Original Medicare
Under Original Medicare, you must first meet a Part A deductible of $1,632 for each benefit period. In addition, you must also pay a Part B deductible of $240. After the deductibles are met, you are responsible for 20% of the total cost of services. Under Original Medicare, there is no yearly limit to what you will pay out of pocket unless you add on additional insurance coverage such as a Medicare Supplement. Original Medicare also has no prescription drug coverage. In order to ensure you do not receive penalties, you must add this coverage on separately.
Medicare Supplements
Medicare Supplement insurance plans, also known as Medigap policies, are offered by private health companies. They help pay for costs not covered by Original Medicare such as copayments, coinsurance, and deductibles. All Medicare Supplement plans have a monthly premium associated with them. In addition, you must also continue to pay your Part B premium. You have a variety of different supplement options available ranging from Plan A to Plan N. To see a comparison chart of the different Medicare Supplement options, click here. Medicare supplements are guaranteed renewable regardless of health conditions as long as you continue to pay your premium. However, they do NOT contain a prescription drug benefit, so you must purchase this separately.
Medicare Advantage
Medicare Advantage plans, also known as the Part C of Medicare, are offered by private health companies. They are required to cover all benefits included under Part A and Part B of Original Medicare, but many have additional features and benefits as well. Though some Medicare Advantage plans may have monthly premiums associated with them, these premiums are usually lower than a Medicare Supplement and many even have a $0 monthly premium. Even with a Medicare Advantage plan, you must still pay for your Part B premium. While you typically have copays or coinsurance for services rendered, Medicare Advantage plans do have a yearly limit for out-of-pocket expenses. After that limit is reached, there is no charge for covered services for the rest of the plan year. Unlike Original Medicare and Medicare Supplements, Medicare Advantage plans frequently include prescription drug coverage for no additional charge, and many offer additional benefits such as vision, dental, hearing, and more.
Prescription Drug Plans
Prescription drug plans, known as the Part D of Medicare, are also offered by private health insurance companies. They are available as a separate insurance plan or can be included in a Medicare Advantage plan. Prescription drug plans have monthly premiums, deductibles, copays, and coinsurance costs associated with them that can vary depending on the plan. Each one has its own formulary (list of drugs the plan covers), which is why it is so important to always check your current medicines when choosing a plan to make certain they will be covered. Each covered medicine is placed in a tier. The cost of the medicine will depend on which tier the medicine falls in. Medicine costs are also determined by what prescription drug stage you are currently in. Prescription drug stages are uniform across all plans. For more information about drug tiers and stages, click here.
