Trying to make sense of Medicare’s alphabet soup? Each part is different, but they all work together to give you comprehensive health care coverage. Here’s what you need to know about Medicare Parts A, B, C, and D before you enroll.
Part A is sometimes called hospital insurance, but there’s more to Part A than just hospital care. In addition to covering your inpatient hospital coverage, Part A also pays for hospice care, skilled nursing facility stays, and certain home health care costs.
Most people get premium-free Part A if they have a qualifying work history. You pay a $1,364 deductible for each benefit period, which begins with a qualifying admission and ends after you have gone 60 without a hospital or skilled nursing home-stay. You can pay the Part A deductible multiple times in a year. There is no coinsurance for the first 60 days as a hospital inpatient; a $322 daily copayment applies to days 61 through 90.
Part A and Part B are considered Original Medicare. Part B covers doctor and specialist visits, diagnostic tests, outpatient procedures, and medical therapies. It also pays for durable medical equipment and some home health care services. Preventive care and wellness visits are also covered by Part B.
Most people pay $135.50 each month for Part B, although those with higher incomes pay an adjustment. Part B has a $185 annual deductible, and most services have a 20% coinsurance amount.
Medicare Advantage is technically Medicare Part C. Medicare Advantage is an alternative way to get your Medicare benefits. By law, all Medicare Advantage plans must cover—at a minimum—the same services covered by Original Medicare.
Medicare Advantage plans are offered by private insurance companies such as Aetna, Anthem, Blue Cross Blue Shield, Humana, and UnitedHealthcare. These insurance companies design their own plans and set their own premiums, deductibles, and cost-sharing structures. All Medicare Advantage plans have a maximum annual out-of-pocket limit on your health care expenses.
A portion of your Medicare premiums go to the insurers to cover your care, so the companies compete for new members. This competition is behind many of the extra perks and benefits offered in most Medicare Advantage plans. For example, most plans include Part D prescription drug coverage, and many include benefits for routine vision and dental care, which is not available under Original Medicare. You may also get perks such as free or discounted fitness memberships, home meal delivery, an allowance for over-the-counter medications, and access to a 24/7 nursing hotline.
If you choose Medicare Advantage, you must continue to pay your Part B premium each month, plus any premium charged by your plan. Depending on where you live, you may be able to buy a zero-premium Medicare Advantage plan.
Part D is your prescription drug coverage. These are also private plans; you pay a separate premium for this coverage unless it’s included in your Medicare Advantage plan. If you choose Original Medicare, you’ll need to sign up for a stand-alone Part D prescription drug plan.
In addition to Part D premiums, you generally have an annual deductible before your prescription drug coverage kicks in. Most plans use a tiered formulary, which is the list of medications covered by your plan. Prescription drugs in the lowest tier have the lowest copayments, while those in the higher tiers cost more out-of-pocket.
If you’re approaching your Medicare Initial Enrollment Period and you’re not sure which path makes sense for you, get in touch for a free consultation. We’re happy to visit you at home or here in our office to help you learn more about your Medicare options.