If life is a journey, then you’ll want to pack for the trip. Medicare, the government-sponsored health insurance program for people 65 and over (and those with certain disabilities), is one of the most important items you can take with you.
However, Medicare is broken down into parts. And you’ll need to understand them before you can choose which ones you plan to take. Let’s explore the different parts of Medicare and learn how you can use them to meet your health goals.
Medicare Part A — Hospital coverage
- What Medicare Part A covers: Part A covers expenses associated with hospital care. It includes coverage for services like nursing care and hospital stays. It also covers some hospital-related care that takes place outside a hospital setting, like skilled nursing care after you leave the hospital.
- What Medicare Part A costs: You generally won’t have to pay a monthly premium for Medicare Part A if you or your spouse paid Medicare payroll taxes for 40 quarters or more. But you do need to pay deductibles before Medicare will cover any hospitalization costs.
Medicare Part B — Covering your doctor visits and beyond
- What Medicare Part B covers: Part B pays for services like:
- Doctor visits
- Durable medical equipment
- Outpatient procedures (even if they occur at a hospital)
- Lab services
- other testing
- What Medicare Part B costs: Most people need to pay a monthly premium to maintain their Part B coverage. You will also need to pay a deductible before Part B begins paying for services.
Medicare Part A + Medicare Part B = Original Medicare
Part B complements your Part A coverage to provide coverage both in and out of the hospital. In fact, Part A and Part B were the first parts of Medicare created by the government. This is why the two parts together are often referred to as “Original Medicare.” Additionally, most people who do not have additional coverage through a group plan (like those offered by employers) generally sign up for Parts A and B at the same time.
Medicare Part C — Combining your coverage
Medicare Part C is also known as Medicare Advantage. It's made up of plans approved by Medicare that are offered through private insurance companies. Before enrolling in a Medicare Advantage plan, you will still need to sign up for both Part A and Part B, and then choose a Medicare Advantage plan that is right for you. This means that to get a Medicare Advantage plan, you will have to sign up directly with the private insurer that offers the plan you want after you’ve enrolled in Part A and B.
- What Medicare Part C covers: All Medicare Part C, or Medicare Advantage, plans cover everything Original Medicare covers. But Medicare Advantage plans can also cover more. Examples of common additional benefits include:
- Dental, vision or hearing services
- Prescription drug coverage
- Fitness club memberships
- What Medicare Part C costs: Once you have a Medicare Advantage plan, you continue to pay a monthly Part B premium to Medicare. In some cases, you may also pay an additional premium to the company that provides your Part C plan. The amount of the premium varies between Medicare Advantage plans. Medicare Advantage also comes with an additional benefit: a limit on the amount you pay for your covered medical care in a given year. This limit is known as an out-of-pocket maximum. Original Medicare does not have this feature.
Medicare Advantage plans can offer additional benefits because the plans are made up of networks of health care providers. Networks can be more efficient in delivering care. As a result, they reduce overall health care costs. Some Medicare Advantage plans require you to use their network of providers. Others allow you to go out-of-network, usually for a higher cost.
Medicare Part D — Your prescription drug plan
Like Medicare Advantage, Part D plans are offered by private insurance companies that are approved by Medicare. Prescription drug benefits are often included as part of Medicare Advantage plans. However, if you choose to enroll in Original Medicare you can add prescription drug coverage to your Original Medicare coverage. You can do this by purchasing a stand-alone Part D plan from a private insurer.
- What Medicare Part D covers: Part D covers prescription drugs. Every Medicare prescription drug plan has a list of drugs —also known as a formulary —that it agrees to cover. When you research a plan, check your list of medications against the prescription drugs in your plan’s formulary.
- What Medicare Part D costs: Depending on the Part D plan you choose, you will usually pay a monthly premium and sometimes a deductible, as well as out of pocket costs for your drugs. But keep in mind each plan varies in the cost of premiums, the price of drugs and the list of drugs covered.
Medicare Supplement plans — Additional coverage for Original Medicare’s out-of-pocket costs
Medicare Supplement plans are sometimes called Medigap plans. They’re sold by private insurance companies, just like Medicare Advantage and Medicare Part D prescription drug plans.
- What Medicare Supplement plans cover: Medicare Supplement plans help pay for out-of-pocket costs that Original Medicare doesn’t cover, including copayments and deductibles. That means Medicare Supplement plans are only available to people who are covered by Original Medicare. Medicare Supplement plans can offer some additional coverage like foreign travel. If you opt for a Medicare Advantage plan, you’re not eligible to buy a Medicare Supplement plan.
- What Medicare Supplement plans cost: Medicare Supplement plans charge a monthly premium. The cost of the premium varies with the plan.
About the author
Mark Pabst has worked as a writer and researcher in the health care field for almost two decades. When not writing about health he tries to stay healthy through activities like hiking, climbing and paddling in the far flung corners of his native state of California. However, despite his best efforts he still has a few unhealthy habits he can’t shake, most notably a weakness for jelly donuts.