One of the most frequent questions I get from beneficiaries new to Medicare is what do those letters mean? Let's face it you have probably been insured all your life and none of the plans were divided up in different parts and had letters assigned to types of coverage. You just got health insurance and usually the drug plan was most often included in it.
Medicare is different because it was created in the 60's when health insurance had hospitalization coverage (the base plan) and then added more comprehensive coverage outside the hospital (the plus plan). It was called "base-plus" by many agents at the time. While managed care evolved in the 70's and new "preferred provider" plans flourished next, Medicare never changed its format
Original Medicare was just A and B. Part A for hospital which also included skilled nursing facilities, hospice and home health care. Part B handled most services outside the hospital or facility setting including all diagnostics, doctor visits and outpatient procedures. The Balanced Budget Act of 1997 added the third letter "C" when private insurers took on Medicare risk contracts in exchange for a monthly reimbursement from Medicare and beneficiaries could replace original Medicare with contracted medical services from a private insurer. These became what we currently know as Medicare Advantage plans but were originally named "Medicare +Choice Plans" where the C came from.
The last letter to be added to Medicare was prescription drug coverage called Part D which was enacted in 2003 called The Medicare Modernization Act and became available in 2006 only six years ago. The coverage is not sold by the government or Social Security. You can only get this coverage from a private insurance company that offers a plan that is approved by CMS (the Center for Medicare and Medicaid Services).
Betsy Vipond is CEO of The Senior Health Advisor and has been in insurance for over 38 years. She is a board member of Tampa Bay Health Underwriters part of the National Association of Health Underwriters and specializes in Medicare products. You may contact her at 800.603.0901
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