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Understanding Medicare

Understanding the differences between Original Medicare and a Medicare Advantage plan is important in helping you choose the right coverage for your needs.

You’re probably aware that you may be eligible for certain medical benefits from the government when you turn 65. This program is known as “Original Medicare” (or Parts A and B).

  • Medicare Advantage (or Part C) was launched in 1995 when the federal government created a way for private health care companies to sell new plans under a strict regulatory framework that combines both Part A (Hospital) and Part B (Doctor) coverage in a single plan.
  • All Medicare Advantage plans offer at least the same benefits as Medicare Parts A and B. That means if Original Medicare covers hospital care at a certain level, so will every Medicare Advantage plan on the market.

But the benefit of Medicare Advantage plans is that they offer more coverage than Original Medicare, and many also include prescription drug coverage.

The 4 Parts of Medicare

An important step in understanding Medicare is learning about its four “parts” — each of which covers a different area of health care costs and is designated by a letter, A through D.

  • Medicare Part A helps cover your inpatient care in hospitals and skilled nursing facilities, excluding custodial and long-term care. It also helps cover hospice and some home health care. Typically, you become eligible for Part A when you turn 65, even if you’re still working. During your working years, you have probably paid for Part A through payroll deductions. For this reason, most people don’t pay a premium for Part A. You should be aware that Part A does not pay all of your hospital expenses; you are responsible for copayments and a deductible.

  • Medicare Part B helps cover doctors’ services and outpatient care. It also helps pay for some preventive care and services Part A doesn’t cover, including physical and occupational therapy and some home health care (if these services are considered medically necessary). Most people must pay a monthly premium for Part B coverage. It’s important that you sign up for Part B when you become eligible; otherwise your Part B premium may be higher if you sign up late.

    Parts A and B together cover much of the medical care you need, but not all of it. For example, Parts A and B (called Original Medicare) do not cover prescription drugs. This is where Parts C and D come into the picture.

  • Medicare Part C, more commonly known as Medicare Advantage coverage, acts as an alternative to Parts A and B. This coverage is offered by private companies approved by and under contract with The Centers for Medicare and Medicaid Services (CMS). To join a Medicare Advantage plan, you must be enrolled in both Medicare Parts A and B. You must continue to pay your Part B premium and, usually, a monthly premium for the coverage.

    • Medicare Advantage plans provide all of the benefits of Part A and Part B coverage. Plus, they usually offer extra benefits not covered by Original Medicare, such as vision, hearing, dental, wellness programs and disease management programs.
    • Part D prescription drug coverage is often included in Medicare Advantage plans.
    • Unless your plan also provides out-of-network benefits, care is received from a primary care doctor, specialist or hospital in the plan’s network, except for emergencies and urgently needed care.

    You have the convenience of one ID card, and you don’t have to pay separate premiums for your medical and prescription drug coverage.

  • It’s important to know that Original Medicare does not cover most prescription drugs. Medicare Part D was created to help lower your current prescription drug costs and help protect against higher costs in the future. Like a Medicare Advantage plan, Part D coverage is only available from private insurers that contract with Medicare.

    • Part D plans provide benefits for both brand name and generic prescription drugs at participating pharmacies.
    • Many people pair a Medicare Prescription Drug Plan with a Medicare Supplement plan, an insurance plan sold by private companies that helps fill “gaps” in Original Medicare.
    • Braven Health does not currently offer standalone Part D coverage or Medicare Supplement plans. If you want to learn more about these types of plans, visit Medicare.HorizonBlue.com to learn about the plan options offered by Horizon Blue Cross Blue Shield of New Jersey.