Unpacking Original Medicare: What Parts A and B cover – and when to consider a Medicare Supplement plan

When Medicare was originally signed into law in 1965 by President Lyndon B. Johnson, it had two complementary parts, A and B.  These parts are known as Original Medicare. Part A covered procedures associated with hospital care, and Part B covered outpatient care.  However, it didn’t take long for people to begin looking for ways to supplement the coverage.

Why?

Parts A and Part B provide widely accepted inpatient and outpatient coverage. However, people also wanted help paying for some of the costs associated with their new Medicare coverage.  For example, the portion of doctor fees they were still responsible for paying under the new program. 

The government, recognizing the popularity of the plans, moved to formalize and regulate these forms of private supplemental coverage. Today, Medicare Supplement plans are a popular choice for people looking for help with some of the out-of-pocket costs associated with Original Medicare. And they’re also popular with those who’d like some extra benefits. 

What is Original Medicare?

Many people choose to add a Medicare Supplement plan to their Original Medicare coverage. To understand why, let’s take a look at Original Medicare. Medicare Part A covers medical services that are often associated with a stay in the hospital. It also covers some types of care that often occur following a hospital stay.  This can include things like:  

• Inpatient care in a hospital
• Inpatient care in a skilled nursing facility
• Hospice care
• Home health care

Medicare Part B covers the type of care that often takes place outside a hospital or on an outpatient basis. This includes things like:

• Medically necessary doctor services
• Preventive care services, like health screenings, flu vaccines and annual wellness visits to your doctor
• Durable medical equipment, like wheelchairs or portable oxygen tanks you may need to buy to support your health

The cost of Original Medicare

When it became law, Original Medicare provided an unprecedented level of care for Americans 65 and older. But there are costs associated with the coverage. For example, with Part A, you are responsible for paying a $1,340 deductible before your benefits kick in. After that, if you have a problem that requires hospitalization for up to 60 days, Part A covers your needs. If your stay is more than 60 days, you’ll have to cover part of the price of your stay. And hospital costs can add up quickly, even with Part A chipping in.

Some extra help with costs

To protect people from the costs, the government worked with private insurers to come up with a set of plans that are designed to help with some of the costs associated with Original Medicare. By paying a monthly premium for a Medicare Supplement plan, you can get financial help with:

• Paying for your Part A deductible and the share of inpatient care costs not covered by Part A
• Paying for your doctor bills for Part B services
• Paying the costs of hospice care not handled by Original Medicare

These benefits mean that if you have a Medicare Supplement plan, you can: 

• Pay a predictable up-front premium for your coverage
  
• Reduce the amount that you have to pay if you have a long inpatient hospital stay or repeat visits to a specialist.
  

There are several Medicare Supplement plans offered by private insurance companies, each offering slightly different coverage with slightly different costs.  Each Medicare Supplement plan is identified by a letter of the alphabet. For example, Medicare Supplement plan G offers emergency medical coverage abroad, while Medicare Supplement plan K has a lower cost than plan G, but does not include coverage abroad. Make sure not to confuse these plans for the different parts of Medicare, which are also identified by letters.  By law, Medicare Supplement plans are regulated by Medicare. They vary only in cost and coverage.

Medicare Supplement plans even have a few welcome additions. For example, some plans will cover your health care while traveling abroad. If you have the appropriate Medicare Supplement plan and need to see a doctor in Rome, Paris or even Ouagadougou, your plan may help pay the costs.

Looking for help with more than costs?

Medicare Advantage plans often include additional coverage, like dental, vision and hearing. There are some important similarities and differences between Medicare Supplement plans and Medicare Advantage plans.

While both are provided by private insurance companies, there are some key differences between Medicare Supplement plans and Medicare Advantage plans: 

• Medicare Advantage plans often provide prescription drug coverage. Medicare Supplement plans don’t.
  
• Medicare Supplement plans work together with Parts A and B. Medicare Advantage plans include all the benefits of Part A and B but you work with a private company, not the federal government.
  

That means you can’t be covered by a Medicare Advantage plan and a Medicare Supplement plan at the same time. So, if you choose a Medicare Advantage plan, you won't be able to purchase an additional Medicare Supplement plan. But you’ll  also usually get benefits  with a Medicare Advantage plan that aren’t  included in either Original Medicare or Medicare Supplement coverage.  

Making the choice

Of course, deciding which Medicare coverage is right for you depends on many factors. Medicare Supplement plans offer a unique combination of benefits. But  only you can decide if they’re  the best fit for your lifestyle.