This is the original version of Medicare that is similar to a private fee-for-service health insurance plan. There is a schedule of benefits and all the features of a traditional fee-for-service insurance plan including freedom of choice, deductibles, and co-insurance. FFS Medicare consists of two parts:
- Medicare Part A covers inpatient care in hospitals and similar settings. Medicare Part A is free for most Medicare beneficiaries.
- Medicare Part B covers medically necessary services such as a doctor’s visits and outpatient care. Part B is voluntary, and you must pay for it each month. If you cannot afford Medicare Part B, you may apply for assistance. For more information see http://www.medicare.gov/ or contact 1-888-MEDICARE.
Importantly, Medicare Parts A and B typically pay only 80 percent of the usual and customary
charges, leaving the patient to pay the other 20 percent. Individuals receiving Medicare, particularly those over 65, can purchase a medigap plan
to cover the other 20 percent.
These health insurance policies supplement Fee-For-Service Medicare benefits. Medigap coverage varies but is typically designed to pay portions of medical bills that Medicare
doesn’t pay including deductibles, the 20 percent Medicare doesn’t pay, and, sometimes, charges above Medicare covered amounts. Some Medigap policies will also cover items that Medicare does not cover. It is important to apply for a Medigap plan during the open enrollment period or you
may lose access to this option.