Original Medicare is our country’s federal health insurance program available for people over 65, people with disabilities including ALS, and end-stage kidney disease. It includes Part A (hospital insurance) and Part B (medical insurance) and works on a fee-for-service basis. You can receive services from any provider or facility that accepts Medicare. You have to pay for services that Medicare doesn’t cover and monthly premiums, annual deductibles, coinsurance, and copays.
Once you’re enrolled in Original Medicare you can sign up for Medicare Supplement Insurance to help pay for out-of-pocket costs. You can also purchase a drug coverage plan. Alternatively, you can get your Part A and Part B benefits through a Medicare Advantage Plan with or without drug coverage. These plans are offered through private insurers and provide different types of benefits. These include:
- Medicare Advantage (MA) plans (also known as Part C) are set up like an HMO or PPO with yearly maximum out-of-pocket costs, and may also provide coverage for prescription drugs, dental, vision, and hearing needs, which Original Medicare doesn’t cover.
- Part D plans cover prescription drugs.
- Medicare Supplement Insurance (Medigap) can help cover the costs of deductibles, copayments, and coinsurance that occur when you receive your Part A and B services. (Note: Those born after January 1, 2020 cannot use Medigap insurance to cover Part B deductible costs.)
You must have Part A and Part B to join a MA, Part D, or Medigap plan. You cannot have a MA and a Medigap plan at the same time.
Medicare Part A
Part A is considered the “hospital insurance” portion of Medicare, meaning it covers inpatient stays at hospitals and skilled nursing facilities (for skilled care only, not for custodial care) hospice care, and home health care.
Most people do not have to pay a monthly premium for Medicare A because they have worked and paid Medicare taxes.If you don’t qualify for premium-free Medicare A, you can buy it, and the premium is based on how long you or your spouse worked while paying Medicare taxes. In 2022, if you paid taxes for less than 30 quarters, you will pay $499 per month. If you worked and paid taxes between 30 and 39 quarters, your monthly premium will be $274.
There are also very specific rules about how much Part A will cover, which change every year. In 2022, Part A requires a deductible of $1,556 for each benefit period and a $389 coinsurance daily fee for each day after 60 days of care is reached (before 60 days, there is no coinsurance fee). After 91 days, the coinsurance rate increases to $778 for each lifetime reserve day and after lifetime reserve days are used up, you are required to pay all costs.
Medicare Part B
Medicare Part B refers to the “medical insurance” portion of Medicare.It covers doctor’s visits, medically necessary outpatient care like X-rays and lab tests, outpatient surgery, emergency services, some medical supplies, and preventative care, like a yearly wellness check.
There is a monthly premium fee you have to pay with Medicare Part B. In 2022, the monthly premium cost is $170.10. However, the exact monthly fee you will pay is based on your income. If your yearly gross income exceeds a certain amount, you will be required to pay both the monthly premium and an Income Related Monthly Adjustment Amount (IRMAA).
In addition to a monthly premium and an IRMAA, Medicare Part B has a deductible ($233 in 2022) you have to meet before coverage kicks in. After your deductible is met, you are usually responsible for 20% of the costs of your health service.
What isn’t covered by Original Medicare?
Original Medicare doesn’t cover everything you might need for your healthcare. First, Original Medicare does not include Part D, which is coverage for prescription drugs. If you enroll in Original Medicare and choose a Medigap plan instead of an Advantage plan, you will need to enroll in a stand-alone Part D plan and pay its associated monthly premiums separately.
Additionally, Original Medicare will not cover the following health-related needs:
- Long-term care, also called custodial care. Custodial care is considered care for normal activities of daily life, such as getting dressed, using the restroom, or getting dressed. These are tasks you may need assistance with, but do not require highly-skilled professionals to perform. Custodial care in nursing homes is not usually covered by Medicare insurance.
- Dental. Most routine dental care, as well as dentures, is not covered through Medicare.
- Vision. Routine vision care is not part of Medicare, nor are eye exams specific to getting prescription glasses.
- Hearing. Any hearing care, including hearing aids and exams and check-ups for fitting hearing aids, are not covered.
- Cosmetic Surgery. Cosmetic surgery would include any enhancements or procedures that are not deemed medically necessary.
- Acupuncture. Acupuncture, even through a licensed provider, is not typically covered by Medicare, although there is a benefit for limited acupuncture for low back pain.
- Routine foot care. Foot care that is considered routine, such as getting your toenails clipped, is not covered under Medicare. Foot care that requires a specialist may be covered, however.
