A Beginner’s Guide to Medicare Pt 2

According to the US Centers for Medicare and Medicaid Services. US, Approximately 1 in 3 Medicare participants has a Medicare Advantage policy. In part, they are popular because they may have lower costs out-of-pocket than Original Medicare plan (only Part A and Part B). If you join a Medicare Advantage policy, you are still in the Medicare program and must continue to pay your Part B premium.

What is Medicare Part D?

Original Medicare (Parts A and Part B) does not insure most prescription drugs. Generally, you must enroll in a separate Medicare Part D prescription drug policy or in a Medicare Advantage Prescription Drug Policy. As a Medicare beneficiary, you will not automatically receive Medicare Part D prescription drugs. Insurance is optional, but you may have to pay a late enrollment fee if you enroll in Part D after you first become eligible, or if you have 63 or more days in a row without prescription drugs with a credit guarantee. This means that the insurance is on average at least as good as the Medicare Part D prescription drug policies. To avoid paying this fine, it is often advisable to sign up for Medicare Part D as soon as you are eligible for the first time, unless you have what is considered by Medicare to be “credible prescription drug coverage.”

As with Medicare Advantage, enrollment in a separate Medicare Part D prescription drug policy is generally limited to certain times of the year, including, if not the first time, Medicare Part B for the first time. If you lose insurance because you leave your policy’s insurance area, you may qualify for a special election period. Medicare Part D prescription drug policies are offered by private insurance companies that have signed contracts with Medicare. Your monthly premium, deductible, deductible, coinsurance, pharmacy network / service area, and the list of prescription drugs insured by the policy (formula) depend on the policy you choose. The form can change at any time, and your Medicare policy will notify you when necessary.

What is Medicare supplemental insurance?

A Medicare Supplemental Insurance Plan (sometimes called Medigap) is designed to help insure some of the costs that Original Medicare (i.e. Parts A and B) do not insure, such as:

  • Co payments
  • Co insurance
  • deductibles

Medicare supplement policies are sold by private companies. Several supplemental Medicare policies insure varying amounts of Part A and Part B costs out-of-pocket. You pay the insurance company a monthly premium in addition to your Part B premium.  A supplemental Medicare plan is different from a Medicare Advantage policy. Medicare Advantage is a way to get the benefits of Part A and Part B of Original Medicare, while a Medigap policy can supplement only the original Medicare insurance and help pay for it. In general, you would not have a Medigap policy or a Medicare Advantage policy. These types of policies do not work together.  In most states of the USA, the benefits are standardized and indicated by different letters of the alphabet (e.g. Medicare Supplemental Policy A).