Apart from the services offered by Medicare Parts A and B, there are Medicare health plans that are available through private companies that you can purchase. These Medicare health plans all have contracts with Medicare, and Medicare regulates the services offered by these private companies to ensure that you are afforded certain minimum coverage amounts.
Although Parts A and B of the Medicare program is already fairly comprehensive, people sometimes have some out of pocket expenses for medical bills that are not included in the coverage. It is for this reason that the government has allowed private companies to offer health plans to those who otherwise qualify for Medicare, but may want some additional coverage. The two options available through these private companies to complement your existing Medicare plan are Medicare Advantage Plans and Medicare Supplemental Insurance Plans.
Medicare Advantage Plans
A Medicare Advantage Plan is offered by Preferred Provider Organizations (PPO) or a Health Maintenance Organization (HMO) as a substitute to Medicare Part A and Part B. It offers the same hospital insurance covered by Part A and medical insurance covered by Part B of your original Medicare except for coverage of hospice care.
However, you can opt to have some other services or expenses included in your coverage depending on what your medical needs are. You can pay additional premiums for additional coverage for hearing, vision, or dental health benefits.
Medicare pays these private companies the monthly premiums for your Medicare Advantage Plans and they are required to follow any rules set by Medicare. Although this may be the case, the private companies can dictate how you will be able to get the medical services and limit you to having consultations with their preferred physicians. Medicare Advantage Plans are most popular in Florida, with Florida Blue Medicare being the largest provider.
Medicare Supplemental Insurance
Medicare Supplemental Insurance was designed to complement your original Medicare benefits and provide coverage for medical expenses that Medicare does not cover. Like the Medicare Advantage Plans, these are provided by private companies and to ensure the uniformity of health benefits among all health insurance providers, Medicare has made the coverage of all the types of supplemental insurance offered by private companies uniform. The premiums that private companies may charge for each type of supplemental insurance may vary, but the benefits are the same wherever you may choose to purchase it.
If you have a Medicare Supplemental Insurance plan, you are still eligible to be covered under all the benefits of your original Medicare. Since this supplements your original Medicare, you pay additional premiums to the private company in order to have coverage for the coverage that you have added to your original Medicare.
The way that each program is designed and what each plan covers is where the difference lies. Enrolling in a Medicare Advantage Plan means moving out and getting the services of a private company for the same services being offered by Medicare. Medicare Supplemental Insurance, on the other hand, maintains your original Medicare benefits while providing you additional coverage for medical expenses not covered by your original Medicare. Medicare Advantage replaces Medicare, while Medicare Supplemental Insurance, as the name suggests, provides options to supplement the coverage you already have with Medicare.