What Is Original Medicare?
Original Medicare simply refers to Medicare Parts A and B. It can be tough to discern what all of the lingo and Medicare jargon means, but rest assured – most of these terms are easy to understand.
Medicare is a government-run program that helps provide health insurance coverage for:
- Seniors ages 65+,
- People of all ages with End-Stage Renal Disease, and
- People under age 65 with certain disabilities.
The Centers for Medicare & Medicaid Services (CMS) is a federal agency that runs Medicare. CMS is also part of the U.S. Department of Health and Human Services.
Original Medicare Definition
So, when we say the word “Medicare,” we’re referring to the program as a whole.
But when we say “Original Medicare,” we’re only referring to Medicare Parts A and B. Together, Medicare Parts A and B provide your hospital and medical insurance. Medicare Part A is generally free to have for most individuals since they’ve paid for it through their payroll taxes while working. However, most people pay a monthly premium for Part B.
In sum, Original Medicare refers to Parts A and B, which work together to provide you with a somewhat comprehensive insurance plan.
You might also hear terms like Traditional Medicare or Fee-for-Service Medicare. These terms mean the same thing as Original Medicare.
Keep in mind that Medicare isn’t 100% coverage – you are still responsible for a portion of the medical bills. On average, Medicare covers around 80% of your Medicare-approved expenses, and you are responsible for the other 20%.
What is Medicare Part A?
Medicare Part A specifically covers your hospital costs. For example, if you are admitted to the hospital and are inpatient, Medicare Part A would help pay for those costs.
Other examples of expenses that Medicare Part A would help cover include:
- Skilled nursing facility care (although you’re only covered for a short time)
- Nursing home care (very short-term coverage)
- Hospice (again, limited)
- Home health services (you guessed it – limited and short-term coverage only)
If you don’t have a Medicare Supplement, Medicare Part A has a $1,364 deductible. This means you would have to pay that deductible before you receive any coverage from Part A.
However, the nice part about having Medicare Part A is that there is no monthly premium. As long as you’ve worked and paid Medicare taxes for at least 10 years (40 quarters total), your Part A premium will be $0.
So, even if you’re still working past the age of 65, you’ll be automatically enrolled in Medicare Part A at no cost to you.
What is Medicare Part B?
Medicare Part B helps cover your medical costs, like lab tests and surgeries. Other examples of expenses that Medicare Part B helps cover include:
- Doctor visits
- Clinical research
- Ambulance services
- Durable medical equipment
- Mental health
- Getting a second opinion before surgery
- Limited outpatient prescription drugs
- Wheelchairs and walkers
[RELATED: What Does Medicare Part B Cover?]
With Part B, you do have a monthly premium. It can change each year, but as of 2019, it is $135.50 per month for individuals who make $85,000 or less or couples who makes $170,000 or less.
Medicare Part B also has a deductible, although it’s much less than Medicare Part A. The deductible is $185.
In general, you should enroll in Medicare Part B when you turn 65. However, more and more people choose to continue working past the age of 65, which means you won’t need Part B until you lose your employer’s health insurance.
[RELATED: Working Past 65?]
How Can I Get Better Health Coverage Than Original Medicare?
While Original Medicare does offer coverage that usually pays for around 80% of your medical bills, that remaining 20% or so can still be very pricey.
There are Medicare Supplements for that. Medicare Supplements, also called Medigap plans, cover expenses left over by Medicare.
Medicare Supplements offer coverage to pay for things like:
- Medicare Part A coinsurance
- Medicare Part B coinsurance or copayment
- First 3 pints of blood
- Part A hospice care coinsurance or copayment
- Skilled nursing facility care coinsurance
- Medicare Part A deductible
- Medicare Part B deductible
- Medicare Part B excess charges
- Foreign travel exchange
There are 10 different Medicare Supplement plans, and they’re organized by letters A through N. Each plan is slightly different, with some offering much better coverage than others.
By law, every Medicare Supplement plan is standardized. That means that no matter which company offers the plan, the benefits will be the same.
At Medicare Allies, we represent over 25 different Medicare Supplement insurance carriers, which allows us to price shop for you. Since every plan is standardized, the company you choose doesn’t change your coverage.
Let’s compare prices and find the most affordable option for you.
Another Option Is the Medicare Medical Savings Account (MSA)
If you're not convinced a Medicare Supplement is right for you, there is another very compelling option. A Medicare Medical Savings Account, or MSA, combines high-deductible health coverage with a funded savings account that you can use for qualified medical expenses.
This hasn't been talked about much before because there weren't many insurance companies offering it, and it wasn't widely available. However, today, it's available in nearly half the country, and even our agents here at Medicare Allies are saying they'll choose the MSA when they turn 65. That's really saying something!
The Medicare MSA includes:
- $0 premium
- Annual deposit into your medical savings account
- No networks – see any doctor that accepts Medicare
- High-deductible health coverage
If you'd like to learn more about the MSA as a Medicare option for you, visit this page: What Is An MSA? There, you can also request more information about MSAs in your area.
- Getting Started With MyMedicare.gov: Medicare's Free Online Portal
- When Does Medicare Start?
- 6 Reasons to Work With a Medicare Allies Insurance Agent Instead of Buying Direct from the Carrier
Our team of dedicated, licensed agents can help you as little or as much as you need. Whether it’s answering a few questions about Medicare or creating a comprehensive Medicare Planner with you, we are your Medicare Allies.