Ohio Department of Aging
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October 2007
Original Medicare or a Medicare Private Health Plan?
Each year, beginning in November, everyone with Medicare has the option to change their Medicare coverage, either to Original Medicare or to one of the private health plans known as Medicare Advantage. According to the Medicare Rights Center, consumers have a lot to consider when choosing how to get their Medicare health coverage and most will be locked into the plan they choose through the end of 2008.
The vast majority of people who have Medicare stick with Original Medicare, the traditional fee-for-service program run by the federal government, that offers access to virtually any doctor, specialist and hospital in the country.
Many insurance companies advertise Medicare private health plans that have low premiums or offer special benefits. These plans must cover at least the same inpatient (Part A) and outpatient (Part B) services covered by Original Medicare. Private health plans may also offer additional benefits, such as dental or vision care, that Original Medicare does not cover. Many offer Medicare prescription drug coverage (Part D) as part of their benefits packages as well.
If a consumer signs up for a Medicare private health plan, he or she must follow the private health plan's rules and will most likely incur high out-of-pocket costs if he does not. Some of the most commonly offered types of Medicare private health plans are health maintenance organizations (HMOs), preferred provider organizations (PPOs) and private fee-for-service (PFFS) plans.
Before consumers sign up for a Medicare private health plan, they need to make sure they can use the doctors, specialists and hospitals that they prefer. Private health plans restrict consumers to certain providers, usually from their provider network. Often, a consumer needs a referral from his primary care doctor before he can see a specialist. Doctors may also have to follow certain rules, like seeking the private health plan's approval before prescribing a treatment or admitting someone to the hospital. These limitations might make it difficult for consumers to get urgent care, or needed care when traveling outside the private health plan's network.
Consumers need to ensure they can afford a private health plan before they join it. That means knowing all the private health plan's costs, since some plans charge higher copays for certain types of care, like cancer care. Consumers must also understand the plan's rules in advance, because if a plan's rules are not followed, the consumer may have to pay up to the full cost of the service. Keep in mind that private health plans can change their rules, provider networks and costs every year.
If consumers choose Original Medicare, it is best to also have supplemental coverage, which helps cover health care costs that Medicare does not cover. If a consumer does not have a retiree health plan to supplement Original Medicare, she can buy a supplemental plan known as a Medigap plan. She can also buy a standalone Medicare private drug plan (PDP) that works with Original Medicare to give her Medicare prescription drug coverage (Part D). Low-income people with Medicare may be eligible for Medicare Savings Programs that help with the out-of-pocket costs of Original Medicare.
Ohio Department of Aging