Understanding "original medicare" and your healthcare options

When you become eligible for Medicare, the term "Original Medicare" often comes up, but its meaning isn't always clear. It's the traditional, government-run health insurance program that's been in place for decades. Understanding what it covers and how it works is the first step in making informed decisions about your healthcare.

what original medicare includes

Original Medicare consists of two main parts: Part A and Part B. Part A, often called hospital insurance, helps cover inpatient care in a hospital, skilled nursing facility care, hospice care, and some home health care. Most people don't pay a monthly premium for Part A if they or their spouse paid Medicare taxes through employment for a certain number of years.

Part B, or medical insurance, helps cover doctor's services, outpatient care, home health services, durable medical equipment, and many preventive services. For Part B, most people pay a monthly premium, which can be deducted directly from your Social Security benefit. It's important to remember that Original Medicare does not have an annual out-of-pocket maximum, which means there's no cap on what you might pay for your share of costs in a given year.

your choices with original medicare

Electing Original Medicare means you can see any doctor, hospital, or healthcare provider in the U.S. that accepts Medicare. You don't need a referral to see a specialist, which offers a great deal of flexibility. However, Original Medicare typically covers about 80% of approved costs, leaving you responsible for the remaining 20% (your coinsurance), plus deductibles. There's no limit to how much you might have to pay out-of-pocket for these costs.

This is where additional choices come in: Many people choose to add a Medicare Supplement Insurance (Medigap) policy to Original Medicare. Medigap policies are sold by private companies and help pay some of the remaining healthcare costs not covered by Original Medicare, such as copayments, coinsurance, and deductibles. They work with Original Medicare, not instead of it. By adding a Medigap policy, you can significantly reduce your out-of-pocket expenses.

part D and advantage plans as alternatives

Original Medicare also doesn't cover most prescription drugs. To get prescription drug coverage, you would typically join a stand-alone Medicare Part D plan, which is offered by private insurance companies approved by Medicare. These plans help cover the cost of prescription medications.

Alternatively, some people choose to enroll in a Medicare Advantage Plan (Part C) instead of Original Medicare. Medicare Advantage Plans are offered by private companies approved by Medicare. They provide all your Part A and Part B benefits and often include Part D prescription drug coverage and additional benefits like dental, vision, and hearing care. However, with Medicare Advantage Plans, you typically receive care through a network of doctors and hospitals, similar to an HMO or PPO, and may need referrals for specialists. This is a key difference from the flexibility offered by Original Medicare.

Understanding these foundational elements is crucial. Original Medicare provides a solid base, and recognizing your options for supplemental coverage (Medigap and Part D) or alternative all-in-one plans (Medicare Advantage) allows you to tailor your healthcare coverage to your personal needs and financial situation.