When Medicare was first developed in 1965, beneficiaries had only the option of enrolling in Medicare Part A and Part B. These two portions of Medicare provide beneficiaries with coverage for expenses related to hospital stays, related rehabilitation needs, and general medical insurance. In the decades since, Medicare has evolved and expanded to offer beneficiaries with more options not only within Medicare but also outside of the Medicare program.
Senior citizens who choose to go with the original Medicare Part A and Part B coverage will be provided with hospital coverage and general medical coverage without the beneficiary having to pay a monthly premium. However, Part A and Part B have been criticized in recent years for the “gaps” in coverage leaving beneficiaries vulnerable to extra out of pocket costs.
Individuals who struggle to afford Medicare coverage under Part A and Part B can enroll in a Medicare Medigap Policy (also known as Medicare Supplemental Insurance) to help cover the cost of co-payments, deductibles, and coinsurance. Medigap policies are voluntary and beneficiaries must pay monthly or quarterly premium payments to receive assistance from their Medigap plan. Medigap has differing plans, from Plan A to Plan L, which provide differing levels of extra coverage. Plan A provides the fewest benefits but has the lowest premium while Plan L provides the most benefits but comes with a higher premium. Generally, Medicare would pay its share of costs related to hospital or Medicare insurance and an individual’s Medigap policy would then pay its share.
Beneficiaries who are in need of multiple and/or expensive prescription medications can enroll in Medicare Part D. Part D provides senior citizens with assistance in covering the costs of prescription medications necessary to beneficiaries with the drugs vital to their quality of life. Anyone enrolled in Part A and Part B is eligible to enroll in Medicare Part D, while those with a Medicare Advantage Plan likely will not need Part D coverage as their plan covers prescription medications.
Individuals who do not wish to have Medicare Part A, Part B, and/or Part D can enroll in a Medicare Advantage Plan (referred to as Medicare Part C). Medicare Advantage Plans allow beneficiaries to choose health plans from private insurance companies provided that Medicare approves the plan being offered. Medicare Advantage Plans include:
• Health Maintenance Organizations (HMO),
• Preferred Provider Organizations (PPO)
• Private Fee-for-Service Plans
• Medicare Special Needs Plans
• Medicare Medical Savings Account Plans (MSA)
Medicare Advantage Plans make payments to an individual’s provider to cover the cost of services related to hospital stays and medical costs for regular checkups and exams. Many advantage plans also have prescription medication coverage included as well. In addition to covering costs typically associated with Part A and Part B coverage, Medicare Advantage Plans also offer extra benefits such as coverage for vision, dental, hearing, and health and wellness programs. Beneficiaries will still have to pay their Part A and Part B premiums and can also face monthly premium charges from their Medicare Advantage Plan provider.
Medicare has come a long way since 1965. Beneficiaries no longer have just Part A and Part B to choose from but can also seeks outside coverage from private providers who offer Medicare approved plans.