The type of Medicare coverage you choose determines more than how much your premium costs each month – your plan affects how much you spend out of pocket and how you receive services.

Let’s dive into the differences and similarities of Medicare, Medicare Advantage, Medigap and Medicaid so you can make the best Medicare coverage decision for your needs and lifestyle.

Medicare Part A

This is hospital insurance, which generally covers medically necessary:

• Home healthcare 
• Hospice care
• Inpatient hospital stays and care
• Skilled nursing facility services

For Part A, you usually don’t pay a monthly premium if you or your spouse paid Medicare payroll taxes for an extended length of time – at least 10 years. However, some people will pay a monthly premium. Regardless of your monthly premium cost, everyone pays the same deductible, copays and coinsurances for healthcare services.

Medicare Part B

This is medical insurance. Although this is not a complete list, Part B generally covers medically necessary:

• Alcohol use counseling
• Chemotherapy
• Doctor visits
• Durable medical supplies and equipment
• Preventive care (such as screenings, vaccinations and wellness visits)
• Outpatient care
• Outpatient mental healthcare
• Physical therapy
• Preventive care and screenings
• Vaccinations (such as for influenza and pneumococcal)

 

Part B typically requires that you pay a standard premium each month.

Original Medicare

Original Medicare is another name for Medicare Parts A and B. This fee-for-service plan covers most – but not all – basic and medically necessary healthcare services and supplies. With Original Medicare, you will pay a deductible and 20% coinsurance anytime you receive Medicare-approved care.

Medicare Supplement Insurance

Also called Medigap, this is a supplemental plan option chosen alongside Original Medicare to help pay for additional out-of-pocket costs, including: 

• Deductibles
• Copays
• Coinsurance

Medigap plans are offered by Medicare-approved private health insurance companies and have a monthly premium. Some Medigap plans also provide additional benefits not covered by Original Medicare, such as healthcare coverage for traveling outside of the U.S. These plans do not include prescription drug coverage.

Medicare Part C

Also called Medicare Advantage (MA), these are plans through Medicare-approved private health insurance companies that administer the benefits of your Original Medicare. Even though you receive benefits from a private health insurance company, you are still in the Medicare program, with Medicare rights and protections.

Not all Part C plans work the same, but many offer additional coverage options that are not provided through Original Medicare, including coverage for chronic illness, dental, hearing and vision care, as well as drug coverage.

Part C plans also have an out-of-pocket maximum each year for covered services, helping to protect you from excessive annual healthcare costs.

With a Part C plan, you'll likely be required to use healthcare providers within the plan’s network, known as in-network providers. Some, but not all, Part C plans offer out-of-network coverage but for a higher out-of-pocket cost.

When shopping for Medicare Advantage plans, you may also see these acronyms for other MA plans: PPO, HMO and SNP. You can learn more about these plans at medicare.gov.

To learn more about Medicare Advantage plans from Sanford Health Plan, download our free guide.

Medicare Part D

This is prescription drug coverage through a Medicare-contracted private insurance company. It may help lower the cost you pay for your prescription medications. You will pay a monthly premium for Part D.

Part D cannot be combined with Part C plans that provide prescription drug coverage. If you have both, you will be disenrolled from Part C and instead returned to Original Medicare with Part D coverage.

 

In this episode of our podcast, Medicare Simplified, we focus on the fundamentals you need to know if you are new to Medicare and the options you have.

Read the full podcast transcript here.

 

Medicaid

Medicaid is a state and federal program providing free or low-cost healthcare coverage to millions of people in the U.S. who meet eligibility requirements based on assets and income. If you are eligible, you can have both Medicare and Medicaid coverage. They will work together to cover and lower your healthcare costs.

Download a free guide to Medicare Advantage plans from Align powered by Sanford Health Plan or contact a licensed agent at (888) 535-4831 (TTY: 711) Monday through Friday from 8 a.m. to 5 p.m. local time, excluding holidays, to learn more.

Align powered by Sanford Health Plan is a PPO plan with a Medicare contract. Enrollment in Align powered by Sanford Health Plan depends on contract renewal. Sanford Health complies with applicable federal civil rights laws and does not discriminate, exclude or treat people differently based on race, color, national origin, religion, pregnancy and related conditions, sex (including sexual orientation, gender identity, sex stereotypes, sex characteristics and intersex traits), age, disability, health status, marital status, arrest or conviction record or military participation in the administration of the plan, including enrollment and benefit determinations.

Free interpretation services are available to you. Additional services and resources necessary to provide information on accessible formats are also available at no cost. Call (877) 509-4979 (TTY: 711) or speak with your healthcare provider. Spanish: Si habla español, tiene a su disposición servicios gratuitos de asistencia lingüística. También están disponibles de forma gratuita ayuda y servicios auxiliares apropiados para proporcionar información en formatos accesibles. Llame al (877) 509-4979 (TTY: 711) o hable con su proveedor. Oromo: Yoo afaan Oromoo dubbattu ta'e, tajaajilli gargaarsa afaanii bilisaa siniif ni argama. Gargaarsi gargaaraa fi tajaajilli sirrii ta’ee fi odeeffannoo bifa dhaqqabamaa ta’een kennuunis bilisaan ni argama. Bilbilaa (877) 509-4979 (TTY: 711) yookiin dhiyeessaa kee waliin haasa'aa.

If you require large-print materials, please call (877) 509-4979 (TTY: 711).

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