There are several types of Medicare plans including Original Medicare, HMO, PPO, MSA and SNP. What does it all mean?
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Original Medicare is made up of Parts A and B and is managed by the federal government. To be eligible for Medicare you must be a U.S. citizen for a minimum of five consecutive years and meet one of the following qualifications:
- 65 Years Old
- Have Kidney Failure (End-Stage Renal Disease) or Lou Gehrig's Disease (ALS)
- Have been receiving Social Security Disability Insurance for 24 months
Inpatient hospital care, inpatient mental health care, skilled nursing services and hospice care
Doctor + Outpatient coverage
Physician services, outpatient hospital services, ambulance, outpatient mental health, laboratory services, durable medical equipment (wheelchairs, oxygen, etc), outpatient therapies and some preventative care
This plan covers Medicare Parts A and B and some Medicare Advantage Plans also cover Part D prescription drug coverage. Medicare Advantage may also be called Part C.
Medicare Advantage Plans are provided by private insurance companies, but must cover all services covered by Parts A and B of Original Medicare. Medicare Advantage plans can also include additional services not covered by Medicare such as dental, vision, hearing, fitness and travel benefits.
Additionally, Medicare Advantage Plans may come with a premium, sometimes zero, and are in the form of PPO (Preferred Provider Organization), SNP (Special Needs Plan), MSA (Medicare Savings Account), and HMO (Health Maintenance Organization). Most of these plans will provide coverage within a specific network of doctors and it is important to make sure that your doctor and/or hospital is covered when choosing these types of plans.
Preferred Provider Organization (PPO)
This Medicare Advantage Plan has contracts with doctors, but it allows you to choose any doctor who accepts Medicare beneficiaries. Doctors and other providers are divided by in-network or out-of-network based on if they have a contract.
Special Needs Plan (SNP)
There are three types of these Medicare Advantage plans that are specifically designed for those who:
–Are eligible for both Medicare and Medicaid (Dual Special Needs)
–Live in a nursing home or need nursing care at home (Institutional Special Needs)
–Qualify based on having a chronic condition as designated by Medicare (Chronic Special Needs)
Medical Savings Account (MSA)
This is a type of Medicare Advantage Plan that combines a high-deductible health insurance plan with a medical savings account. You can use the medical savings account to pay for health care services, while the high-deductible plan limits your out-of-pocket costs.
Health Maintenance Organization (HMO)
This type of Medicare Advantage Plan requires you to use doctors that are contracted by your plan. That means you’ll have to use certain doctors and hospitals for your health care to be covered.
Medicare Supplement plans, also known as Medigap, are policies sold by private insurance carriers to cover the costs that Medicare does not; such as co-payments, co-insurance and deductibles. A supplement will cover its portion of the bill after Medicare has paid its part and can offer coverage for items Medicare does not, such as travel outside of the United States, chiropractic care, and fitness memberships.
In general, Medicare Supplements do not rely on a network of doctors, but rather, will allow you to see any physician as long as they accept Medicare. Some plans may have more restrictions, so please check with your insurance carrier to confirm.
Prescription Drug Plans (Part D)
Part D of Medicare is Prescription Drug Coverage. You have two options when obtaining this coverage, stand-alone or within an MAPD (Medicare Advantage Prescription Drug) Plan. Both types of plans are offered by insurance carriers and regulated by Medicare. Medicare outlines the dollar amounts for maximum deductibles, and the costs associated with the coverage gap. Each plan determines their specific formulary, or list of drugs covered, their medication tiers and the cost to you of each medication in the specific tiers.
stand alone prescription drug plan
If you are on Original Medicare, a Medicare Supplement or certain Medicare Advantage plans without drug coverage, you may enroll in a stand-alone PDP.
medicare advantage prescription drug plan
Some MAPD plans (Part C) will combine your hospital and medical coverage with your drug coverage.