Q: I am attempting to help an elderly relative with health care coverage selection. I am so confused, and I can’t believe a senior is required to understand all of the options available. I have run into Medicare, Medi-Cal, Medicaid, Medigap and Medicare Advantage. Everything starts with an M, and they all sound alike. Also, can a senior only have one of these items or can they have a combination? Can you help a non-senior make sense of all of this?
A: At first glance, this may seem overwhelming, but I think I can provide some definitions that will help clear up this confusion. Sorry about everything starting with M, but all plans mentioned are related to Medicare coverage, the main health care coverage for seniors, and M seems to be the common denominator.
Let’s take the items you mentioned in order.
Medicare is a nationwide, federally financed health insurance plan for those 65 and older, the disabled (those eligible for Social Security disability benefits), those who have permanent kidney failure and those who have Lou Gehrig’s disease. It is the major health insurance used by the senior population and has been in effect since 1965.
Medicare is a fee-for-service program under which the cost of the service is billed to the government. This option is one that remains today.
You next mention Medi-Cal and Medicaid. I put these two programs together because they are basically the same. Medicaid is a federal health care assistance program designed to help pay medical expenses for low-income families. Medi-Cal is California’s version of that federal program.
The Medi-Cal program is jointly funded by the federal government and the state. Each state designs and administers its own program.
To be eligible for Medi-Cal coverage, applicants must meet residency, age or disability requirements and show the need for financial assistance.
Medigap insurance is additional coverage purchased by many seniors covered by original fee-for-service Medicare. Since Medicare does not fully cover health care costs, the purchase of a Medigap policy provides coverage for expenses approved by Medicare but not included in Medicare’s payment. These policies also offer some additional coverage for items not covered under the Medicare system.
Medicare Advantage, now known as Senior Advantage, was added to Medicare coverage in the 1980s and gave seniors a choice of how they want their coverage provided. This addition gave seniors a choice of selecting fee-for-service Medicare or assigning their coverage to an alternate plan. Medicare Advantage plans include HMOs and PPOs, depending on the county you live in.
You asked if beneficiaries are restricted to one type of coverage. Someone with fee-for-service Medicare is very likely also to have a Medigap policy and also could qualify for Medi-Cal.
A person with an HMO or PPO would not need a Medigap policy but could qualify for Medi-Cal. Those who have Medicare and Medi-Cal are referred to as dual-eligible (previously called a Medi-Medi).
This is a very simple explanation of the various parts of the Medicare health care program, which is very complicated. I hope it helps you to put the pieces together.