Understanding Medicare

Did you know that Medicare coverage is divided into several categories—or parts—to allow you to customize your coverage to your situation? Here’s a quick overview.

Medicare Parts A and B – Original Medicare
Medicare Part A is a Federal program that covers inpatient care in hospitals, skilled nursing facility care, hospice care, and home healthcare. Most people don’t need to pay a Part A monthly premium because they (or their spouse) contributed into Social Security while working.

Medicare Part B is a Federal program that covers doctors’ services and other outpatient care. There is a monthly premium for Part B based on income. The purchase of Part B is optional and there may be a late enrollment penalty if you do not sign up when you are first eligible for Medicare.

It’s important to know what Medicare Parts A and B do NOT cover:
In addition to Original Medicare’s copayments, coinsurance, and deductibles, you will also have to pay for services that are not covered by Original Medicare, including but not limited to:

  • Custodial care (help with bathing, dressing, eating, and using the bathroom) unless it is part of skilled nursing or hospice care
  • Long-term care
  • Orthopedic shoes
  • Most prescription drugs
  • Syringes or insulin, except insulin used with an insulin pump
  • Care you receive while traveling outside the United States

Medicare Part C – Medicare Advantage
Medicare Part C allows you to get Medicare coverage through a private insurer. Generally, you must use plan providers except in emergency or urgent care situations.
Medicare Advantage plans:

  • Simplify your coverage, with only one benefit plan and one membership card
  • Offer additional benefits than Original Medicare
  • Have different cost-sharing than Original Medicare
  • Offer out-of-pocket cost limits on some services
  • May provide Part D prescription drug coverage
  • Have provider networks
  • May have a monthly premium in addition to the Part B premium

Medicare Part D – Prescription Drug Coverage
Medicare Part D is optional coverage offered by private insurers that includes prescription drugs not
covered under Medicare Parts A or B. There may be a late enrollment penalty if you do not sign up when
you are first eligible for Medicare. There are two ways to get Part D coverage:

  • A stand-alone Medicare Prescription Drug Plan (called a “PDP”)
  • As part of a Medicare Advantage plan (called an “MA-PD”)
  • In general, plans can have:
  • A monthly premium
  • A formulary of covered drugs
  • Copayments and/or coinsurance
  • A pharmacy network
  • A deductible

Medicare Supplement Plans (Medigap)
Medicare Supplement plans offer coverage that fills the gaps in Original Medicare (Parts A and B). These Medigap plans, like Medicare Advantage plans, are offered through private insurers. Depending on the policy, Medigap plans cover part or all of the deductibles, copayments, and coinsurance under Original Medicare. They offer the flexibility of being able to go to any Medicare participating provider.

With Medigap plans, you:

  • Must have Original Medicare (Parts A and B)
  • Must pay the Part B monthly premium
  • Cannot be enrolled in a Medicare Advantage plan
  • Can enroll in a Medicare Part D prescription drug plan separately

Last updated: 10/11/2013

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Blue Cross & Blue Shield of Rhode Island is an HMO plan with a Medicare contract. Enrollment in Blue Cross & Blue Shield of Rhode Island depends on contract renewal.