[최선호의 보험, 그것이 알고 싶다] Medicare and Plan Types

The Korean word ‘typewriter’ is called ‘typewriter’ in English. It means ‘machine for typing letters’. Here, ‘type’ means ‘the shape of letters’, or ‘type’. On the other hand, we often say, “That person is not my type.” In other words, it means, “He is not the type of person I like.” Judging from these two things, we can see that the word ‘type’ ultimately refers to ‘a type that is formally determined’, or ‘a standardized type’. In the American health insurance industry, the word ‘type’ is used a lot and is also treated very importantly. This is because the health insurance type chosen by the consumer determines how the subscriber receives the benefits. Health insurance type is also often used in Medicare. Let’s find out how and in what cases health insurance type is used and how to choose it.

Mr. Type-byul has been enrolled in health insurance for a long time. Because of this, he is well-versed in the American health insurance system, especially in terms of plan types. He will begin receiving Original Medicare benefits (Medicare Part A and Part B) next month. This is because Mr. Type-byul will be 65 next month. Since he was told that he could apply for Original Medicare benefits starting three months before he turned 65, Mr. Type-byul applied two months in advance. While applying, he asked the Social Security Administration representative if Medicare had plan types such as HMOs and PPOs. The representative flatly replied that there were no. So he came to believe, “Medicare does not have plan types.” He recently received his Original Medicare card. Since people said that Original Medicare only covers 80% of medical expenses and that he would receive many additional benefits if he enrolled in Medicare Part C, Mr. Type-byul decided to visit an insurance specialist to consult about enrolling in Medicare Part C. But as soon as he sat down with the specialist, the specialist started explaining the types of plans in Medicare Part C. Mr. Type was dumbfounded. The Social Security Office representative clearly said that Medicare does not have plan types, but the insurance specialist explained Medicare Part C by first mentioning the types of plans. What the hell is going on?

What the Social Security Office representative said is true, and what the insurance professional said is true. However, what the Social Security Office representative said is the plan type for ‘Original Medicare’, and what the insurance professional said is the plan type for ‘Medicare Part C’. In the US, there are plan types, and the plan types are divided into HMO, PPO, POS, etc. However, there is no such thing as a plan type in Original Medicare (Part A and Part B). In other words, there is no plan type such as HMO, PPO, or POS. However, there is a plan type in Medicare Part C (aka Medicare Advantage). Not only does it exist, but you must choose one of the plan types. The reason for the plan types is so that the health insurance company can operate the health insurance effectively and make as much profit as possible. From another perspective, it can be said that the insurance company must make a profit so that the insurance policyholders’ insurance premium burden is reduced. Since the insurance companies that operate Medicare Part C receive a certain amount of money from the Medicare authorities and operate it, they must operate the Part C plan effectively. Therefore, it can be said that the reason there are still many Medicare Part C plans that do not charge premiums at all is because insurance companies are operating well by utilizing plan types.

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