Article provided by: IPA
At first glance, Medicare may feel like an overwhelming and confusing subject. But with a little explanation, it can be fairly straightforward to understand how Medicare works and then be able to navigate the Medicare system to make it work best for you and your personal situation. In this article, we will give an in-depth explanation of Medicare, how it works, the options available to you, and the best ways to supplement your Medicare coverage. Medicare can be an extremely useful resource and with the right knowledge and understanding, you can maximize its benefits in your life. We will start with the basics and then show you ways to expand and enhance your coverage. Knowing all the appropriate information will allow you to make the best decisions in using Medicare to meet your healthcare
needs.
What Is Medicare?
First, at its heart, Medicare is a type of health insurance. It is a government program provided by the United States federal government 
that gives health care coverage (health insurance) for all people over age 65, or for those under 65 that receive Social Security Disability Insurance (SSDI) or those that have end-stage renal disease (ERSD).
Traditionally, all of these groups would have a hard time finding adequate health insurance coverage at a reasonable price in the private insurance sector. Their age, their disabilities, or their illnesses, make them more difficult to insure. To solve this problem and make health insurance available to these groups, the federal government set up the Medicare program.
It is funded in part by Social Security and Medicare taxes which you pay on your income throughout your career, in part by premiums paid by those using Medicare, and in part by the federal budget. Medicare originated in 1965 as a part of the Social Security Act. It was designed as a social safety net to protect citizens over the age of 65 or those younger than that with specific health conditions, like end-stage renal disease or for organ transplants. It was created so that these groups could still find affordable health care coverage and not be financially burdened by enormous or overwhelming healthcare costs. Since 1965, Medicare has gone through many changes and amendments giving us the program we have today.
What Is Medicare Today?
Today, there are plenty of options for patients to choose from when designing and setting up their Medicare plan.
There are two main varieties of Medicare coverage:
Original Medicare, which is a traditional fee-for-service program offered directly through the federal government, or Medicare Advantage Plan, which is a type of private insurance offered by companies that contract with the federal government to provide healthcare coverage. Once you meet the eligibility requirements for receiving Medicare, you can choose which way you would like to receive your Medicare benefits. As you make this decision, it is important to understand your options completely, and then choose your coverage
carefully.
How you choose to receive your benefits—either through Original Medicare or through an Advantage plan—will affect your out-of-pocket costs and will determine where you can go to receive care. For example, with Original Medicare, you are covered to go to nearly all doctors and hospitals in the country. Medicare Advantage Plans, on the other hand, generally have network restrictions, meaning that you will be limited in the doctors and hospitals you can use, as determined by your individual insurance plan. Let’s talk about each option in more detail. Before we begin, it’s important to understand that Medicare coverage is divided into parts A-D. Each part covers a different area of your healthcare costs.
Original Medicare includes:
• Part A (Inpatient/hospital coverage)
• Part B (Outpatient/medical coverage)
If you choose Original Medicare and want to have Medicare prescription drug coverage (Part D), which covers outpatient prescriptions, you will need to actively choose and join a stand-alone Medicare private drug plan (PDP). We will talk more about this later. Medicare Advantage Plans are required to include all Part A and Part B healthcare services, but they do so with different rules, premium costs, and restrictions that affect where and how you receive your care. These plans can also include other coverages.
Medical Advantage Plans include:
• Part A (Inpatient/hospital coverage), with restrictions
• Part B (Outpatient/medical coverage), with restrictions
They also usually include:
• Part D (outpatient prescription drug coverage)
• Medicare Advantage Plans sometimes also offer additional benefits like dental care or routine vision
care.
Note that if you enroll in a Medicare Advantage Plan, you are still receiving Medicare, it just has more restrictions on where you can go for care and your plan will be facilitated by an insurance company rather than the federal government. Also, if you have health coverage from a union or employer when you become eligible for Medicare, they will often automatically enroll you in their sponsored Advantage Plan. Be aware that you always have the option to stay with this plan or switch to Original Medicare, or even enroll in a different Advantage Plan. Additionally, it’s important to note that Medicare Advantage Plans vary from state to state and from insurer to insurer. We will cover this in more detail later, but it’s good to understand that there can be quite a few differences in Advantage plans depending on where you live.