Medicare is a health benefit program for U.S. citizens and permanent residents who:
  • Are age 65 or older;
  • Meet certain work history requirements;
  • Or are under age 65 with certain disabilities or have end-stage renal disease.​​
Original Medicare came into being in 1965 and consists of Part A - hospital facilities, hospice and home health services; and Part B - professional services such as doctors, and durable medical equipment. Later Medicare expansions brought insurance company health plans called Part C - Medicare Advantage; and Part D - prescription drug coverage.

Original Medicare

Original Medicare, Part A and Part B, offers great freedom to choose your providers where ever you are in the country. There are no networks so any doctor accepting Medicare may be selected, simplifying travel and second medical opinions. 

​Original Medicare has deductibles and "cost sharing" responsibilities (co-pays and coinsurance).  Cost sharing can run about 20 percent and therefore may be both expensive and surprising.  For this reason many people supplement Original Medicare coverage with a Medigap health insurance policy.  A Medigap policy works in tandem with Original Medicare and can pay both deductibles and cost sharing. There is a choice of 10 standardized plan designs that can fit your life style and budget. These standardized plan designs are sold by insurance companies and are uniform in coverage.  They are identified by letters A - N.
Detailed information is available in the Medicare publication: Choosing A Medigap Policy​

Medicare Advantage

Part C - Medicare health plans are called Medicare Advantage plans and are most commonly recognized as HMO or PPO plans. Medicare Advantage plans are sold by insurance companies who have contracted with Medicare to cover all Part A and Part B benefits. They have cost sharing that is equivalent to Original Medicare, but may be different for specific services. They also may have additional attractive benefits and must have an annual maximum out-of-pocket limit.  Frequently Medicare Advantage plans have a prescription drug coverage benefit  incorporated into the plan, then  referred to as an MAPD plan.  Medicare Advantage plans can not be used with a Medigap (Medicare Supplement) plan.   Detailed information is available in the Medicare publication​: Medicare and You

Prescription Drugs

Insurance companies present Part D, prescription drug coverage as either a stand-alone complement plan to Original Medicare or as an integral part of their Part C - Medicare health plans. In both instances a member must have enrolled in Part B through Social Security.  When the prescription drug plan is complementing Original Medicare it is referred to as a PDP.  Drug coverage is frequently integrated into a Part C Medicare Advantage Plan and is then referred to as a MAPD plan.
Prescription drug plans always schedule their drugs into a formulary, and the formulary is organized into five tiers.  Tier one drugs are usually the most common generic medications and therefore the least expensive.  At the other end of the scale are the tier five drugs which are usually the most expensive specialty drugs.  
Drug plans maintain an organized network of pharmacies and the networks usually have preferred pharmacies and standard pharmacies.  Generally, drug costs are less at the preferred, compared to the standard pharmacies, and network pharmacies are less expensive that non-network.
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