Medicare Parts A through D

Breaking down the basics of Medicare to understand each part – what they cover and where they come from.

Parts A & B: Original Medicare.

America created Medicare for seniors in 1965 with two components: Part A is hospital insurance. It provides coverage for inpatient stays at medical facilities. It can also help cover the costs of hospice care, home health care, and nursing home care – but not for long and only under certain parameters. Part B is medical insurance and can help pick up some of the tab for physical therapy, physician services, expenses for durable medical equipment (scooters, wheelchairs), and other medical services such as lab tests and varieties of health screenings.¹

Medicare Part A will only pay for a maximum of 100 days of nursing home care, provided certain conditions are met. Under current rules, you pay $0 for days 1-20 of skilled nursing facility (SNF) care. During days 21-100, a $167.50 daily coinsurance payment may be required of you. If you stop receiving SNF care for more than 30 days, you need a new 3-day hospital stay to qualify for further nursing home care under Part A, but if you can go 60 days in a row without SNF care, the clock resets and you are once again eligible for up to 100 days of SNF benefits via Part A.²

Part B requires monthly premiums to get it, and a yearly deductible plus 20% of costs. The premiums vary according to the Medicare recipient’s income level. The standard monthly premium amount is $134 in 2018, but some people who receive Social Security benefits are paying lower Part B premiums (on average, $130). The current yearly deductible is $183. Some people automatically receive Part B coverage, but others must sign up for it.³

A 2018 report from Social Security and Medicare trustees forecasts the Medicare trust fund for inpatient care will not be able to cover projected medical bills starting in 2026, three years earlier than previously expected. ⁴

Part C: Medicare Advantage plans

Insurance companies offer Medicare-approved Part C plans. They combine all the benefits of Part A and Part B plus more: many feature prescription drug coverage as well as vision and dental benefits. To enroll in a Part C plan, you need have Part A and Part B coverage in place. To keep up your Part C coverage, you must keep up your payment of Part B premiums as well as your Part C premiums.⁵

Not all Part C plans are created equally. Provider networks, premiums, copays, coinsurance, and out-of-pocket spending limits can all vary widely, so shop around. During Medicare’s annual Open Enrollment Period (October 15 - December 7), seniors can choose to switch out of Original Medicare to a Part C plan or vice versa; although any such move is much wiser with a Medigap policy in place.⁶

Medigap Plans

Medigap plans, also called Medicare Supplement plans, address the gaps in Part A and Part B coverage. If you have Part A and Part B already in place, a Medigap policy can pick up some copayments, coinsurance, and deductibles for you. Some Medigap policies can even help you pay for medical care outside the United States. You pay Part B premiums in addition to Medigap plan premiums to keep a Medigap policy in effect. These plans have been sold without prescription drug coverage since 2006.⁷

Medicare Part D: Prescription Drug Plans

While Part C plans commonly offer prescription drug coverage, insurers also sell Part D plans as a standalone product to those with Original Medicare. As with Medigap and Part C coverage, you need to keep paying Part B premiums in addition to premiums for the drug plan to keep Part D coverage going.⁸

Every Part D plan has a list of medications covered under the plan. Most Part D plans rank approved drugs into tiers by cost. The good news is that Medicare’s website will determine the best Part D plan for you. Go to medicare.gov/find-a-plan to start your search; enter your medications and the website will do the legwork for you.⁹

Plan Ratings

Medicare annually rates these plans. One star ratings are worst; five stars are best. Ratings are made according to member satisfaction, provider network(s), and quality of coverage. As you search for a plan at medicare.gov, you also have a chance to check out the rankings.¹⁰

Contact a Medicare specialist before you enroll. Even with its user-friendly website and plenty of online third-party guides to help those new to it, Medicare remains intricate; its nuances, hard to grasp. A financial or insurance professional well versed in Medicare enrollment, benefits, and regulations may make the process simpler for you.

Citations.

1 - mymedicarematters.org/coverage/parts-a-b/whats-covered/

2 - medicare.gov/coverage/skilled-nursing-facility-care.html

3 - medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html

4 - www.cbsnews.com/news/social-security-says-costs-will-exceed-income-this-year/

5 - medicareinteractive.org/get-answers/medicare-health-coverage-options/medicare-advantage-plan-overview/medicare-advantage-basics

6 - medicare.gov/sign-up-change-plans/when-can-i-join-a-health-or-drug-plan/when-can-i-join-a-health-or-drug-plan.html

7 - medicare.gov/supplement-other-insurance/medigap/whats-medigap.html

8- ehealthinsurance.com/medicare/part-d-cost

9 - medicare.gov/part-d/coverage/part-d-coverage.html 5/8/18]

10 - medicare.gov/sign-up-change-plans/when-can-i-join-a-health-or-drug-plan/five-star-enrollment/5-star-enrollment-period.html

Find more information and links to online research tools at the official Medicare blog:
blog.medicare.gov/category/open-enrollment/

Find more information and links to online research tools at the official HealthCare.gov site:
www.healthcare.gov/