Medicare Parts
Medicare Part A, Part B, Part C, and Part D
Medicare is a federal program that was established to pay certain healthcare expenses for people aged 65 or over, as well as for other select individuals under age 65 who have qualifying conditions.
When it was initially introduced in 1965, Medicare had two parts. These were Medicare Part A and Medicare Part B. These two parts are still referred to as Original Medicare. Over time, however, the program has expanded greatly to include Medicare Parts C and D, as well.
The four parts of Medicare include the following:
- Medicare Part A – Hospital Coverage. This part of Medicare coverage will help pay for inpatient care in a hospital or a skilled nursing home (following a hospital stay). It also covers some types of home healthcare, as well as some hospice care.
- Medicare Part B – Medical Coverage. This part of Medicare helps to pay for doctors’ services as well as numerous other services and medical supplies (“durable medical equipment”) that are not covered in Medicare Part A.
- Medicare Part C – Medicare Advantage. Medicare Part C is also referred to as Medicare Advantage. This is primarily a managed care approach to delivering Medicare-covered services. Individuals with Medicare Parts A and B can choose to receive all of their healthcare services through a Medicare Advantage provider organization under Medicare Part C.
- Medicare Part D – Prescription Drug Coverage. This part of Medicare helps to pay for prescription drugs. Stand-alone Medicare Part D plans are offered through private health insurance carriers rather than through Medicare. Therefore, each plan may have different coverage and differing premium prices.
Medicare Part A
Medicare Part A helps cover inpatient care in a hospital. This includes critical illness hospitals and skilled nursing facilities (although certain conditions apply). Part A of Medicare also helps with covering hospice and home healthcare. Part A participants must meet certain conditions to get these benefits.
Most people automatically get Medicare Part A coverage without paying a monthly premium. However, Part A of Medicare can be purchased. The monthly premium for Medicare Part A is based on the number of work credits that you have.
While Medicare Part A covers a wide range of hospital-related services, you could be responsible for some out-of-pocket expenses, such as deductibles, copayments, and/or coinsurance charges.
Medicare Part B
Medicare Part B is optional, and it requires a monthly premium. Most people pay $174.70 monthly for their Medicare Part B premium (in 2024). However, the premium could be higher if you did not sign up for Medicare Part B when they first became eligible. The Part B premium could also be more if you are considered a higher wage earner.
An annual Medicare Part B deductible must be satisfied before the benefits begin paying out. In 2024, the amount of this deductible is $240. Once the deductible has been met, you will typically be responsible for paying a 20% coinsurance charge for approved doctors’ services, outpatient therapy, and durable medical equipment.
Medicare Part C / Medicare Advantage
Medicare Part C combines the coverage of Part A and Part B. Private insurance companies that Medicare approves provide this coverage. It provides an alternate method of receiving Medicare Parts A and B. There may also be coverage not found in Original Medicare, such as dental and vision. Some Part C plans also automatically include Medicare Part D prescription drug coverage.
Medicare Part C is also called “Medicare Advantage” and works similarly to an HMO or PPO plan. So, for instance, you may be required to receive your healthcare services from providers included in a specific network.
Medicare Part D
Medicare Part D is for prescription drug coverage. If you are covered by Original Medicare (Parts A and B), you can purchase Medicare Part D, too. Insurance companies offer these plans, so you must ensure that your medications are covered by a plan you’re considering.
You should also compare the premium cost of several Medicare Part D plans before you commit to purchasing one. There may also be out-of-pocket charges—such as deductibles and coinsurance—associated with Medicare Part D drug plans.
Your Medicare Options
Recipients of Medicare — who are also known as Medicare beneficiaries — can choose the Original Medicare plan (which is Medicare Parts A and B), or they can opt to receive a Medicare Advantage plan — if there is one available in their area — for the delivery of their Medicare Parts A and B services.
The Original Medicare plan (Medicare Part A and B) is a fee-for-service plan the federal government manages. Fee-for-service means that participants in the plan are typically charged a fee for each healthcare service or the supplies they receive. However, enrollees can typically choose the doctor or other healthcare providers they use.
Also, for some services, Medicare beneficiaries will pay a deductible before Medicare pays its share of the cost. Then, when a Medicare-covered supply or service is provided, Medicare will pay its portion for the services, and the beneficiary will pay their share. This is referred to as either coinsurance or a copayment.
There can be many “moving parts” regarding Medicare coverage. So, it is recommended that you discuss your options with an advisor who is well-versed in how these healthcare plans work and which one may be able to fit your particular needs and budget best.
Source: https://medicare.gov
