Traditional Medicare Coverage
Traditional Medicare Coverage is comprised of three parts: Hospital Insurance (Part A), Medical Insurance (Part B), and Prescription Insurance (Part D). Part A is provided to people age 65 or older who are eligible for Social Security or Railroad Retirement benefits. Part B has a premium, which is deducted from your Social Security or Railroad Retirement monthly benefit before you receive it. Part D is purchased through insurance companies; these premiums may be paid directly to the insurance company or deducted from your Social Security or Railroad Retirement benefit. Because there are deductibles and co-pays with traditional Medicare, it is wise to purchase supplemental insurance.
These policies are known as Medigap policies. Medicare has required all companies offering Medigap policies to standardize their policies. The policies are categorized by capital letters, and insurance companies must provide identical coverage for each “letter” category. This enables you to easily compare prices. Go to Medicare’s website,www.medicare.gov, click on the “Health and Drug Plans” tab, then click on “Compare Medigap Policies,” and follow the directions to obtain a list of available insurance companies providing Medigap policies for your area. With a Medigap policy you will have two insurance cards (Medicare and your Medigap). It is important to show both cards to medical providers to be sure claims are filed with both insurances. If your Medigap policy does not include prescriptions coverage, you can also purchase a Part D policy from participating insurance companies; you would use that card for any prescriptions. If you follow the directions in the next section for “Health and Drug Plans,” you can obtain information on participating companies in your area.
Medicare Advantage Programs
In a Medicare Advantage Program, an insurance company contracted with Medicare combines the traditional Medicare coverage with supplemental coverage and issues a single policy under that insurance company. There are a variety of Medicare Advantage plans: Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO), Point of Service Organizations (POS), and Private Fee For Service (PFFS). With some Medicare Advantage Programs you may incur a financial penalty if you use an out-of-network provider or fail to obtain authorization from your primary care physician for certain treatments. Go to Medicare’s web site, www.medicare.gov, click on “Health and Drug Plans,” then click on “Compare Drug and Health Plans,” and follow the directions to find insurance companies offering: drug coverage, Medicare Advantage coverage, or both. With a Medicare Advantage Program you do not use your Medicare card. Since the policy issued by the insurance company combines your Medicare and supplemental coverage into a single policy, you will only use the card issued by the insurance company.
In most circumstances you are allowed to drop or switch a Medicare Advantage Plan only during the enrollment period. The “Medicare & You” handbook listed on Medicare’s website gives information on exceptions to this.
Sources of Help
If you go to Medicare’s website, www.medicare.gov, and click on “Medicare Basics,” there is a drop down box where you can select “Coverage Choices.” This gives a side by side comparison of traditional Medicare with Medicare Advantage Programs. The APPRISE program through PA Department of Aging (1-800-783-7076) also provides help with health insurance questions.