Medicare is a complicated program with many different parts. It is important to understand what each part covers when deciding on a Medicare plan. You can get Medicare plans through two major ways: Traditional (or original) Medicare or Medicare Advantage.
Traditional Medicare
Traditional Medicare is composed of Parts A and B. Part A, also called hospital insurance, covers care in hospitals, home health care, nursing facility care, and hospice care. Part B covers preventative care, services from health care providers, home health care, outpatient care, and durable medical equipment. Medicare enrollees often choose to enroll in a Part D plan for prescription drug coverage. Medicare Part D plans are run by private insurance companies.
In a traditional plan, you also have the option of purchasing Medigap insurance which is supplemental insurance designed to help you cover the costs of original Medicare. These are standardized plans and are typically labeled G or K.
Medicare Advantage
Medicare Advantage plans are run by private insurers and are an alternative to traditional Medicare. These plans typically include coverage for Parts A, B, and D. Additionally these plans might have lower premiums and offer additional benefits like services for vision, hearing, and dental.
Major Differences
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When choosing a Medicare plan it is important to read through the different coverage options available to you and to compare prices between Traditional and Advantage plans. It’s valuable to compare premiums, copays, and deductibles between different options. Medicare’s Plan Finder Tool can help you shop for different plan options. Open enrollment begins on October 15th in 2021.
For more information on why you should shop for Medicare plans each year, click here.