Promises, Promises
Better check the fine print on that newfangled Medicare plan
Medicare's Many Faces
Medicare, the federal health insurance program for people 65 or older, was established in 1965. Under the original Medicare plan, seniors can visit any doctor or hospital that participates in the program. Medicare Part A covers hospital services; Medicare Part B, doctor and outpatient services. Seniors typically pay a set premium, annual deductibles for Parts A and B, and coinsurance of 20 percent for doctor visits. Original Medicare doesn't cover most prescription drugs. In recent years, private companies have contracted with Medicare to offer an increasing number of health plan options to Medicare beneficiaries. Their coverage varies:
HMO plans. Seniors generally must use doctors and hospitals in the network. Referrals are required for specialists.
Preferred-provider organization plans. Participants can go out of network, but they'll pay more.
Private fee-for-service plans. Beneficiaries may see any provider who agrees to accept the plan's payment terms. Premiums, copayments, and coinsurance vary.
Prescription drug plans. Stand-alone plans offering prescription drug benefits-called Medicare Part D-debuted in 2006.
Medigap plans. This supplemental insurance fills gaps in original Medicare plan coverage.
Special needs plans. Special plans for people who are institutionalized, who receive both Medicare and Medicaid, or who have certain chronic medical conditions.
Medical savings account plans. These new high-deductible plans are combined with a private savings account into which Medicare makes an annual deposit.
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