Some folks may not realize it, but there are actually two ways to get Medicare benefits.
The best-known way is Original Medicare. With Original Medicare, you can choose any doctor, hospital, or other health care provider you want, as long as they accept Medicare. When you receive medical services or goods, Medicare pays the provider directly.
The other way is Medicare Advantage, which is a form of managed care, like an HMO. Medicare Advantage is provided by private insurance companies approved by Medicare. If you’re in Medicare Advantage, you generally must go to doctors and other providers in the company’s network.
If you go outside the network, you may have to pay more.
On the other hand, Medicare Advantage companies may offer some services — such a dental, hearing and vision — that Original Medicare doesn’t.
Most people with Original Medicare pay a monthly premium. If you’re in Medicare Advantage, you pay an additional monthly premium to the private insurance company that covers you.
With Original Medicare, you or your supplemental insurance must pay deductibles, co-pays, and coinsurance.
To cover these “gaps” in Medicare, some people buy a type of supplemental insurance called Medigap. If you have a Medigap policy, Medicare pays its share of the covered costs, and then your Medigap policy pays its share.
Medigap policies are sold through private companies. All plans offer the same basic benefits but some offer additional benefits. The costs vary between insurance companies — and often cost is the only difference between policies. Some Medigap policies also offer benefits that Original Medicare doesn’t, such as medical care when you travel outside the U.S.
Original Medicare generally doesn’t cover prescription drugs. If you want drug coverage, you can get it through Medicare Part D. Part D policies are sold through private companies approved by Medicare. You have to pay an additional monthly premium for Part D.
Most Medicare beneficiaries choose Original Medicare. But about one-fourth of all beneficiaries now are covered through Medicare Advantage.
Medicare Advantage companies must cover all of the services that Original Medicare covers, except hospice care. (Original Medicare covers hospice care even if you’re in a Medicare Advantage plan.) In all types of Medicare Advantage plans, you’re always covered for emergency and urgent care.
You can join a Medicare Advantage plan even if you have a pre-existing condition — except for End-Stage Renal Disease. People with ESRD usually are covered through Original Medicare.
Most Medicare Advantage plans include prescription drug coverage. But the plans can charge different out-of-pocket amounts and they have different rules for how you get service.
For example, you may need a referral to see a specialist. And you may need to stay in their provider network, unless you’re willing to pay more to go outside the network.
You should always check with the plan before you get a service to find out whether they’ll cover it and what your costs may be. If the plan decides to stop participating in Medicare, you’ll have to join another Medicare health plan or return to Original Medicare.
There’s a very good comparison of Original Medicare and Medicare Advantage in the “Medicare & You” handbook for more information.
You can also find “Medicare & You” at www.Medicare.gov. and the information is mailed in the fall. If you have any questions, you can always call Medicare’s toll-free number, which is 1-800-MEDICARE.
David Sayen is Medicare’s regional administrator for Arizona, California, Hawaii and Nevada, and the Pacific Trust Territories.