For beneficiaries, Medicare used to be a relatively simple, fee-for-service program. When you turned 65, you applied for and received a red, white and blue health card. You were entitled to Part A, Medicare Hospital Insurance and, if you elected to pay a monthly premium, Part B, Medicare Medical Insurance.
When you needed health care, you went to a doctor of your choice who accepted Medicare. You paid the full cost of these visits until you reached an annual deductible. After the deductible was met, you were responsible for making a co-payment. Medicare picked up the rest, subject to rate limits.
Then along came Medicare Part C, Medicare Advantage (formerly called Medicare+Choice), which added a layer of complexity. Now, when you become eligible for Medicare, you have the option of using the original fee-for-service program or new Medicare Advantage plans. These plans offer prepaid managed care and are combined with plans that contract with Medicare for the original Part A and Part B services mentioned earlier.
If you choose to enroll, your choice of doctor is limited to those who join the plan. Medicare makes payments that replace amounts formerly paid under Parts A and B. Your premium equals the amount you would normally pay under Part B.
In January 2005, Medicare introduced Part D, a voluntary prescription drug plan. If you’re eligible, you can pick between a standard plan and an alternative plan. In addition, you’ll have to make decisions about a supplemental benefit, and whether you prefer drug-only coverage or an integrated plan.
Even with all the updates, some provisions remain the same. For instance, Medicare benefits are available for people under age 65 with certain disabilities and for people of all ages with end-stage renal disease. Items that are not covered still include hearing aids, long term care or health care you need while traveling in a foreign country (except in limited cases).
So what’s ahead for an increasingly complicated program? Look for more changes in 2006, including an increase in Part B deductibles and premiums. Over the longer term, legislative, economic and demographic trends indicate the shift toward complexity is likely to continue.