Medicare Basics

Medicare Health Plans

Medicare gives you choices in how you get your health and prescription drug coverage. A person can choose Original Medicare, one of the Medicare Advantage Plans, or other Medicare plans.

(Watch the video to learn more about the different ways you can get Medicare coverage. To enlarge the video, click the brackets in the lower right-hand corner. To reduce the video, press the Escape (Esc) button on your keyboard.)

Original Medicare

Original Medicare is managed by the Federal government and lets people with Medicare go to any doctor, hospital, or other health care provider who accepts Medicare. It is a fee-for-service plan, meaning that the person with Medicare usually pays a fee for each service. Medicare pays its share of an approved amount up to certain limits, and the person with Medicare pays the rest.

People in Original Medicare must choose and join a Medicare Prescription Drug Plan if they want to get Medicare prescription drug coverage.

Medicare Advantage Plans

Medicare Advantage Plans are health plans approved by Medicare and run by private companies. They are part of the Medicare program, and are sometimes called "Part C."

Medicare Advantage Plans are available in many areas of the country, and a person who joins one of these plans

  • is still in the Medicare program
  • still has Medicare rights and protections
  • still gets all regular Medicare-covered services offered under Part A and Part B.
  • may get additional benefits offered through the plan, including Medicare prescription drug coverage. Other extra benefits could include coverage for vision, hearing, or dental care, and/or health and wellness program.

Medicare Advantage Plans include Medicare Health Maintenance Organization (HMO) Plans, Medicare Preferred Provider Organization (PPO) Plans, Medicare Private Fee-for-Service (PFFS) Plans, Medicare Special Needs Plans (SNPs), and Medicare Medical Savings Accounts (MSAs).

In most of these plans, there are generally extra benefits and lower co-payments than in Original Medicare. However, a person may have to see doctors that belong to the plan or go to certain hospitals to get services. A person can switch plans each year in the fall, if desired.

How to Join

To join a Medicare Advantage Plan, a person must

  • live in the plan's geographic service area or continuation area
  • not have End-Stage Renal Disease (ESRD)
  • have Medicare Part A and Part B
  • pay the monthly Medicare Part B premium to Medicare. In addition, it might be necessary to pay a monthly premium to the Medicare Advantage Plan for the extra benefits that they offer.

When to Join

People can join a Medicare Advantage Plan when they first become eligible for Medicare. They can switch to another Medicare Advantage Plan or to Original Medicare during the Annual Election Period from October 15 - December 7. A person can only belong to one Medicare Advantage program at a time, and enrollment in a plan is generally for a calendar year.

Switching to Original Medicare

Between January 1 through February 14, a person can leave an MA plan and switch to Original Medicare. If the person makes this change, he or she may also join a Medicare Prescription Drug Plan to add drug coverage. Coverage begins the first of the month after the plan receives the enrollment form.

For More Information

To find out what Medicare Advantage Plans are available in your area, visit www.medicare.gov and choose the link Compare Health Plans and Medigap Policies in Your Area to use the Medicare Options Compare tool, or call 1-800-MEDICARE (1-800-633-4227).

Medigap

People who choose Original Medicare may want to consider Medigap, a type of Medicare supplement insurance. Medigap policies are sold by private insurance companies to fill gaps in Original Medicare Plan coverage, such as out-of-pocket costs for Medicare co-insurance and deductibles, or for services not covered by Medicare. A Medigap policy only works with Original Medicare. A person who joins a Medicare Advantage Plan generally doesn't need (and can't use) a Medigap policy.

The PACE Program

Programs of All-Inclusive Care for the Elderly (PACE)

Other plans include Medicare Cost Plans and Programs of All-Inclusive Care for the Elderly (PACE). PACE combines medical, social, and long-term care services, and prescription drug coverage for frail, elderly people who get health care in the community.

To qualify for PACE, people must be at least age 55, live in the PACE service area, meet their state's standard for nursing home level care, and be able to live safely in a community setting at the time of enrollment. Call the State Medical Assistance (Medicaid) office or visit Pace to find out about eligibility and to see if there is a PACE site nearby.

Help in Choosing a Plan

To get help choosing a Medicare health plan, call 1-800-Medicare (1-800-633-4227). TTY users should call 1-877-486-2048. To compare health plan choices in your area, visit www.medicare.gov, and click on “Find health & drug plans."