Understanding The Different Types of Medicare Plans

The Medicare system in the United States provides federally funded healthcare for those over the age of 65 as well as people with certain disabilities and chronic conditions.

Navigating the Medicare system can be tricky, as there are many different types of Medicare plans available. Here’s what you need to know about each type of Medicare plan before you sign up.

Medicare Part A

Medicare Part A offers coverage for hospital stays and some other forms of inpatient care. Everyone who applies for Medicare is automatically enrolled in Part A. Once you sign up for Medicare Part A, you most likely won’t have to pay a monthly premium. This is because some of the taxes taken out of your paycheck over the years go towards your Medicare coverage.

Medicare Part A pays for some forms of hospice care and skilled nursing care in addition to hospital stays. There are some injuries and illnesses that may require ongoing skilled nursing care for a period of time after they happen, such as a stroke. Your doctor will decide whether or not you need this kind of additional care.

There are some instances where Medicare Part A may also cover home care, although coverage limits may vary depending on where you live and your state’s laws.

Although most people won’t pay a monthly premium for Medicare Part A, you’ll need to pay a deductible if you’re hospitalized. Medicare Part A comes with a standard deductible for every hospital treatment. However, once you’ve paid this deductible, Medicare Part A covers almost all charges for hospital stays as long as 60 days.

Medicare Parts A and B are essentially known as Original Medicare. With Original Medicare, you can see the doctors you need without having to get any prior approval from your insurer. There are hospitals and medical systems all over the country that accept Medicare, with options in urban, rural, and suburban areas.

Medicare Part B

Medicare Part B covers a variety of outpatient services. These include many different types of doctor’s visits, screenings, tests, ambulance rides, and certain types of medical equipment. This part of Medicare offers coverage that’s somewhat similar to many traditional health insurance plans.

Unlike Part A, you’ll need to pay a monthly premium for Part B. The government sets a standard monthly premium each year for Part B. Since this premium is partially subsidized by the government, it’s cheaper than the average cost of many private insurance plans.

Your monthly premium may be more than this if you have a higher income. For those who receive Social Security, the monthly deductible is automatically taken out of each payment.

Part B also has a deductible, although it’s much lower than the deductible for Part A. There is also a 20% copay for the outpatient services that you use.

As with Part A, there are limits on how much doctors can charge you for these outpatient services, and there are many federal and state resources available to help you subsidize costs if you can’t afford them.

One of the biggest ways that Part A differs from Part B is that you aren’t automatically enrolled in Part B when you sign up for Medicare. Because of this, many people opt not to sign up for Part B right away if they’re still working and have a job that provides them with health insurance. But if you’re looking for the most affordable premiums possible, it’s best to sign up for both Part A and Part B right when you enroll.

Medicare Advantage – Part C

Part C of the Medicare program is typically referred to as Medicare Advantage, and it works very differently than Part A and Part B.

Medicare Advantage plans are provided through private insurers instead of through the federal government. They come with many added benefits and flexibility, but they can also be much more expensive than Original Medicare plans.

In order to sign up for Part C, you’ll first need to enroll in Original Medicare. This means that you will need to pay the standard monthly premium for Part B. Then, you’ll have the option to choose from several different Medicare Advantage plans from private insurers in your state. Each plan is going to offer different coverage options, which is why it’s important to read through your potential options carefully before making a decision.

There are both HMO and PPO plans available with Medicare Advantage. HMO plans require you to choose a primary doctor and may require you to get a referral before seeing a specialist. PPO plans allow you to choose from a range of doctors within an approved network. You’ll likely still have some additional out-of-pocket costs with a Medicare Advantage plan. This could include additional monthly premiums, deductibles, or co-pays.

Medicare Advantage plans are required to provide at least the same level of coverage as Original Medicare plans, but most offer additional coverage that you wouldn’t get through Parts A or B. This could include additional coverage for long-term care solutions as well as extended specialist coverage for things like dental and vision care.

Medicare Part D

Medicare Part D plans provide prescription drug coverage. Many Medicare Advantage plans come with Part D coverage included, but those who have Original Medicare can also opt to purchase them.

Part D plans are always provided through private insurers and the plans you have available to you may vary from state to state.

Because Part D plans are provided through private insurers, the type of coverage they offer can vary. Before signing up for a Part D plan, it’s important to consider any required copays, premiums, or deductibles. It’s also very important to check and see which drugs your Part D plan covers.

There are some federal and local resources available to help those who need additional prescription drug coverage. There are some catastrophic care options available for those who reach a certain upper limit over the year in terms of drug costs, which can help minimize the overall amount you’ll pay.

Medicare Supplement (Medigap) Plans

Medigap plans are designed to cover additional costs beyond what Original Medicare can pay. These plans are typically designed to minimize deductibles and copays for services.

They’re sold through private insurers and typically require you to pay a monthly premium. However, they can help you save money in the long run if you anticipate having high deductibles.

Medigap plans are only available to those who have Original Medicare. If you have a Medicare Advantage plan, you can’t also sign up for a Medigap plan. Some states have subsidy programs to help minimize the cost of your Medigap monthly premiums.

Final Thoughts

As you can tell, there’s a lot of decisions to make and some research to be done for anyone getting ready to sign up for Medicare.

Some people are required to sign up while others are automatically enrolled. And there are certain times in the year you can even get coverage.

While the process can seem confusing at first glance, just remember that Medicare offers a number of options that you can use to create a plan that’s best suited for your specific needs.

If you’re struggling to determine which Medicare plan to choose from, you may want to consider talking to an insurance expert to help you find the best option and sign up.