With four distinct parts, Medicare can be an alphabet soup of complexity. Our goal is to help you understand each part and how they impact your healthcare costs. So, let’s wrap our heads around it.
Medicare is federal health insurance available to nearly all U.S. citizens and legal residents 65 years of age and over who have previously worked and paid U.S. taxes or who are/were married to someone who did.
Now that we know what it is, let’s talk about what it covers. Medicare has four key parts — A, B, C, and D. Understanding the features of each can help you maximize your coverage and benefits.
Medicare Part A: Hospital Insurance
This insurance helps cover hospital stays and skilled nursing services (post-hospital care). It could also help with hospice and professional care for those homebound. As long as you or your spouse have made Social Security contributions for at least 10 years, you will not pay a premium for Part A. However, you will pay a monthly premium if you haven’t paid any contributions. Things to note for Part A:
- You can select any qualified provider in the U.S. who is seeing new patients.
- There are coverage limits, and you may incur out-of-pocket costs (if you are hospitalized for more than 90 days at a time, for instance).
- Doctoral services provided during a hospital stay are not covered.
- You must pay a deductible before Part A pays for your costs.
- You may also incur coinsurance costs.
Medicare Part B: Medical Insurance
This insurance covers doctor visits and other medical services, such as outpatient care at hospitals, laboratory tests, and some nursing care. Key features of Part B coverage include:
- You may choose any qualified provider in the U.S. who is seeing new patients.
- There are coverage limits on a few services, such as occupational therapy.
- Part B may not cover vision, dental, or hearing services.
- It may not cover assistance with bathing or getting dressed, either.
- Most people pay a premium for Part B coverage. If you receive Social Security, this will be deducted from your benefits.
- You must pay a deductible and coinsurance.
- Coinsurance is typically 20% of the Medicare-approved amount for services, outpatient therapy, and certain medical equipment.
Medicare Parts A and B are known as Original Medicare. Keep this in mind as we go over Parts C and D.
Medicare Part C: Medicare Advantage (private)
These plans are offered by private insurance companies and pay for certain hospital costs, doctor visits, and other services. Part D coverage (coming up next) may also be included in these plans.
- Some plans allow you to choose a primary care doctor, while others allow you to go to any Medicare provider.
- Coverage limits vary by plan.
- Part C generally covers Original Medicare except for hospice care, which is covered under Part A.
- Holders of Part C plans must continue to pay their Part B premium. Part C plans may also have their own premiums.
- Deductibles, copays, and coinsurance vary by plan; however, all have limits for your out-of-pocket expenses.
Medicare Part D: Prescription Drugs
Plan D applies to prescription drug coverage and is also offered by private insurance companies. Coverage varies depending on the plan, with pricing options that can be complex. Other facets to be aware of:
- Many plans have coverage gaps. During these gaps, they may not cover all drug costs.
- Check the terms of any plan that you are reviewing. For example, in a recent year, a beneficiary and the insurer paid $3,820 for prescription drugs within a benefit period. However, the beneficiary was also required to pay 47.5% of the plan’s covered drugs until the out-of-pocket expenses totaled $5,100. It was after that point that catastrophic coverage kicked in.
- Some Medicare Advantage plans include Part D coverage. Make sure to check.
- Plans may restrict which pharmacies you can use.
- Coverage limits vary, each offering various levels of copays.
- Plans also differ in coverage and exclusions.
- Monthly premiums vary, as do deductibles and copays.
If you’re still following along (I’m impressed) and want to know more, you can visit the Medicare website for the most updated information.
It can be confusing and complicated to research on your own. You can easily get lost in the weeds with all the Medicare details. If you’re looking for help or need someone to steer you in the right direction, please reach out. We’re here to help!