Medicare is a federal health insurance program that provides hospitalization, medical, and prescription drug insurance for the elderly and individuals with disability. It was created by Congress in 1965. The basic idea is for the Government to provide health insurance as part of Social Security.
As insurance, it is not government assistance, unlike Medicaid or AHCCCS and other plans which are assistance programs for people of limited income.
The “Original Medicare” program is administered directly by the government. It consists of separate hospital insurance called Medicare Part A, and medical insurance called Part B. It also includes prescription drug coverage called Part D.
Original Medicare is traditional ‘fee for service’ insurance where you are not limited to a network like an HMO. However, not every doctor and hospital participates.
Coverage for prescription drugs is known as Part D. In 2006 Congress expanded Medicare to provide insurance for prescription drugs. However, there are currently over 1,800 different drug ‘plans.’ No one plan may cover all of the drugs you are taking, nor might it pay the full expense of the drugs that are covered.
n Medicare, so your choice may be limited. Most people get Part A free of charge, but Part B is optional and generally requires that you pay a monthly premium.
It is important to note that Medicare Parts A and B do not cover all your medical costs. Examples are deductibles, copays, etc. You should expect to help pay – which is why many people enroll in Supplemental Plans (Medigap Plans) through a private provider to help pay the costs.
Medicare Advantage is called Part C. It combines Part A and Part B into a single plan, along with Part D prescription drug coverage. It is administered by private companies under contract to Medicare. These are managed care or network plans like an HMO or a PPO. A Part C plan requires you to pay a monthly premium, but the “advantage” is that the cost may be lower than getting each part separately. Part C however, does not always cover Medicare Part D.
Note that prescription drug coverage, like Part B coverage, is an optional plan. You do not have to choose it if you don’t want to. If you don’t choose Part D, it won’t affect your Part A or Part B coverage. If you do choose Part D, it probably will require that you pay a monthly premium. Note that if you choose a Medicare Advantage plan (Part C), you get combined coverage as if you selected Part A, Part B, and Part D separately.
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