by Kirk Matenaer, Medicare and Long Term Care Specialist with Franklin & Associates, Inc.
Medicare beneficiaries have two options for receiving their health care coverage: Original Medicare or Medicare Advantage. Each option has different costs and rules about the providers you use, so it is important to understand the basics about both before changing your coverage.
Original Medicare is the traditional fee-for-service Medicare program administered directly by the federal government. Under Original Medicare, you can see any doctor in the country who participates in the program, and most doctors do. It includes Part A, which covers inpatient hospital costs, and Part B, which covers outpatient medical costs. In order to have prescription drug coverage under Original Medicare, you must actively choose and enroll in a stand-alone Part D prescription drug plan.
With Original Medicare, after you pay your monthly premium, you pay a coinsurance for each service that you receive. If you have Original Medicare, you can purchase a Medicare Supplement policy (Medigap) to assist with Part A and Part B premiums and copays. It’s important to know that Medigap offerings have been standardized by the Centers for Medicare and Medicaid Services (CMS) into ten different plans, labeled A through N, sold and administered by private companies. Each Medigap plan offers a different combination of benefits.
Medicare Advantage plans are plans administered by private insurance companies that provide Medicare benefits. These plans contract with Medicare, and are paid a fixed amount to provide Medicare benefits. Advantage plans must provide all Part A and Part B services, but they can do so with different costs and restrictions than Original Medicare. Many plans include drug coverage and can also offer additional benefits that Original Medicare does not cover, like routine vision or dental care. In most cases, you must still pay your Medicare Part B monthly premium.
With Medicare Advantage, you must live in the plan’s service area in order to enroll. Most Advantage plans are generally managed care plans, and the most common types are Health Maintenance Organizations (HMOs) & Preferred Provider Organizations (PPOs). Managed care can really affect how and when you can get care. For example, Medicare Advantage plans require members to use their networks of doctors and hospitals. If you use an out-of-network provider, you may have to pay more for your care. Fortunately, Medicare Advantage plans must limit the amount you spend out-of-your own pocket for health care. These limits tend to be high but are helpful if you need a lot of care.
Unlike Medigap plans, all Medicare Advantage plans are annual plans which end on December 31st of each year. Each year, Advantage plans can change their networks, premiums, deductibles, cost-sharing and some benefits, or discontinue their coverage altogether. If you have an Advantage plan you need to be aware of how your plan may change, and prepare accordingly. Being proactive about your coverage can help to reduce costs and make sure that your health care needs are met.
Even if you are satisfied with your current Medicare coverage, it’s important to investigate every year whether other Medicare options may better suit your individual needs. Here are some helpful resources:
Visit Medicare.gov: This site will allow you to find and compare Medicare plans in your area. It provides an excellent starting point for your search.
Contact your local Medicare Specialist (Franklin & Associates): They will compare numerous plans and select the one that is BEST for YOU. There is no charge to you for their services.