Medicare Made Simple: Coverage Options and What to Know
Joshua Meeks
| 3 min read
Vice president, Medicare Advantage Individual Busine...
Key Takeaways
- Medicare includes multiple coverage options, and understanding each part can help beneficiaries choose plans that fit their healthcare needs.
- Comparing Medicare costs, provider networks and prescription drug coverage can help beneficiaries avoid unexpected expenses and coverage gaps.
- Original Medicare and Medicare Advantage offer different benefits, costs and flexibility, making annual plan reviews especially important.
- Reviewing coverage during Medicare Open Enrollment can help beneficiaries adjust plans as healthcare needs and budgets change. (
Medicare can seem complicated, with multiple parts, enrollment periods and coverage options to consider. Understanding how the program works can make it easier to compare plans and select coverage that fits individual healthcare needs and budgets.
Medicare is a federal health insurance program primarily for people age 65 and older. Certain younger people with disabilities, end-stage renal disease or amyotrophic lateral sclerosis (ALS) may also qualify.
Understanding different parts of Medicare
Medicare has four main parts. Part A helps cover inpatient hospital care, skilled nursing facility care and some home healthcare and hospice care. Part B covers doctors’ services, outpatient care, preventive services, diagnostic tests and durable medical equipment. Together, Parts A and B make up Original Medicare. There is no limit on what is paid out-of-pocket in a year unless an individual benefits from other coverage, such as Medicare Supplement (Medigap), Medicaid, employer, retiree, or union coverage.
Part C is Medicare Advantage (MA), an alternative to Original Medicare offered by Medicare-approved private insurance companies. These plans combine Part A and Part B coverage and typically include prescription drug coverage. Part D is prescription drug coverage offered through private plans for people with Original Medicare, but not all MA plans include Part D. MA plans are required to cover everything Original Medicare covers.
For many people, enrollment begins with an Initial Enrollment Period around their 65th birthday. Some people are automatically enrolled, while others have to sign up. Those who continue working and have qualifying employer coverage may have different enrollment considerations.
The Medicare Open Enrollment Period runs from Oct. 15 through Dec. 7 each year. During this period, beneficiaries can review or change Medicare Advantage and Part D coverage, with changes generally taking effect Jan. 1. During this period, individuals can also switch from Original Medicare to MA, or vice versa.
Original Medicare vs. Medicare Advantage
The biggest coverage decision is whether to choose Original Medicare or Medicare Advantage.
Original Medicare allows beneficiaries to see any doctor or healthcare provider who accepts Medicare anywhere in the United States. But it does not include prescription drug coverage or an annual out-of-pocket maximum. Beneficiaries can purchase a separate Part D plan for prescriptions and a Medicare Supplemental policy to help cover certain deductibles, copayments and coinsurance.
Medicare Advantage provides Part A and Part B benefits through a private insurance plan. Most plans also include Part D coverage and may offer additional benefits, such as dental, vision and hearing coverage. In exchange, beneficiaries generally must use the plan's network for nonemergency care and may face requirements such as referrals or prior authorization.
Costs also differ. Original Medicare has premiums, deductibles and coinsurance, while Medicare Advantage plans establish their own premiums and cost-sharing structures. Medicare Advantage plans also have an annual limit on out-of-pocket costs for covered services.
Questions to ask when choosing Medicare coverage
During Medicare enrollment, beneficiaries should consider more than the monthly premium. Important questions include:
- Are current doctors, hospitals and pharmacies in the plan's network?
- Are current prescription medications covered, and what will they cost?
- What are the plan's deductible, copayments, coinsurance and annual out-of-pocket maximum?
- Would Original Medicare plus Part D and Medicare Supplemental coverage provide better coverage for individual needs?
- Does a Medicare Advantage plan offer dental, vision, hearing or other benefits that are important?
- Are referrals or prior authorization required for specialists, tests or treatments?
- Could healthcare needs or travel plans change during the coming year?
Medicare plans and costs can change annually, making it important to review coverage during enrollment rather than automatically renewing a plan. The National Council on Aging recommends reassessing Medicare options each year, while Medicare.gov offers tools to compare plans and coverage.
Joshua Meeks is the vice president of Medicare individual business at Blue Cross Blue Shield of Michigan. For more health tips and information visit bcbsm.mibluedaily.com.
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