Medicare A, B, C, D, and Medigap? If you are eligible for Medicare, there is a lot you need to understand to make sure you have the right coverage for your needs and budget.
Medicare is the federal health insurance program for seniors and people with disabilities. Medicare typically pays a portion of enrollee’s health care costs, but not all of them. To make it easier to budget for health care and cover medical expenses not covered by basic Medicare, there are supplemental policies available that cover the costs that Medicare does not cover. To better understand what is covered by each type of Medicare, here is a breakdown of each type of coverage:
Medicare Part A is usually referred to as hospital coverage. Part A covers inpatient lab tests, surgeries, hospital care, skilled nursing facility care, hospice and specific home health services. Essentially Part A is for someone hospitalized or requiring regular skilled care on a limited time basis (it does not cover long-term care).
Medicare Part B is often called medical coverage and essentially deals with outpatient services, both to treat a condition and for preventive purposes. The coverage includes medical expenses, laboratory tests, outpatient hospital treatments, preventive screenings and vaccines, medical exams and some durable medical equipment, like canes, walkers and wheelchairs.
Medicare Part C is actually an alternative to Parts A and B. Part C refers to Medicare Advantage plans, which are largely similar to managed care plans offered through many employers. Originally, Medicare coverage was fee-for-service, but as people got used to plan designs like Health Maintenance Organizations and Preferred Provider Networks. Hence, the Medicare Advantage (original called Medicare+Choice) plans were created. Medicare Advantage plans offer coverage that meets or exceeds what is available in traditional Part A and B options.
Medicare Part D is prescription drug coverage that was added in 2006. Medicare participants, who do not have drug coverage through a Medicare Advantage Plan or an employer, can enroll in a plan, which is actually designed and administered by private health insurance or pharmacy benefit companies. Each plan can choose which drugs (or even classes of drugs) they will cover and at which level they will cover it. So, it is important to scrutinize the details of any Part D plan before enrolling to make sure it meets your needs. With some types of Medicare D plans, there is a deductible in the middle of spending when coverage moves from one plan to another. This is the so-called Medicare donut hole that is being phased out as part of the Affordable Care Act.
Medigap or Medicare Supplemental Policies are sold by private insurance companies and cover financial holes between the Medicare plans. Some were also designed to cover items not covered by Medicare. For example, prior to the introduction of Part D, Medigap plans helped with prescription drug coverage. Nowadays, a common Medigap coverage is for travel outside the U.S., which is not covered by most Medicare options (emergency coverage abroad may be included in some Medicare Advantage plans). Be aware that no Medigap policies cover long-term care, dental care or private-care nursing.
For more information about Senior Health Insurance, please see our Frequently Asked Questions section. If you want to learn more about how Obamacare has impacted Senior Health, please see our educational guide. To find a plan that’s right for you, compare senior health insurance quotes right now to:
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