Mid-Atlantic Agency, Inc.

Medicare

Medicare, the federal Health Insurance program for those over 65 and with certain disabilities, is an entitlement program.  Everyone who has paid enough payroll taxes and who qualifies due to age or disability may enroll, regardless of income, although those with higher incomes may pay more for certain part while those with lower incomes may qualify for various subsidy and assistance programs.  Folks who have not paid enough payroll taxes may qualify based upon a spouse’s record, or they may “buy into” Medicare by paying a monthly premium for a certain part.  Resident aliens may also buy-in after living in the United States for a certain period.

You may think of Medicare and associated Health Insurance as a family of five parts:  Part A, Part B, Part C, Part D, and MediGap.

Part A, which is supported by payroll taxes and for which most folks do not pay a premium, in general terms covers the hospital expenses.

Part B, for which everyone who enrolls is subject to a premium, generally covers outpatient services, such as doctor visits.

Part C, in which CMS contracts with private carriers to provide Part A and B, and perhaps other, coverages, is also known as Medicare Advantage.  Medicare Advantage plans have premiums ranging from zero to well over $100 monthly.  Most have networks of participating providers, and some do not cover nonemergency out-of-network care.  Many Medicare Advantage plans, known as MA-PD plans, include Part D (below) drug coverage, and may cost more.

Part D, in which CMS contracts with private vendors to provide prescription drug coverage, is also known as Prescription Drug Plans, or PDPs.  Premiums and drugs covered under different PDPs vary, and may change from year to year.

MediGap, or Medicare Supplement plans, are standardized plans offered by private carriers to cover the "gaps" in Medicare Parts A and B.  Since the plans are standardized by CMS, the only differences between various carriers are (1) does any given carrier offer that particular plan, (2) how much is that carrier's premium and how is it calculated, and (3) how easy is it to deal with that particular carrier (if you continually have claims problems or your doctor has never heard of that carrier, your frustration may make another carrier's plan more attractive, even if it cost a tad more).