Medicare Health Care Options

Medicare is a federal health insurance program that is available for qualified people who are 65 years old and older, individuals who are disabled and under the age of 65, and those with permanent kidney failure that has been treated with either dialysis or a transplant. About 40 million Americans are enrolled in this program. After their initial eligibility period, people can either enroll or switch their plans only between Nov. 15 and Dec. 31. The Original Medicare Plan is administered by the federal government, and some of the other health care plans that are available through Medicare are run by others, such as private companies and insurance companies.

Features

• The different plans available through Medicare can help pay for various services, depending on what people choose. The two major types of coverage that most people receive under Medicare are hospital insurance (Part A) and medical insurance (Part B). Hospital insurance helps pay for services such as overnight or long-term stays in hospitals, hospice care or nursing homes, as well as some home health care assistance. Medical insurance pays for services such as doctor visits, outpatient care and preventive services. This includes ambulance transportation; blood transplants; cardiovascular screenings; clinical laboratory services, such as blood tests and urinalysis; diabetes screenings and supplies; emergency room visits; flu and Hepatitis B shots; physical therapy; and tests such as X-rays and CT scans. For both types of insurance, there are monthly premiums, as of March 2009, that people have to pay: up to $443 per month for hospital insurance (although most recipients pay no premium for this coverage), and around $96.40 per month for medical insurance.

Original Plan

• One of the main plans available is the Original Medicare Plan. Under this plan, people are able to choose their own doctors, but they also must pay for each service separately. Also under this plan, people have to pay a deductible before Medicare will pay the amount that it is obligated to pay, and they also have to pay a portion of the bill for services, or a coinsurance. Most people with this plan have both hospital and medical coverage. They are under an agreement as part of the plan, known as an assignment, where Medicare pays the doctor or medical provider directly for services.

Supplemental Plan

• The Original Medicare Plan may not cover 100 percent of people's health care costs, which is why some private companies offer plans that are meant to fill some of these gaps. These plans are called Medical Supplemental Insurance plans. They can help pay for co-payments, deductibles and coinsurance that people have to pay under Medicare Plans. These plans sometimes help pay for services that the Medicare plan does not, including medical services obtained outside of the United States.

Advantages Plan

• Another category of major plans that people can choose includes Medicare Advantage Plans. Under these plans, Medicare pays a certain amount each month to private companies for people's health care. Like the Original Medicare Plan, these plans also provide medical and hospital insurance. The difference is that they require patients to pay different out-of-pocket expenses, depending on the type of plan that is selected. Under these plans, people often have to pay co-payments, deductibles and coinsurance. They sometimes get more services under these plans than other Medicare plans, including insurance for vision, hearing and dental services, as well as prescription drug coverage.

Types

• There are five different types of plans that people can select when they enroll in the Medicare Advantage Plans, including Preferred Provider Organizations (PPOs), Health Maintenance Organizations (HMOs), Private Fee-For-Service (PFFS), a Medical Savings Account (MSO), and Special Needs Plans (SNP) plans. The two most common types people choose are HMOs and PPOs. In PPOs, there is a specific network of doctors, to which people can go without having to pay extra costs. They are allowed to see a doctor that is out of network and still get coverage, but they often have to pay extra costs. With HMOs, people are usually not allowed to go out of the network to see a doctor unless it is for emergency care. In most PPOs and HMOs, drug coverage is included. SNPs are similar to the other two plans, because they also offer prescription drug coverage and have networks of doctors, to which people must go in order to get coverage. Unlike the other two types, SNPs generally serve people who are in nursing homes, are eligible for both Medicare and another federal health care program called Medicaid, and/or have chronic health conditions such as congestive heart failure or HIV/AIDS.

Differences

• Some plans that are offered under the Medicare Advantage Plans are different in many ways from HMO and PPO plans, so it is important that people understand how each works and what they all offer before signing up for them. In contrast to PPO and HMO plans, PFFS and MSA plans do not usually offer prescription drug coverage, which means patients often have to pay extra for medication insurance. Under both of these plans, people generally can go to any doctor they choose, although there are sometimes physicians and hospitals to which they are able to go for lower costs under the MSA plans. Doctors and hospitals are allowed to turn away people who are under the PFFS plan. Under the MSA plans, there is a high-deductible health plan and bank account. The plan provider takes a portion of the money it receives from Medicare and deposits it into an account, which people can use to pay for health care costs.

Prescription Insurance

• One plan that is offered through Medicare, in which people can be enrolled in conjunction with other plans, such as the Original Medicare Plan, is the Medicare Prescription Drug Coverage Plan, or Part D. In order to participate, people have to select a plan from an insurance company or private company that is approved by Medicare. Since these plans are run by outside companies, people may have to pay monthly premiums, co-payments, deductibles and/or coinsurance on top of what they pay for other Medicare programs. Under these plans, there may be rules about how many pills people can get and the types of less-expensive drugs they need to try before using the ones their doctors may prefer. One of the issues with these plans is that there is often a coverage gap. This means that they pay for only a certain amount of drug costs each year, and if people exceed that, they have to pay the total costs for their prescriptions for the rest of the year. Catastrophic coverage can help fill gaps, so people have to pay only co-payments and coinsurance.