What Is the Difference Between Medicare Medigap & PFFS Insurance?

Health insurance--private and public plans--aren't exactly renowned for being easy to understand. With all of the jargon, it's sometimes difficult to keep everything straight. Medicare and Medigap sound almost exactly alike, and who can remember the alphabet soup that makes up terms like PFFS? However, once you make an effort to learn the system, keeping everything straight can be a lot easier.

Medicare

• The term Medicare refers to the government administered health insurance system that is available to Americans 65 and older and disabled individuals. There are no income limits to qualify for Medicare. As long as you have worked and paid into Social Security for a total of 10 years, parts of Medicare are free. Even if you haven't, you can still get Medicare if you are a legal citizen for a fee. Some costs are associated with different parts of Medicare.

Components of Medicare

• Medicare can simply be explained in four parts---Parts A, B, C and D.

  Part A is inpatient hospital coverage. This covers hospital services.

  Part B is outpatient coverage. This coverages includes doctor's visits, routine care, preventive care, vaccines, durable medical equipment.

  Part C refers to a component of Medicare in which you can get Parts A and B through a private health plan. This is known as Medicare Advantage.

  Part D refers to private health plans that offer drug coverage for folks who have Medicare.

Medigaps

• A Medigap is related to Medicare. It is not officially sanctioned by the government like Medicare is, but it is to be used with Medicare. A Medigap is supplemental insurance---in other words, it fills in the gaps of Original Medicare. You cannot purchase a Medigap to work with a Medicare Advantage plan.

  Medigaps can be purchased from private insurance companies. These plans basically pick up what you would have to pay out of pocket with Original Medicare---things like deductibles and coinsurances.

  To find out specifically what Medigap covers and the cost of the plan, consult the private plan selling it. Depending on your state, you may be limited in when you can purchase a Medigap plan.

PFFS

• PFFS stands for Private Fee-for-Service. The difference between Original Medicare and PFFS is that Medicare is a Fee-for-Service plan that is widely accepted nationwide. PFFS are available through private health insurance companies.

How they Compare

• PFFS plans are available through Medicare Advantage as an alternative to Original Medicare. PFFS means essentially what it says---your doctor receives a fee for whatever service is offered. Each PFFS plan has a particular terms and conditions of payment. When you see a doctor using most other types of insurance, usually once that doctor agrees to treat you, they will continue treating you. However, under PFFS, the doctor can change his mind at any time. These plans do not have a network, unlike Medicare.

  Furthermore, costs associated with PFFS vary depending on the plan, while Original Medicare's costs are the same nationwide.

  You cannot purchase a Medigap to work with a PFFS because PFFS is a type of Medicare Advantage plan.