- Original Medicare was signed into law on July 30, 1965.
- Original Medicare consists of Part A (hospital insurance) and Part B (medical insurance).
- Part A provides broad coverage of inpatient expenses.
- Part B covers most medically necessary services – including physician and nursing fees, x-rays, diagnostic tests, blood transfusions, chemotherapy, renal dialysis, and some vaccinations – and also preventive services.
- Most prescription drugs are not covered by Original Medicare. Dental care and routine vision services are also not covered by Original Medicare.
- Original Medicare does not cap out-of-pocket costs, so most enrollees have supplemental coverage.
What is Original Medicare?
Original Medicare is just that: the components of the Medicare program signed into law by President Lyndon B. Johnson on July 30, 1965.
Sometimes called “Traditional Medicare,” Original Medicare is the fee-for-service program in which the government pays directly for the health care costs you incur. The coverage allows you to see a doctor anywhere in the country (as long as the doctor accepts Medicare).
When it became law, Medicare consisted of two parts – and they’re the same two parts providing coverage to millions of Americans more than 55 years later:
Medicare Part A – hospital insurance
Medicare Part A is called “hospital insurance” because it provides broad coverage of inpatient expenses, including not only hospital visits, but also care in skilled nursing facilities, hospice care, and home health services. The coverage is typically free if you or your spouse paid Medicare taxes during the years you worked, although there are premiums of up to $471/month in 2021 if you and your spouse have little or no work history.
How to enroll in Part A.
Medicare Part B – medical insurance
While Part A basically covers inpatient services, Medicare Part B is also referred to as “medical insurance” because it covers medically necessary services – including physician and nursing fees, x-rays, diagnostic tests, blood transfusions, chemotherapy, renal dialysis, and some vaccinations – and also preventive services.
Although most medically necessary services are covered by either Part A or Part B, most outpatient prescription drugs are not (Part D coverage is necessary for prescription benefits, unless a person has other creditable coverage). Dental care is also not covered under Original Medicare, and neither is routine vision care.
Enrollees pay a monthly Part B premium ($148.50/month for most enrollees as of 2021).
How to enroll in Part B.
Unlike private health insurance plans, Original Medicare does not have a cap on out-of-pocket costs — coinsurance charges continue to add up for the duration of a beneficiary’s treatment. To cover out-of-pocket costs, most enrollees have supplemental coverage, either from an employer-sponsored plan, Medicaid, or a Medigap supplement.
Medicare Advantage is an alternative to Original Medicare
Medicare beneficiaries in most parts of the country have the option to enroll in Medicare Advantage instead of Original Medicare. Medicare Advantage plans combine Parts A and B into one private plan, and usually incorporate Part D prescription drug coverage as well, in addition to other benefits such as dental and vision coverage.
But Medicare Advantage enrollees are confined to their plan’s provider network, rather than having access to doctors and hospitals all across the country. The majority of Medicare beneficiaries select Original Medicare, but more than a third pick Medicare Advantage plans, and that percentage has been increasing with time.