Medicare 101

When it’s time to choose Medicare coverage, you have two main options: Original Medicare or Medicare health plans. Understanding the differences between them can help you make the best choice for your health care needs.

Original Medicare

Original Medicare is run by the government. It has two parts:

  • Medicare Part A is hospital insurance. It covers things like in-patient stays, skilled nursing facility care, home health care and hospice care. Part A has deductibles and coinsurance, but most people don’t have to pay premiums for Part A if they worked at least ten years in the US or are married to someone who has.
  • Medicare Part B covers almost all necessary outpatient medical services, including doctors’ visits, lab work and x-rays, durable medical equipment (wheelchairs, hospital beds, etc.), ambulance services, outpatient hospital care, etc. Part B has premiums, deductibles and coinsurance that you have to pay yourself or through other insurance coverage.

With Original Medicare, you can go to any doctor or hospital in the U.S. that accepts Medicare. There are no networks, and you pay the same amount for covered services from any Medicare provider. There is no prescription drug coverage under Original Medicare, but you can enroll in a Medicare Part D plan. Vision, dental and hearing care are not covered under Original Medicare. So you may need to buy separate plans to cover these extras.

Medicare health plans

In Minnesota, there are two types of Medicare health plans: 

  • Medicare Advantage Plans are Medicare plans offered by private companies that contract with Medicare to cover parts A and B. Medicare Advantage Plans are private health plans that usually require their members to go to providers from their network. Medicare Advantage Plans also have extra benefits, like prescription drug, dental and vision benefits.
  • Medicare Cost Plans are also offered by private companies, but they allow you to use doctors and hospitals both in and out of the network. If you get care outside the network, Original Medicare covers the services. Both plans give you more options than Original Medicare alone.
    • Currently, Cost Plans are only available in 21 of Minnesota's counties

    Aitkin Lake Rice
    Carlton Le Sueur Rock
    Cook McLeod Sibley
    Goodhue Meeker St. Louis
    Itasca Mille Lacs Stevens
    Kanabec Pine Traverse
    Koochiching Pipestone Yellow Medicine

Which option is better for you?

Choosing between Original Medicare and Medicare health plans depends on what you need. If you want more flexibility to see any doctor, Original Medicare might be the better option. But if you want extra benefits like prescription drugs or dental care in one plan, a Medicare health plan could be a better fit.

When making your decision, consider:

  • Cost - what can you afford?
  • Convenience - can you be flexible?
  • Coverage - how much health care do you need?
  • Locations - what plans are available where you live?

More Medicare options

Medicare Part D

Medicare Part D is the optional prescription drug coverage offered by private insurance companies and available to all people with Medicare. There are many Part D plans to choose from and all have monthly premiums.

Each year, Part D plans can change premium amounts or the drugs they cover, so it’s important to compare plans each year during Medicare Open Enrollment (October 15 to December 7).

Medigap policies

Medigap policies (Medicare Supplements) are private insurance policies that some people choose to buy to cover some costs not covered by Original Medicare. These are typically out-of-pocket costs, like deductibles, copays, coinsurance and health care costs not covered by Original Medicare while traveling outside the U.S. Medigap does NOT cover prescription drugs. If you need drug coverage, you must buy a separate Part D plan. Medigap policies in Minnesota are similar to national plans, but are standardized in a different way. 

You can only buy a Medigap policy if you have Original Medicare.

Minnesota has seven specific types of Medigap policies. They differ in cost, coverage and how much you might have to pay out-of-pocket.

  • Main Policies: Basic Medigap (with or and Extended Basic Medigap
  • Other Policies: Plans focused on Part B copays ($20/$50), high deductible and plans covering 50% or 75% of costs (like national Plans K, L and M).

Please refer to the table of policies for specific policy information.

Next steps - Enrolling in Medicare.