If you (or your loved one) are becoming eligible for Medicare through age or disability, understanding how Medicare works and what your options are can be a rather daunting task.
To help you with this we have broken down the four main parts of Medicare in order to be more easily understood, beginning with this general overview…
Original Medicare is defined as Part A (Hospital) and Part B (Medical) insurance. When signed into law by then President Lynden Johnson in 1964, it was never intended to be an all-inclusive insurance policy for retirees, but simply a basic plan to help ease some of the burden of health care costs.
In the ensuing years, Medicare has added Parts C and D as well. All parts will be covered in more detail but for now, here is a general overview…
Part A – Hospital insurance helps cover the following:
- Inpatient care in hospitals
- Inpatient care in a skilled nursing facility (NOT custodial or long‑term care)
- Hospice services
- Home health care services
- Inpatient care in a Religious Nonmedical Health Care Institution
Part A is premium-free for qualified workers and certain deductibles and copayments apply. For a more in-depth look at Medicare Part A, click here.
Part B Medical Insurance:
Medicare Part B covers medically-necessary services such as for doctors, outpatient care, home health care and durable medical equipment. Part B also covers many preventive services which are covered in our article on Part B.
Beneficiaries will usually pay all costs until the yearly Part B deductible is met before Medicare starts paying its portion, and then typically pay 20% of the service. A complete list of covered services is included in our article on Part B.
Premiums are charged for Part B Medical Insurance.
Part C Medicare Advantage
Medicare Advantage Plans are another Medicare option. They are also known as “MA Plans,” and are offered by private insurance companies approved by Medicare. They actually “replace” and enhance Parts A and B to a degree and as such Medigap Supplement policies are not allowed.
Medicare Advantage Plans include Part A (Hospital Insurance) and Part B (Medical Insurance) coverage and may offer extra coverage as well. Some also include Medicare (Part D) prescription drug coverage. To learn more about Part C, click here.
Part D Prescription Drug Coverage
Prescription drug coverage is available through a plan administered by an approved insurance company. They can typically be joined during Initial, Yearly or Special Enrollment Periods through stand alone Medicare Prescription Drug Plans or Medicare Advantage Plans.
The typical costs throughout the year for Part D are for the monthly premiums, annual deductible, copayments and costs during the coverage gap. Costs will vary widely depending on the drugs used, plan chosen, whether drugs are on a plan’s formulary and other considerations. For more detailed information and a helpful chart, click here.