Original Medicare
Medicare is a federal health insurance program primarily designed for people age 65 and older. It is also available to certain younger individuals with disabilities or qualifying medical conditions. Medicare helps cover many healthcare expenses, but it does not pay for every service or cost.
Medicare is divided into several parts. Part A generally covers inpatient hospital care, skilled nursing facility care, hospice, and certain home health services. Part B helps cover doctor visits, outpatient care, preventive services, and medical equipment. Together, Parts A and B are known as Original Medicare.
Beneficiaries may also choose a Medicare Advantage plan, known as Part C, offered by private insurance companies approved by Medicare. These plans provide Part A and Part B benefits and often include prescription drug coverage and additional benefits. Part D provides prescription drug coverage through private insurance companies.
Because Medicare options, provider networks, drug formularies, premiums, and out-of-pocket costs can vary, it is important to review your coverage carefully. Understanding your healthcare needs, prescriptions, doctors, and budget can help you choose coverage that fits your individual situation.
Medicare Supplement Insurance also known as MediGap
Medicare Supplement plans, also known as Medigap, are offered by private insurance companies and work alongside Original Medicare. These plans help pay certain out-of-pocket costs that Medicare Parts A and B do not fully cover, such as deductibles, copayments, and coinsurance.
Medicare Supplement plans are standardized and identified by letters, with each plan letter generally providing the same basic benefits regardless of the insurance company offering it. However, premiums, customer service, household discounts, and rate increases may vary between companies.
With a Medicare Supplement plan, you can generally visit any healthcare provider nationwide who accepts Medicare, without being limited to a specific provider network. Some plans also include limited coverage for emergency medical care while traveling outside the United States. Prescription drug coverage is not included, so beneficiaries may need a separate Medicare Part D plan.
Choosing the right time to enroll is important. During your Medigap Open Enrollment Period, you generally have greater flexibility to purchase coverage without medical underwriting. Outside certain enrollment or guaranteed-issue periods, eligibility and premiums may depend on your health history.
Medicare Advantage
(Part C)
Medicare Advantage plans, also known as Medicare Part C, are offered by private insurance companies approved by Medicare. These plans provide all the benefits of Medicare Parts A and B and often include prescription drug coverage in one convenient plan.
Many Medicare Advantage plans may offer additional benefits that Original Medicare does not cover, such as routine dental, vision, hearing, fitness programs, transportation, or allowances for certain over-the-counter health products. Benefits, premiums, copayments, provider networks, and service areas can vary by plan and location.
Most Medicare Advantage plans use a network of doctors, hospitals, and other healthcare providers. Before enrolling, it is important to confirm that your preferred providers participate in the plan and that your prescriptions are included on its drug list.
Medicare Advantage plans have an annual maximum limit on covered Part A and Part B out-of-pocket expenses, which can provide financial protection from high medical costs. Because plans and individual healthcare needs may change each year, reviewing your coverage annually can help ensure it continues to fit your doctors, medications, budget, and lifestyle.
Prescription Drug Plans
(Part D)
Medicare Prescription Drug Plans, also known as Medicare Part D, help cover the cost of prescription medications. These plans are offered by private insurance companies approved by Medicare and are available to individuals enrolled in Medicare Part A and/or Part B.
Each Part D plan has its own list of covered medications, called a formulary. Prescription drugs are typically organized into different tiers, with costs varying based on the medication and tier. Premiums, deductibles, copayments, coinsurance, pharmacy networks, and mail-order options can also differ among plans.
When selecting a plan, it is important to make sure your prescriptions are covered and to compare their costs at your preferred pharmacies. Plans may change their formularies, premiums, and pharmacy arrangements from year to year, so reviewing your coverage annually can help ensure it continues to meet your needs.
Even if you do not currently take prescription medications, enrolling when you first become eligible may help you avoid a late-enrollment penalty later. Medicare beneficiaries with limited income and resources may also qualify for Extra Help, a federal program that can reduce Part D premiums and prescription costs.