Medicare is a health insurance program for people over 65. When choosing the best plan, it can be confusing and challenging to sort through all available options. That’s why we’ve broken down each part of Medicare into sections to give a better understanding of what type of coverage works best.
Part A – Hospitalization Coverage
A person will automatically enroll in Part A when they apply for Medicare. It pays for hospitalizations, hospice care, and skilled nursing care. Most people do not have to pay a premium for Part A since they’ve already contributed to the system through payroll deductions for Medicare.
Every time a person is admitted to a hospital, Medicare charges a hefty deductible. They can purchase a supplemental or Medigap policy to pay for that deductible and some out-of-pocket expenses for the other components of Medicare.
Medicare pays for almost all hospital services for the first 60 days in the hospital. If a U.S. citizen has not worked long enough to qualify for Medicare, they may be able to join the program by paying a Part A premium.
Part B – Medical and Outpatient Care
The outpatient services covered by this Medicare section include doctor visits, lab work, diagnostic exams, ambulance, medical equipment, and other outpatient services. Since Part B has higher costs, one may want to put it off if they still work and have health insurance through their job. However, if a person doesn’t have another insurance and doesn’t enroll in Part B, they’ll almost certainly have to pay a higher monthly premium for the rest of their lives.
There will be an annual deductible. In addition, the insured will be required to pay 20% of the bills for doctor visits and other outpatient services. The monthly premium is deducted from their benefit if they receive Social Security.
Part C – Medicare Advantage
Medicare Advantage is the private health insurance alternative to the federally run Medicare. If a person chooses a Medicare Advantage — or M.A. — plan, they must still enroll in Parts A and B. They will also need to select a Medicare Advantage plan and enroll with a private insurer.
The federal government requires that these plans cover everything original Medicare does, and some plans cover services that original Medicare doesn’t, such as dental and vision care.
Prescription drug coverage is included in most Medicare Advantage plans. Medicare Advantage plans are typically health maintenance organizations (HMOs) or preferred provider organizations (PPOs).
In HMOs, the insured will select a primary care physician to direct their care. PPOs have networks of doctors and facilities that the insured can visit without a referral.
Part D – Prescription Medications
A Part D plan is obtained from a private insurer. This portion of Medicare covers some of the insured’s prescription medications. Each typically carries premiums and additional out-of-pocket expenses, either flat copays for each prescription or a percentage of the prescription costs.
One can check the Medicare website to see if the plan they’re considering covers their medication. It’s critical to double-check plans during open enrollment each year, as these lists change every year.
