Medicare Health Insurance Options Overview

Know your Medicare health insurance options

Medicare options are confusing. Original Medicare, Part A, Part B, Part C, Medicare Advantage plans and Medicare supplement Plans! You have choices and to best protect yourself, you need to understand your Medicare health insurance options.

Medicare beneficiaries generally have three options when it comes to Medicare health insurance.

1. Original Medicare
2. Medicare Supplement Insurance, aka…Medigap
3. Medicare Advantage Plan

 

Original Medicare

Original Medicare consists of Part A which generally covers hospitalization and Part B which generally covers out-patient services. Part A for 2012 has a $1156 deductible for the first 60 days of hospital stay. If you are admitted to the hospital overnight or up to 60 days, you will be responsible for paying this deductible. There are co-pays beyond 60 days.

Medicare Health insurance also includes out-patient coverage though Medicare Part B. Generally speaking, Medicare covers 80% of out-patient services and  you are responsible for the balance of charges consisting of 20% of the provider’s fee.

Most medicare beneficiaries pay a Part B premium or $99.90 per month that is deducted Social Security benefits.

Original Medicare does not cover prescription drugs, and a stand alone Part D drug plan must be purchased from an insurance company.

Medicare Supplement Insurance

Medicare Supplement insurance policies are a form or Medicare health insurance that has been around for over forty years. Policies consist of standardized plans available from private insurance companies. the level of coverage and premium varies from plan to plan. Plan coverage is the same from one insurance company to the next. What generally varies is the monthly premium and the level of customer service offered by each company.

A Medicare Supplement policy is also known as Medigap coverage. They are the same thing and represent one type of medicare health insurance. Plans, to varying degrees, fill in the gaps of what original Medicare does not pay. For instance, the supplement will pay the hospital deductible and some level of out-patient charges depending on the plan.

The Part B premium in addition to the supplement’s monthly premium must be paid and Medicare Supplements do not offer drug coverage, so if you want drug coverage a stand alone Part D prescription plan must be purchased.

Medicare Advantage plan

A Medicare Advantage plan is another way of receiving your Medicare health insurance. You are still in Medicare and need to continue to pay your Part B premium, but your coverage is administered and your medical claims are paid by a private insurance company the is approved and contracted with the Centers for Medicare and Medicaid Services (CMS).

The general idea is that a private insurance company is assumed to be more efficient than the federal government and this may result in greater benefits for Advantage plan members. In any case, Advantage plans are to be at least actuarially equivalent to original Medicare.

There are several types of Medicare Advantage Plans. Plans may or may not include Part D prescription drug coverage and there may or may not be a monthly premium. Medicare Advantage Plans generally include cost sharing through  co-pays and can include deductibles. Extra value enhancing benefits, such as, dental, vision, hearing, gym memberships and discounts on health related products are often included.

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