| Approach | Parts | What it means |
|---|---|---|
| Original Medicare |
Part A (hospital insurance) Part B (medical insurance) |
Provided by Medicare Fee-for-service Individuals cover deductibles, co-pays, andco-insurance for medically approved products and services (no out-of-pocketlimit) Most people don't pay for Part A premiums but will need to pay for Part B premiums every month Higher-income households will pay an additional amount. Additional amount based on income from sources including gains from security sales, taxable and tax-exempt interest and dividend payments, retirement plan distributions, and more |
| Medigap | Added to Part A and B |
Private insurance Standardized coverage options Premiums differ by plan and provider Coverage works in any state Helps pay for out-of-pocket costs (deductibles, co-pays, co-insurance) covered under Parts A and B High-deductible plans have an out-of-pocket limit
|
|
Medicare Advantage |
Part C (covers Part A and B plus possible otherbenefits) |
Private insurance Managed care Selected physicians, hospitals, and pharmacies based on the plan's network and service areas within the state Premiums may be lower than Medigap insurance You pay copays, deductibles, and coinsurance up to a maximum out-of-pocket limit set by the insurer Usually includes prescription drug coverage so stand-alone Part D generally not needed May offer additional services like vision, dental, hearing, and wellness services Medigap NOT needed
|
|
Prescription Drugs |
Part D (prescription drug coverage) |
Private insurance Covers prescription drug coverage Individuals will need to pay deductibles, co-pays, and co-insurance up to a maximum out-of-pocket amount for covered prescription drugs Covered drugs often change year to year for each insurance company
|
Disclosure Title
Source
Disclosure
Schwab Center for Financial Research.