If you’re getting ready to retire, you should start brushing up on the parts of Medicare. There are four Medicare parts in total, and it’s important to know what each one entails before you begin dotting the I’s and crossing the T’s on your paperwork.
We’ll cover the bare-bones basics in this article to give you a solid foundation and help simplify things in the future. Understanding this basic information first will help you put together a comprehensive Medicare plan at a cost that’s most affordable to you.
Medicare Parts explained
Four parts to Medicare apply to every individual who enrolls in the program. Those (creatively named) parts include:
- Part A – Inpatient and Hospital Services
- Part B – Doctor and Outpatient Services
- Medicare Advantage – Part C
- Part D – Stand-Alone Prescription Drug Coverage
Medicare Part A typically covers hospital expenses, and Part B helps with outpatient costs (like regular check-ups and non-hospital care). Medicare Part D helps beneficiaries pay for their prescription drugs.
Part C is a whole different animal compared to the other three parts. It includes the same benefits as the first two parts of Medicare and usually helps with prescription drug costs. Medicare Advantage plans can offer additional benefits Medicare doesn’t cover.
Medicare Part A
Part A has benefits to help beneficiaries as they pay for inpatient hospital care and similar services. In addition to hospital care, Part A helps pay for:
- Hospice care if you have been diagnosed with a terminal condition
- Home health care and home health aid services
- Skilled nursing facilities
Beneficiaries who’ve worked at least 40 quarters consecutively during their employment years will not have to pay a monthly premium for Part A. But you’ll have a deductible to pay per benefit period if you require care and coinsurance costs, which will vary based on the length of your hospital stay.
Medicare Part B
Part B encompasses regular doctor visits, outpatient services, and durable medical equipment. It also covers the costs of outpatient procedures like simple surgeries and physical rehabilitation.
There is a standard monthly premium that most beneficiaries will pay, as well as an IRMAA for higher-income beneficiaries. However, most beneficiaries pay the standard premium. Part B also comes with an annual deductible.
After you meet your deductible, you’ll have a coinsurance payment which costs 20% of your Medicare-approved cost of treatment.
Medicare Part C
Part C, also known as Medicare Advantage, is a different health plan than the other three Medicare parts and must include the same benefits as Part A and B.
In addition, to covering the same benefits as Traditional Medicare, most include drug coverage. These plans also include additional benefits in most cases. Additional benefits included could include dental, vision, hearing, gym memberships, and more.
Part C Medicare plans will operate like the typical health insurance policies you had while working. These plans are managed by private health insurance companies like Humana or Aetna, not the government. Most areas with low premiums and many regions have zero-premium programs available.
To be eligible for a Medicare Advantage plan, you must have active enrollment in both Part A & Part B. You still have to pay your monthly premium for Part B and your premium for Part C.
Medicare Part D
Private providers manage Part D, but the government endorsed and regulated those companies. You pay a monthly premium that varies based on your home and chosen provider. These plans follow the four-phase structure outlined by the Centers for Medicare and Medicaid Services.
Recipients who are on expensive prescriptions may fall into what is known as the Part D donut hole. But once you hit a specific annual out-of-pocket expense cap, emergency coverage will kick in and discount your medications to a more manageable level until the first of the following year.
FAQs
What parts are known as Traditional Medicare?
Tradition Medicare refers to Part A and Part B. These parts cover your inpatient hospital, doctor, and medical services.
What’s the difference between Medicare Parts C and Part D?
Part C is an all-in-one plan that combines the benefits of Parts A, B, and in most cases, D. In addition to the primary benefits, these plans offer additional coverages and benefits that Traditional Medicare doesn’t
Part D is stand-alone prescription coverage.
Is Medicare Advantage and Part C the same thing?
Yes! Medicare Advantage is another name for Part C. These all-in-one plans include Parts A, B, and D benefits in one program.
Is Medicare Part A and Part B free?
No, If you have worked at least 40 quarters, which is ten years, or are married to a spouse that has, you’ll qualify for premium-free Part A benefits. Part B has a standard premium that most people have to pay.
Help with Understanding Medicare and Your Options
Many people need additional assistance with understanding how Medicare works. There are a few paths and a ton of choices. We’re here to help guide you and ensure that you understand your plan options and can make the best decision for you.
Our agents are experts when it comes to all aspects of Medicare. They’re standing by to educate you and help walk you through the process.
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