Healthcare Educators


How Medicare, Medicare Supplement Plans and Medicaid Differ

by | May 4, 2018

Navigating health insurance is challenging, and this doesn’t change when you turn 65 and age into Medicare. Although Medicare will likely be your main source of health insurance from this point on, you still have many options.

To help you make the best choice for your situation, here’s a look at how Medicare, Medicare Supplement Plans and Medicaid differ.

Medicare: Your Main Source for Health Insurance

When you turn 65, you age into Medicare. You may also qualify for Medicare before you turn 65 if you have been receiving Social Security Disability Insurance for two years.

It’s important to enroll in Medicare as soon as you turn 65, unless you qualify for an exemption. If you don’t, you may face financial penalties when you finally do enroll.

Medicare is divided into separate parts that provide different coverage types.

  • Original Medicare refers to Medicare Part A and Medicare Part B. Medicare Part A is your hospital insurance. Medicare Part B is your medical insurance.
  • Medicare Advantage is also called Medicare Part C. It is a policy from a private insurer that combines Medicare Part A and Medicare Part B. Most Medicare Advantage plans also include prescription drug coverage, and some also provide coverage for dental, vision and other services not covered under Original Medicare.
  • Medicare Part D is your prescription drug coverage.

For your main insurance needs, you will need to pick either Original Medicare or Medicare Advantage. If you pick Original Medicare, or if you pick a Medicare Advantage plan that does not include prescription drug coverage, you will also need to enroll in a Medicare Part D plan.

And sorry to be the bearer of bad news if you didn’t already know this, but health care is not free under Medicare.

If you or your spouse paid Medicare payroll taxes for at least 40 quarters, you will not pay a premium for Medicare Part A, but you will be responsible for a deductible and coinsurance. Your premium cost for Medicare Part B depends on your income. In 2018, the standard monthly premium is $134. In addition to the premium, you are responsible for a deductible and coinsurance.

Costs for Medicare Advantage and Medicare Part D vary by plan.

Medicare Supplement Plans: Optional Additions

Some people use Medicare Supplement Plans, also called Medigap policies, to manage the out-of-pocket costs in Original Medicare.

Medicare Supplement Plans are designed for people enrolled in Original Medicare. If you choose a Medicare Advantage policy, you cannot also enroll in a Medicare Supplement Plan.

Medicare Supplement Plans are sold by private insurers, and they help pay for the deductibles, coinsurance and copayments that Original Medicare beneficiaries have to pay.

Medicaid: Help for Low-Income Beneficiaries

Medicaid is a health insurance program for low-income individuals. If you are eligible for Medicare and Medicaid, Medicaid will help cover the out-of-pocket costs that Medicare does not cover. To see whether you qualify for Medicaid, you need to contact your state’s Medicaid program.

Need help navigating your options? PTT Financial agents are ready to serve! Contact us to learn more.