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Medicare & Private Insurance

The Medicare health insurance program provides government-sponsored health coverage for seniors and disabled individuals. The privatization of Medicare made it possible for private insurance companies to market Medicare coverage in addition to the original program benefits offered through the federal government. As a result, seniors and disabled persons can choose from an array of Medicare coverage plans.

  1. Traditional Medicare Coverage

    • Traditional Medicare coverage consists of a two-part program made of Medicare Parts A and B. People who receive Social Security disability benefits and retired persons automatically qualify for Medicare Part A coverage. The benefits offered under Part A helps to cover the costs of hospital stays, home health care services, medicines, nursing home care and hospice care. Part B benefits must be requested and include a monthly premium cost. The benefits offered under Part B include physician care, outpatient services, lab testing, medical equipment and rehabilitation therapy. Both Medicare Parts A and B only provide coverage for services deemed medically necessary for treatment purposes.

    Medicare Advantage

    • Medicare Advantage plans---also known as Medicare Part C---offer the same benefit coverages as traditional Medicare in addition to some extra benefits not included under traditional Medicare. These plans are sold through private insurance companies so premium rates, co-pays and benefit coverages can vary from plan to plan. Extra benefit offerings may include dental, vision and prescription coverage. In most cases, managed care networks provide the services covered under Medicare Advantage plans so recipients must receive services from network providers in order to pay reduce coverage costs.

    Medigap Plans

    • People who use traditional Medicare coverage are left to pay out-of-pocket costs, some of which include hospital deductibles and co-pays for doctor visits. Medigap plans---also known as Medicare supplement insurance---provide coverage for many out-of-pocket costs left over by traditional Medicare coverage. In total, there are 10 different Medigap plans to choose from, with each offering different benefit coverages. Medigap plans are sold through private insurance companies, so plan costs can vary considerably, albeit these are standard plans, meaning each successive plan type offers the same set of benefit coverages regardless of which company sells them.

    Medicare Part D

    • Medicare Part D---the newest program within Medicare's health system---makes prescription drug benefits available for Medicare recipients. In effect, these plans work alongside traditional Medicare and Medicare Advantage plans. Medicare Part D is sold through private insurance companies with each company offering different price rates. People with traditional Medicare coverage must purchase a separate Part D plan, whereas many Medicare Advantage plans include Part D as part of a plan. Medicare Part D recipients pay a monthly premium along with a co-pay amount for each prescription ordered.

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