Medicaid is the health care program for low-income individuals who can not otherwise afford Medicare or other commercial health insurance plans. The program is funded in part by the federal government and by the state in which the enrollee lives. What’s the difference between Medicare and Medicaid?
Medical underwriting is a process used by insurance carriers to evaluate whether to accept an applicant for coverage or to determine the premium rate for the policy. It doesn’t apply to most parts of Medicare, but medical underwriting is used when people enroll in Medigap plans outside of their initial enrollment period or the limited special enrollment periods that are available.
Medically necessary refers to services or supplies that are necessary for diagnosis or treatment of a medical condition.
Medicare Advantage – or Medicare Part C – allows Medicare beneficiaries to receive Medicare-covered benefits through private health plans instead of through Original Medicare. Advantage plans often include additional benefits – beyond those included in Medicare Part A and Part B – such as prescription drug coverage, dental and vision coverage, and even gym memberships.
Medicare Advantage enrollees pay Part B premiums (deducted from Social Security checks for beneficiaries receiving Social Security) plus the premium for their Medicare Advantage plan. Some Medicare Advantage plans have no premium at all, leaving the beneficiary to only pay the Part B premium.
Medicare Advantage plans have built-in caps on out-of-pocket costs ($6,700 is the maximum out-of-pocket in 2018), which is not the case for Original medicare.
But Medicare Advantage coverage is typically limited to network of providers, usually in a local area — as opposed to Original Medicare’s nationwide coverage area. An Advantage plan may be an HMO, PPO or private fee-for-service plan, but it must be approved by Medicare and follow its guidelines.
During the annual Medicare open enrollment period (October 15 through December 7), Medicare beneficiaries can change Advantage plans, switch from Medicare Advantage back to Original Medicare or vice versa. Changes made during open enrollment are effective on January 1.
As of 2017, a third of all Medicare beneficiaries were enrolled in Medicare Advantage plans, up from 13 percent in 2004.
You can read more about the choice between Original Medicare and Medicare Advantage here.
Medicare Advantage is an alternative to Original Medicare, and it combines Medicare Part A and Part B into one, privately-offered plan. An MA-PD also includes Part D coverage, so a person who selects an MA-PD would have Part A, B, and D coverage, all under one plan (note that in addition to the Medicare Advantage premiums, the enrollee still has to pay Part B premiums directly to the government; in most cases, this is in the form of a deduction from his or her Social Security check).
Almost all Medicare Advantage plans are MP-PDs: 88 percent of Medicare Advantage plans included prescription drug coverage as of 2017.
A Medicare cost plan is similar to a Medicare Advantage plan in that enrollees have access to a network of doctors and hospitals, and may have additional benefits beyond what’s provided by Original Medicare. But unlike Medicare Advantage plans, a cost plan offers policyholders the option of receiving coverage outside of the network, in which case the Medicare-covered services are paid for through Original Medicare. Some cost plans may include prescription drug coverage. Enrollees can join a Medicare cost plan when it’s accepting new members, but may decide to return to Original Medicare at any time, since a cost plan works in tandem with (as opposed to a replacement for) Original Medicare.
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (which rebranded Medicare+Choice as Medicare Advantage) created a competition clause that banned Medicare Cost plans from operating in areas where they faced substantial competition from Medicare Advantage plans. The implementation of the competition clause was delayed, but legislation enacted in 2015 (MACRA) required the competition clause to be implemented as of 2019.
As of 2018, there were about 625,000 people enrolled in Medicare cost plans nationwide. And two-thirds of them were in Minnesota (the rest are spread across Arizona, California, Colorado, District of Columbia, Florida, Iowa, Maryland, North Dakota, Nebraska, New York, South Dakota, Texas, Virginia, and Wisconsin; most states do not have Medicare cost plans available).
But there will be far fewer Medicare cost plan enrollees as of 2019, due to the implementation of the Medicare Advantage competition clause. 320,000 people in Minnesota will have to pick new coverage for 2019 (either Medicare Advantage or Original Medicare — with the option to supplement the Original Medicare with a Part D plan and/or a Medigap plan). People who still have Medicare cost plans available in their area can still enroll, but the number of people who will have access to such plans in 2019 will be much smaller.
Medicare open enrollment – also known as the annual election period or annual coordinated election period – refers to the annual period (October 15 through December 7) during which Medicare plan enrollees can reevaluate their coverage — whether it’s Original Medicare with supplemental drug coverage, or Medicare Advantage — and make changes if they want to do so.
During Medicare open enrollment, a beneficiary can:
- switch Medicare Advantage plans, switch from Medicare Advantage back to Original Medicare or vice versa,
- join a Medicare Part D prescription drug plan,
- switch from one Part D plan to another, or
- drop Medicare Part D coverage entirely.
