Medicare is a health insurance program for Americans funded by the federal government of the United States. Although Medicare is primarily for American citizens over the age of 65, some disabled people under age 65 are eligible, as are people who are in the final stages of renal disease. The federal government works with private companies that accept Medicare. There are three different types of Medicare programs available for those who meet the eligibility requirements.
The first type of Medicare program is the Original Medicare Plan. Those who opt to enroll in the Original Medicare Plan will pay a fee for every service they receive. The plan works very much like many traditional health insurance plans where the insured has a deductible and must pay coinsurance and copayments in some cases. People on this plan may go to any doctor who accepts Medicare and do not need referrals for specialists. In the event that the insured is worried about these additional costs, he or she may purchase a Medigap Insurance policy which will cover any out-of-pocket costs on the Original Medicare Plan.
Once someone has become eligible for the Original Medicare Plan, he or she may choose to have additional coverage with lower out-of-pocket costs by joining the second type of Medicare program, which is the Medicare Advantage Plans. There are four Advantage Plans. People may choose Medicare Health Maintenance Organization (HMOs), Preferred Provider Organizations (PPOs), Private Fee-for-Service plans and Medicare Special Needs Plans. Because of the lower cost of Advantage Plans, Medicare recipients who are on an Advantage Plan may not purchase Medigap Insurance.
Although the Advantage Plans offer lower copayments and deductibles, there are some slight disadvantages to some of the Advantage Medicare programs. Many of the programs require a referral to see a specialist and they have networks that dictate a person’s choice of physician. On a brighter note, most plans offer extra benefits and some of them include prescription drug coverage.
The last of the three types of Medicare Programs is the Medicare Prescription Drug Plan. Similar to the Advantage Plans, a person must be eligible for the Original Medicare Plan to enroll in a Prescription Drug Plan. Different plans are offered by insurance companies and private companies to supplement the other Medicare Programs. The Original Medicare Plan, some Medicare Advantage Plans are eligible to have a Medicare Prescription Drug Plan as an add-on.