs and other coverage you may have. However, it is important to note that Part D plans differ in the types of drugs they cover, so it is necessary to anticipate your prescription drug needs for the year when selecting a plan.
Part D plans have their own drug lists (formularies), levels of cost coverage, and monthly premiums. You may have to pay a Part D late enrollment penalty if you don't join a Medicare drug plan when you first get Medicare and go 63 days or more without creditable drug coverage. This penalty increases the longer you wait to join a plan, and you will typically pay it for as long as you have Part D coverage, even if you switch plans.
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Medicare drug plans
Medicare health plans are offered by private companies that contract with Medicare to provide Part A (Hospital Insurance) and Part B (Medical Insurance) benefits to people with Medicare. Medicare Advantage Plans, Medicare Cost Plans, Demonstrations/Pilots, and Program of All-inclusive Care for the Elderly (PACE) are all types of Medicare health plans.
Medicare Advantage Plans, sometimes called "Part C" or "MA plans", are offered by Medicare-approved private companies that must follow rules set by Medicare. Most Medicare Advantage Plans include drug coverage (Part D). However, in most types of Medicare Advantage Plans, you cannot join a separate Medicare drug plan. Each plan has a list of covered drugs, called a "formulary", which can vary in cost and specific drugs covered.
If you chose Original Medicare and want to add drug coverage, you can join a separate Medicare drug plan. Medicare drug coverage is optional and available to everyone with Medicare. You may pay a Part D late enrollment penalty if you don’t join a Medicare drug plan when you first get Medicare and go 63 days or more without creditable drug coverage. The penalty goes up the longer you wait to join a plan, and in most cases, you pay this monthly penalty for as long as you have Part D coverage, even if you switch plans.
Medicare Supplement Insurance (Medigap) is extra insurance you can buy from a private company that helps pay your share of costs in Original Medicare. Medigap policies do not usually cover prescription drugs.
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Frequently asked questions
Medicare is federal health insurance for anyone aged 65 and older, as well as some people under 65 with certain disabilities or conditions.
There are four parts to Medicare: Part A (Hospital Insurance), Part B (Medical Insurance), Part C (Medicare Advantage), and Part D (drug coverage).
If you have Medicare, you will have signed up for it through Social Security. You can sign up for Parts A and B, or Part A only. If you have private insurance, this may be a Medicare Supplement Insurance (Medigap) plan, which is extra insurance to help pay your share of costs in Original Medicare.
Medicare Advantage Plans (Part C) are offered by Medicare-approved private companies and are an alternative to Original Medicare. They typically include Part D coverage and may be known as an MA plan.
You can get Medicare drug coverage (Part D) by joining a separate Medicare drug plan or by joining a Medicare Advantage Plan that includes drug coverage.
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