About 1.15 million people in Minnesota are eligible for Medicare, the government health insurance program for U.S. seniors and younger people with disabilities.
Historically, the program had two primary components — Part A for hospitalization and Part B for doctor visits — and these “original Medicare” benefits covered a great many, but not all, hospital and physician bills.
“For most services covered by Medicare, beneficiaries incur out-of-pocket costs such as a $1,632 deductible for inpatient hospital admission and an annual deductible of $240, after which a 20% coinsurance applies for physicians and other Part B services,” Paul Ginsburg, an economist at University of Southern California, co-wrote in an article this year for Health Affairs Forefront.
To handle these out-of-pocket costs, many seniors buy a Medicare Supplement policy — also known as a “Medigap” plan — from a private insurer to extend original Medicare coverage. Beneficiaries also can buy a separate Part D policy from a private insurer for prescription drug costs.
In Minnesota this year, about 200,000 people are buying Medigap policies. About 345,000 people have prescription drug plans.
A variation on original Medicare called Medicare Advantage is what’s commanded headlines in recent months. With Medicare Advantage, seniors opt to receive their hospital, physician and Part D drug benefits (in most cases) through a managed care plan run by a private insurer.