Other coverage options
Because Original Medicare does not cover all healthcare costs, you may choose to purchase a Medigap plan to supplement Original Medicare. Or, as an alternative to Original Medicare, you may choose to join a Medicare Advantage Plan. Read below for more information about these two types of coverage. Both are sold by Medicare-approved private insurance companies that must follow Medicare rules.
What is Medigap insurance?
Medigap insurance is supplemental private health insurance that is specifically offered to cover the “gaps” in Original Medicare coverage. For example, it can help cover the costs of deductibles (except your deductible for Part B for those born after January 1, 2020), copayments, and coinsurance.
Medigap insurance is only available for people who are enrolled in Original Medicare. It’s not legal for anyone on a Medicare Advantage Plan to have Medigap insurance. Unlike Original Medicare, which you apply for directly on the Social Security website, Medigap insurance is purchased from a private insurance company. You’ll pay a separate monthly premium to the insurance company for your Medigap insurance policy.
Although Medigap is designed to cover the “gaps” of Original Medicare expenses, it doesn’t cover all your healthcare costs. For instance, Medigap insurance only helps pay for Medicare-covered services and does not cover things like long-term care, vision care and eyeglasses, dental care, hearing aids, or private-duty nursing care.
What is Medicare Advantage?
Also known as Part C, Medicare Advantage covers everything that Original Part A and Part B does, but is offered through private insurers. Some Medicare Advantage plans also offer additional coverage for vision, hearing, and dental benefits; most plans also include a Part D prescription plan.
Original Medicare Part A and Part B only covers 80% of the costs of medical services. Medicare Advantage plans cover everything Part A and Part B cover, but have a different cost sharing structure. They charge a copayment or coinsurance for services and typically require that you use in network providers. Part C plans have a set yearly maximum out-of-pocket cost that applies toward Medicare-covered services.
Specific costs per plan vary as each private insurer sets its own pricing, which must be approved by Medicare. In many areas of the country you will pay a $0 premium for Advantage Plans, however a monthly premium may be incurred and will be in addition to your Part B premium. Plan pricing can also be affected by whether other benefits are included in the plan.
Original Medicare vs. Medicare Advantage
Whether you choose Original Medicare or a Medicare Advantage plan will depend on your healthcare needs, preferences, and financial situation. Original Medicare is a fee-for-service plan that allows you to go to any doctor or hospital that accepts Medicare. It only pays for 80% of services received, which may not be cost effective if you need a lot of healthcare. In this case, you may choose to supplement your Original Medicare with a Medigap plan.
Medicare Advantage on the other hand covers everything Part A and Part B covers, but charges a copayment and coinsurance for in network services. Some plans also include ancillary services like vision, hearing, and dental benefits, which may make Medicare Advantage more cost effective if you need those services and don’t need a lot of healthcare.
| Original Medicare | Medicare Advantage | |
|---|---|---|
| Cost | Monthly Part A* & B premiums; Yearly deductible; 20% coinsurance after deductible is met for Medicare-covered services with participating provider
*Part A is premium-free for most people. |
Varies; may include a monthly premium, copayments, coinsurance, and deductibles. Part A* and B premiums are paid separately.
*Part A is premium-free for most people. |
| Allowed to choose your provider | Any Medicare provider who accepts Medicare | Varies; many plans cover in-network providers only, while others charge more for out-of-network providers. |
| Referrals | Not needed | May be needed for specialty care |
| Prescription drug coverage | Not included; purchase Part D separately | Many plans include a Part D plan |
| Extra benefits | No | Some plans include vision, hearing, dental benefits, and more |
| Out-of-pocket limit | None; you are responsible for costs not covered by plan. | Yes; care is covered 100% once you reach your yearly limit. This does not apply to extra benefits. |
Learn More From Our Sources
- Medicare | How Original Medicare Works | Last accessed November 2024
- Medicare | Medicare Advantage Plans | Last accessed November 2024
- Medicare | How to Get Prescription Drug Coverage | Last accessed November 2024
- Medicare | What’s Medicare Supplement Insurance (Medigap)? | Last accessed November 2024
- Medicare | 2021 Choosing a Medigap Policy | Last accessed November 2024
- Medicare | What’s Not Covered By Part A and Part B | Last accessed November 2024
- Medicare | What Part A Covers | Last accessed November 2024
- Medicare | What Part B Covers | Last accessed November 2024
- Medicare | Costs at a Glance | Last accessed November 2024
- SSA | Medicare Benefits | Last accessed November 2024