Detroit Free Press had an interesting and informative article about the different coverages that Medicare provides. Medicare is a federal insurance plan that provides basic coverage for medical care to seniors and people with certain physical disabilities.
There are different types of Medicare policies. Two are basic plans:
Part A: Coverage for hospital care, limited nursing home stays and some home health care. Most people who have been employed get Part A coverage without having to pay a monthly premium. Recipients, however, do have out-of-pocket expenses, such as co-pays.
Part B: Coverage many seniors purchase from Medicare for other physician and outpatient services, some home health care and some medical equipment. Enrollment typically is automatic once you qualify for Medicare. Recipients pay a monthly premium plus a typical 20% co-pay and other out-of-pocket costs.
In addition to the plans above, you can purchase the following policies from insurance companies on your own:
Part C: Also known as Medicare Advantage, these are plans that usually provide more comprehensive coverage for prescription and generic drugs and sometimes dental and vision care, contributions towards gym memberships and diet-related programs and other care. Medicare Advantage plans include all Part A and B coverage, so you don’t need the two basic plans if you have a Medicare Advantage policy.
Part D: Also known as a stand-alone prescription drug plan, these policies pay for outpatient prescription and generic drug coverage. If you don’t sign up immediately for one of these plans when you reach age 65, you face penalities ranging from a few dollars to more than a $100 a month.
Medigap: Also known as Supplemental Medicare, these plans pay for additional physician and outpatient care services, but often not prescription coverage, necessitating the purchase of a Part D plan. While these plans typically have not required a co-pay, new plans being offered in 2011 are introducing small co-pays such as $2 to $50 for a doctor’s or emergency room visit, a trend likely to continue in the future.