Types of Medicare Classes

Medicare was created in 1965 to provide health insurance for people 65 and older. It is now the largest health insurance program in the United States, covering more than 55 million people.

Medicare provides several different types of coverage, including hospitalization (Part A), professional services (Part B), and prescription drug coverage (Part D). There are also private Medicare plans (Part C) available that may offer additional coverage, such as dental, vision, and long-term care.

Original Medicare (Parts A and B) require enrollees to pay deductibles, coinsurance, and copayments. In addition, Original Medicare does not cover routine dental or vision care, or long-term care.

The Medicare system in the United States is made up of four different parts, each with its own distinct coverage and benefits. Here's a brief overview of each:

Medicare Part A (Hospital Insurance)

Medicare Part A covers inpatient hospitalization, skilled nursing facility care (for a limited timeframe), hospice care, and home health care. Part A also covers some preventive services.

Part A is funded through payroll taxes (2.9%) and premiums (most people don't pay a premium for Part A because they or a spouse have worked enough years to qualify for premium-free Part A).

If you're in the hospital or a skilled nursing facility, Part A helps pay for your room and board, nursing care, and other services and supplies.

Part A requires that the patient meet a deductible, and then pay a coinsurance once the deductible is met. It's important to note that Part A only covers medically necessary care. This means that if you go to the hospital for something that could have been treated at home or somewhere else, Part A may not cover the entire cost.

Medicare Part B (Medical Insurance)

Medicare Part B is a federally funded health insurance program that helps cover the costs of medically necessary professional services and supplies. Part B is optional, but most people who have Medicare choose to enroll in it because it can help cover the costs of doctor visits, outpatient care, and preventive services.

Part B also helps protect against high out-of-pocket costs by covering some of the expenses that Medicare Part A doesn't cover. For example, Part B may cover the cost of durable medical equipment or home health services.

Part B requires that the enrollee pay a monthly premium, annual deductible and copayments or coinsurance for covered services.

Medicare Supplements or Medigap

Medicare Supplements, also called Medigap, are insurance policies that help cover some of the costs that Medicare doesn't. They can help pay for deductibles, coinsurance, and copayments. Some Medigap policies also cover medical expenses incurred when traveling abroad.

Medigap policies are sold by private insurance companies and are standardized by the federal government. This means that all Medigap policies must offer the same basic benefits, no matter which company sells them. However, insurers can charge different premiums for their policies.

Medicare Part D (Prescription Drug Coverage)

Medicare Part D is a federal program that helps seniors and other eligible individuals pay for prescription drugs. The program is administered by the Centers for Medicare & Medicaid Services (CMS).

Part D works by reimbursing participating pharmacies for the cost of covered drugs. Beneficiaries pay a monthly premium, and may also be responsible for a yearly deductible and/or copayments.

The amount of coverage provided by Part D depends on the individual's drug costs, as well as the plan they choose. Some plans cover most drugs while others have more limited coverage.

Part D also offers some protection against rising drug prices. If the cost of a covered drug increases, the plan will pay a larger portion of the cost, up to a maximum out-of-pocket limit.

Approximately 70% of Medicare beneficiaries qualify for extra help, which pays for all or part of the monthly premium, yearly deductible, and copayments.

To qualify for extra help, beneficiaries must meet certain income and asset limits. For 2021, the income limit is $19,140 for an individual and $25,860 for a married couple. The asset limit is $13,600 for an individual and $27,200 for a married couple.

Part D plans are offered by private insurance companies that contract with CMS. There are two types of Part D plans: stand-alone prescription drug plans (PDPs) and Medicare Advantage plans with prescription drug coverage (MA-PDs).

Medicare Part C (Medicare Advantage Plans)

Medicare Advantage plans, also known as Medicare Part C, are an alternative to traditional Medicare. These plans are offered by private insurance companies and provide all the same benefits as Medicare Part A and Part B, plus they may offer additional benefits such as more affordable prescription drug coverage and routine dental and vision care.

Medicare Advantage plans may have lower premiums than traditional Medicare. It's important for prospective enrollees to compare the costs and benefits of each plan offered in their region before enrolling.

Here are some things patients should know about Medicare Advantage plans:

1. Medicare Part A and Part B eligibility is required to enroll in a Medicare Advantage plan.

2. Most Medicare Advantage plans include prescription drug coverage.

3. You can only have one Medicare Advantage plan at a time.

4. Medicare Advantage plans have different rules about how you get your care. For example, some plans require you to see doctors who are in the plan's network.

Medicare Advantage has continued to take on a more significant role in the Medicare program over the past decade. The number of Medicare beneficiaries enrolled in a Medicare Advantage plan reached 26 million in 2021.

In 2022, Medicare beneficiaries had more options available than ever before. On average patients have access to an average of 39 different Medicare Advantage plans in each local market. Double the amount of plan choices per patient than just five years ago.

Dual Eligible Special Needs Plans (D-SNPs)

Dual eligible special needs plans known as D-SNPs are a type of Medicare Advantage plan that is designed specifically for people who are dually eligible for both Medicare and Medicaid. D-SNPs have become increasingly popular among both Medicare Advantage organizations and dual eligible beneficiaries since the benefits can be tailored to the needs of this population.

The D-SNP market continues to grow rapidly with the number of D-SNPs increasing by more than 16% in 2022.

D-SNPs offer all the benefits of MA plans, and typically additional benefits such as dental, vision, and broader prescription drug coverage. D-SNPs can be an excellent option for people who want or need the extra coverage that they provide.

Medicare Advantage (Part C) on the Rise

In the next couple of years, Medicare Advantage is poised to cover the majority of Medicare beneficiaries. When compared to traditional Medigap plans, Medicare Advantage typically offers the enrollee a more affordable way to expand Part A and Part B coverage. For cost conscious consumers Medicare Advantage’s expanded benefits, that may include lower premiums, dental and or vision care and even gym memberships help fuel the growth of these plans. CMS reimbursement rules encourage private insurers to participate in this market and many of the plans find they can be highly profitable offering Medicare Advantage plans, even with the additional benefits they provide to beneficiaries.

As Medicare Advantage expands, so does the clinical challenge of documenting the disease burden of each and every enrollee. Those tasks typically fall into the hands of the primary care medical group. Reimbursement is tied to meticulous documentation and coding of disease for beneficiaries. Those medical groups are incentivized to perform these functions as accurately and quickly as possible. Medicare risk adjustment software that detects disease and assists in complying with coding rules is a “must have” for medical groups that provide care to Medicare Advantage members.

ForeSee Medical offers a unique AI-powered, NLP-based solution that improves quality and assists coders and providers in documenting a complete profile of all of the disease and codes that are associated with each patient.