How Medicare Plans Work

Original Medicare

The Original Medicare Plan is a fee-for-service plan managed by the Federal Government. In general, with the Original Medicare Plan:

• You use your red, white, and blue Medicare card when you get health care.
• You can go to any doctor or supplier that accepts Medicare and is accepting new Medicare patients, or to any hospital or other facility.
• You pay a set amount for your health care (a deductible) before Medicare pays its part. Then, Medicare pays its share, and you pay your share (your coinsurance or copayment) for covered services and supplies (unless you have a Medigap policy or other supplemental insurance that may pay for these costs.)
• You may have a Medigap policy or other supplemental coverage that may pay deductibles, coinsurance, or other costs that aren't covered by the Original Medicare Plan.

Medicare Advantage Plans

Medicare Advantage Plans are health plan options that are approved by Medicare but run by private companies. They are part of the Medicare Program, and sometimes called "Part C." When you join a Medicare Advantage Plan, you are still in Medicare. With Medicare Advantage Plans:

Some of the plans require referrals to see specialists.

• In many cases, the premiums or the costs of services (co-pays) can be lower than they are in the Original Medicare Plan or the Original Medicare Plan with a Medigap policy.
• The plans provide all of your Part A (hospital) and Part B (medical) coverage and must cover medically-necessary services.
• They generally offer extra benefits, and many include prescription drug coverage.
• They often have networks, which means you may have to see doctors who belong to the plan or go to certain hospitals to get covered services.
• In many cases, your costs for services can be lower than in the Original Medicare Plan.
• Some of the plans coordinate your care, using networks and referrals, more than others.
• This can help manage your overall care and can also result in savings to you.
  You don't need to buy a Medigap policy.
  

Medicare Advantage Plans include:

• Health Maintenance Organization (HMO),
• Preferred Provider Organization (PPO),
• Private Fee-for-Service (PFFS) Plans,
• Medicare Medical Savings Account (MSA) Plans,
• Medicare Special Needs Plans.

Medicare Prescription Drug Plans

• The Original Medicare Plan,
• Some Medicare Cost Plans,
• Some Medicare Private Fee-for-Service Plans, and
• Medicare Medical Savings Plans.

With a Medicare Prescription Drug Plan:

• Generally, you pay less for your prescriptions.
• You will get a plan member card after you enroll. You use this card when you go to the pharmacy to get your prescriptions filled.
• You will pay the copayment, coinsurance, and/or deductible, if any.

If you have limited income and resources, you may get extra help to pay for your Medicare drug plan costs.

Supplemental Plans

Medigap policies are health insurance policies sold by private insurance companies to fill "gaps" in Original Medicare Plan coverage. In general, with a Medigap policy:

• You get help paying for some of the health care costs that the Original Medicare Plan doesn't cover.
• You also get benefits not covered by Original Medicare, like emergency health care outside the United States.
• You pay a monthly premium to the private health insurance company that sells you the policy. Medicare and the Medigap policy both pay their shares of covered health care costs.