First you will need some understanding as to how Medicare works.

There are three main parts to Medicare: Part A, B and D. Part A and B work together. They cover the hospital and doctor. Part D is for prescription drugs.

Medicare Part A covers a wide range of hospitalization and inpatient services. Most people receive Part A automatically when they turn 65, or if they are disabled for 24 months. For 2011 if you go to a hospital you will pay a $1,132.00 deductible for the first 60 days. Then after the first 60 days you will pay a $283.00 per day co-pay for days 61-90 and a $566.00 per day co-pay for days 91-150. A hospitalization and inpatient service includes inpatient care in hospitals, critical access hospitals, skilled nursing facilities, hospice care, and some home health care. Nearly all medically necessary services are covered.

Medicare Part B helps pay for doctor’s services, outpatient, and other medically necessary services that aren’t covered under Part A. There are some preventative services that are also covered. There is a premium paid to Medicare for Part B. The 2011 Part B monthly premium remains $96.40 if the beneficiary drew Social Security before 2010 and earned less than $85,000.00 a year, if single or $170,000.00 a year if married. If the beneficiary met income requirements, but did not draw social security before 2010, the premium is $115.40.  If you do not meet the income requirements, you will pay more. Medicare Part B premiums are only one of the cost. For 2011 you must pay a $162.00 annual deductible. After you have paid your annual deductible your share is generally 20% of the bill.

Medicare Part D was added in 2006 and provides prescription drug coverage to Medicare recipients. Unlike Part A and B, you do not have coverage until you enroll with a private company.

You will have two main choices as to additional coverage. A Medicare Supplement or a Medicare Advantage plan

A Med-Sup policy pays after Medicare. So your health care bills are paid by Medicare and the Med-Sup policy. There are 10 standard plans identified with letters in the alphabet (A, B, C, D, F, G, K, L, M and N). A Med-Sup plan fills in the gaps that Medicare does not cover. With a Med-Sup policy your drug coverage will always be a different policy.

Medicare Advantage plans or MA plans are also called Part C. With a MA plan the insurance companies are under contract with Medicare and are paid each month by Medicare. The reason why they are paid by Medicare is because Medicare no longer pays a portion of your medical bill, your bill is paid by the Medicare Advantage plan. Be assured you are still part of Medicare and you still get all the same rights and protection.

There are three main types of Medicare Advantage plans. An HMO, PPO or PFFS. An HMO plan is the most restrictive plan. You may only go to doctors and hospitals that are in their network unless there is an emergency. A PPO plan has what they call “In Network” doctors and hospitals. You are also allowed to go outside the network. If you go outside the network (known as “Out of Network”) you normally would have higher co-pays or deductibles than you would if you would stay in the network. A PFFS plan allows you to go to any doctor or hospital that would accept the plans terms and conditions. There is not a network with this type of plan. For the most part PFFS plans have been eliminated in 2011.

Normally with a Medicare Advantage plan you will have lower premiums but higher co-pays and deductible than a Med-Sup.

Then you have your Medicare Part D coverage called “PDP”. PDP can either come as a stand alone plan or part of a Medicare Advantage plan called “MA-PD”. The cost associated with a PDP plan can be a monthly premium, deductible and co-pays. Most plans have what is called tiers. The cost of the drug would determine what tier the drug is in. The higher the tier the higher the co-pay would be. PDP plans have a coverage gap (called the "donut hole"). This means for 2011 once you and the insurance company have spent $2,840.00, your insurance coverage will stop. You will have to pay the full cost of your prescription drugs, until the total cost of your drugs reach $4,550.00. Starting in 2011 you will get up to a 50% discount on covered brand-name prescription during the donut hole. Once through the donut hole, the out of pocket cost are drastically reduced. PDP plans can vary drastically from one company to the next in what drugs are covered and what you will pay in co-pays for your drugs.

A good web site for helping you is www.UnderstandingMyMedicare.com. Not only is there good useful information. But they can also assist you in finding the right plan.



Doug Reed is the author of this article on Understanding My Medicare. Find more information, about Medicare supplement Insurance here