But it was never a Cadillac health plan, covering every possible expense. From the beginning, Medicare had copays and deductibles and other gaps in coverage. For example, Medicare has never covered prescription drugs outside of the hospital and provides only minimal coverage of preventive care. Doctors are reimbursed for each patient service they provide, according to Medicare s standardized fee schedule. The more services doctors provide, the more they are paid by Medicare and the patient s supplemental insurance.
Some employers offer coverage to retirees at group rates.
Other employers pay a portion of the premium. Still others cover 100 percent of the premium cost. But as health care costs have increased, many employers and retirees have begun to consider ways to reduce their expenses. Managed care is an often less expensive form of health care coverage. Managed care can fill in the gaps in Medicare coverage and sometimes offer addi-tional benefits.