Understanding the basics of Medicare Plans

Understanding the basics of Medicare Plans

Medicare is a health insurance program administered by the federal government and aims to provide health coverage to people above 65 years of age. Individuals who are suffering from certain disabilities or illnesses are also eligible for this federally administered insurance program. A person who is 65 years or younger and has a qualifying disability or is diagnosed with ALS (end-stage renal disease) is eligible for this health insurance program. A qualifying individual generally has many choices as far as Medicare is concerned. It is important to understand that Medicare is not a “one-size-fits-all” health insurance program. Therefore, individuals must understand the basics in order to choose Medicare Plans wisely.

The first choice is the Original Medicare, which has two parts, Part A, and Part B. Part A includes hospital stays and Part B includes doctor visits. The second choice is the Original Medicare with standalone prescription drugs plan and/or Medicare supplement health insurance plan (Part D). The third choice is the Medicare Advantage or Part C which mostly includes prescription drugs (Part D) plans plus more benefits besides hospital stays included in Part A and doctor visits included in Part B.

While these are the basic choices an individual has, the individual can also decide whether or not they need more coverage. There are two ways of getting additional coverage. The first option is to choose the Medicare Advantage plan, which is offered by private insurance companies. The Medicare Advantage plan or Part C combines both Part A and Part B (hospital stays and doctor visits). This plan offers more benefits such as vision care and routine hearing, which are not offered under the Original Medicare plan. Prescription drugs are mostly covered under this plan.

The second option is to add to the Original Medicare plan Medicare Supplement or Medicare Part D. Medicare Supplement plan is an insurance program offered by private insurance companies. The Medicare Supplement covers few costs that are not paid by the Original Medicare in Part A and Part B. Alternatively; an individual can add Medicare Part D to their Original Medicare plan. This health insurance plan is also offered by private insurance companies and covers all prescription drugs. Another important point to understand is that Original Medicare does not pay or cover for everything and individuals do not have limits to their out-of–pocket costs.

This means that regardless of the type of Medicare Plan an individual chooses, the individual will still pay a small share of their costs through a monthly premium, co-insurance, co-pays and deductibles. The advantage of having the Medicare Supplement plan is that it helps individuals pay some of the expenses that are not covered by the Original Medicare. These may include things like co-pays and deductibles.

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