But the annual open enrollment does not apply to Medigap plans, which are only guaranteed-issue in most states during a beneficiary’s initial enrollment period, and during limited special enrollment periods.
Medicare open enrollment begins on October 15 and ends on December 7, with changes effective on January 1.
Starting in 2019, there’s another open enrollment period that only applies to people who have coverage under Medicare Advantage plans. The Medicare Advantage open enrollment period runs from January 1 to March 31, and allows Medicare Advantage enrollees to either switch to Original Medicare (plus a Part D plan if they want one) or switch to a different Medicare Advantage plan. Enrollees are only allowed to make one change during this three-month window — they can’t switch to a Medicare Advanage plan in February and then switch to a different one in March, for example.
Medicare Part A or “hospital insurance” covers inpatient care, including inpatient hospital stays (of at least one night), skilled nursing facility stays (if they meet criteria), some home health care and hospice care. Find out how to enroll and what Medicare Part A costs.
Note that Medicare does not cover custodial care (ie, help with activities of daily living) in a nursing home or at home.
Original Medicare is made up of two parts: Medicare Part A (inpatient) and Medicare Part B (outpatient).
Medicare Part B or “medical insurance” covers medically necessary outpatient expenses, including physician and nursing fees, as well as a range of services (such as x-rays, diagnostic tests, some vaccinations and renal dialysis) and some equipment.
Find out how to enroll and what Medicare Part B costs (although most seniors receive Medicare Part A for free, Medicare Part B has a monthly premium, which can fluctuate from year to year. In most cases, the Part B premium is simply withdrawn from your Social Security check).
The plans are required to offer the benefits that are covered by Medicare Part A and Part B, but they can also offer additional benefits, such as prescription drug coverage (88 percent of Medicare Advantage plans included prescription coverage in 2017), or dental and vision coverage.
In exchange for the additional benefits, coverage is typically limited to a local network of providers, rather than the broad, nationwide access to provider that Original Medicare beneficiaries have.
Medicare Advantage enrollees pay the premium for Part B (an average of $130/month in 2018), plus the premium for their Medicare Advantage plan.
33 percent of all Medicare beneficiaries were enrolled in Medicare Advantage plans in 2017, with the remaining two-thirds enrolled in Original Medicare.
Medicare Part D is prescription drug coverage that subsidizes the costs of prescription drugs for Medicare beneficiaries. Medicare recipients select the coverage by enrolling in either a prescription drug plan (PDP) – which covers only prescription drugs – or a Medicare Advantage plan, which covers prescriptions and other medical expenses. Enrollees pay a co-pay for each prescription, a monthly premium and an annual deductible. Find out how to enroll and what Medicare Part D coverage costs.
Medicare Select is a type of Medicare supplement (Medigap) plan sold in some states that can be any of the standardized Medigap plans (A-N) but which requires policy holder to receive services from within a defined network of hospitals and – in some cases – doctors in order to be eligible for full benefits.
As a Medicare beneficiary, you will receive a Medicare Summary Notice (MSN) if you receive a Medicare-covered service. The MSNs will be mailed to you every three months and will detail the services and supplies you received, how much Medicare will pay, and how much you need to pay the provider. The MSN is not a bill.
If you don’t believe your MSN is correct, or if payment is being denied, you should call your provider/physician first to be sure they submitted the right information. If you decide to appeal, you need to do it within 120 days of the day you receive the MSN. Appeal information will be listed on the MSN.
You can also read Your Medicare Rights and Protections online or call 1-800-MEDICARE to have a copy mailed to you.
Medicare supplement insurance plans – sold by private insurance companies – offer supplemental benefits to fill gaps in Original Medicare coverage. The plans – also known as Medigap – offer combinations of benefits, covering expenses ranging from copayments and deductibles to foreign travel emergency expenses and preventive care. Find out how to enroll and what Medigap coverage costs.
Medigap plans – sold by private insurance companies – offer supplemental benefits to fill gaps in Original Medicare coverage. The plans – also known as Medicare supplement insurance – offer combinations of benefits, covering expenses ranging from copayments and deductibles to foreign travel emergency expenses and preventive care. Find out how to enroll and what Medigap coverage costs.
You are eligible to enroll in a Medigap policy – without the possibility of being denied coverage – during a six-month window that begins the first month that you’re at least 65 years old and are also enrolled in Medicare Part B. If you apply for coverage after that six-month window has ended, insurers in most states have the right to reject your application or charge you more based on your medical history.
Medigap protections – also known as “guaranteed issue rights” – require insurance carriers by law to offer you a Medigap policy, prohibiting the carrier from denying you coverage or charging you more for coverage based on reasons that include pre-existing conditions – as long as you enroll during your initial enrollment period or during limited special enrollment periods that are triggered by certain qualifying events.