Understanding Medicare Plan Types
If you’re new to Medicare, you may be surprised to find out how many questions you have about how Medicare works — and how many choices there are to make. Getting to know Medicare starts with understanding the three basic plan types, what they cover, and how they are different from each other.
Here’s what you need to know about Original Medicare (sometimes called Traditional Medicare), Medicare Supplement, and Medicare Advantage.
Original Medicare
- What is it? Original Medicare is what most people think of when they hear the word “Medicare.” Original Medicare is the federal government’s fee-for-service health plan for adults over 65 and those who have certain disabilities.
- What does it cover? Original Medicare includes two parts: Part A, which covers care you get in a hospital, and Part B, which covers care you get at a doctor’s office as well as some medical supplies. Original Medicare does not include Medicare Part D prescription drug coverage.
- What does it cost? Part A coverage is no cost for most people as long as you worked and paid Medicare taxes for at least 10 years, but everyone on Medicare pays a monthly premium for Part B. Your Part B premium typically comes out of your Social Security check. You’ll also pay deductibles before Medicare pays its share of your health care costs. Then you will pay coinsurance for your health care services. Typically, Medicare pays about 80 percent of the costs, while you pay 20 percent.
- Where can I use it? You can use Original Medicare anywhere in the U.S. that accepts Medicare.
Medicare Supplement
- What is it? When people choose to use Original Medicare, they sometimes buy Medicare Supplement policies to help pay their out-of-pocket costs. Medicare Supplement policies are sold by private insurance companies to help cover the costs Original Medicare does not pay.
- What does it cover? Medicare Supplement policies exist solely to help people pay out-of-pocket costs not covered by Original Medicare Parts A and B. Medicare Supplement policies do not include Medicare Part D prescription drug coverage.
- What does it cost? It depends on what kind of Medicare Supplement policy you choose.
- Where can I use it? Typically, you can use your Medicare Supplement policy anywhere Medicare is accepted.
Medicare Advantage
- What is it? Medicare Advantage plans are sold by private insurance companies that contract with Medicare. These plans typically bundle the coverage you get with Medicare Parts A and B with extra benefits, like dental, hearing, vision, prescription drug coverage.
- What does it cover? Medicare Advantage plans offer the same coverage as Medicare Parts A and B, as well as some additional benefits, which vary depending on which plan you buy. Many Medicare Advantage plans also include hearing, dental, vision, and Medicare Part D prescription drug coverage.
- What does it cost? It depends on what plan you buy. Many Medicare Advantage plans don’t have a monthly premium. Although you still have to pay your Medicare Part B premium, no matter what plan you get. Also, Medicare Advantage plans often include what’s called an out-of-pocket maximum, which limits how much you will spend out of pocket each year on your health care.
- Where can I use it? Most Medicare Advantage plans have networks of doctors, health care facilities and hospitals you must use as part of your plan. With a Medicare Advantage plan, you can get a Preferred Provider Organization (PPO) plan, which typically allow you to see which doctors you want without a referral and to use your plan when you are traveling. Health Maintenance Organization (HMO) plans require you to get a referral from your primary care doctor before you see other doctors and may have a more restricted network of doctors.
Have more questions about Medicare? Visit FloridaBlue.com/medicare.
