Medicare is comprised of four distinct parts: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage plans), and Part D (Prescription Drug plans). Part B of Original Medicare covers about 80% of costs, leaving a gap that may be filled by Part C, a Medigap plan, or a Part D plan. Understanding the differences is essential to securing coverage.
Why Understanding Parts A, B, C, and D is Crucial For You
Learning the different parts of Medicare helps you secure the right coverage for your needs. However, don't forget to also confirm your eligibility timeline. Because Medicare pricing is standardized by federal regulations, enrolling outside of your Initial Enrollment Period typically results in Medicare late enrollment penalties that are applied to your future monthly premiums.
Medicare Part A: Hospital Insurance
What does Medicare Part A cover?
Part A helps cover most inpatient hospital needs, skilled nursing home care, and home health and hospice care. There is a monthly premium for Part A, but people may qualify for premium-free Part A.
Who qualifies for premium-free Part A?
Most people qualify for premium-free Medicare Part A (hospital insurance) if they are age 65 or older and they (or their spouse) have worked and paid Medicare taxes for at least 40 calendar quarters (10 years).
You may also qualify before age 65 if you have received Social Security Disability Insurance (SSDI) or Railroad Retirement Board disability benefits for 24 months, or if you have end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS).
Medicare Part B: Medicare Insurance
What medical services does Part B include?
Medicare Part B, also known as medical insurance, primarily covers medically necessary services like doctor's visits, outpatient care, durable medical equipment, and lab tests and screenings. It also covers preventive services to help manage or prevent illness, such as flu shots and certain health screenings.
Understanding the 80/20 Cost Gap in Original Medicare
After you meet your annual Part B deductible, Medicare generally pays 80% of the Medicare-approved amount for covered services, such as doctor's visits and outpatient care, leaving you responsible for the remaining 20% of costs. Because Original Medicare does not have an annual out-of-pocket maximum, these costs may add up in the event of a serious illness or prolonged medical issues. Beneficiaries may seek alternative coverage, such as a Medicare Advantage plan, or supplemental coverage, such as a Medigap plan, to account for this coverage gap.
Medicare Part C: Medicare Advantage Plans
How is Part C different from Original Medicare?
Original Medicare is a federal fee-for-service program, allowing you to see any doctor or hospital nationwide that accepts Medicare. On the other hand, Medicare Advantage (Part C) plans are offered by private insurance companies approved by Medicare, serving as an alternative that provides the same coverage as Original Medicare but may also include additional routine benefits.
Medicare Advantage plans typically operate through provider networks (like HMOs or PPOs) and may require prior authorization for certain services. In contrast, Original Medicare does not, and Medicare Advantage also includes an annual out-of-pocket maximum for Part A and B services, which Original Medicare lacks.
What additional benefits might Part C offer?
Medicare Advantage plans may include possible additional routine benefits, such as dental, vision, hearing, or wellness programs.
Medicare Part D: Prescription Drug Coverage
Do I need to enroll in Part D separately?
Medicare Prescription Drug plans, also known as Part D, are available to all Medicare beneficiaries and can be purchased as a standalone plan to supplement Original Medicare or to accompany a Medicare Supplement insurance plan. Additionally, some Medicare Advantage plans may include prescription drug coverage—these are known as Medicare Advantage Prescription Drug (MAPD) plans.
Key Questions to Help Choose the Right Coverage
When reviewing your Medicare plan options, keep these questions in mind:
Do I need prescription drug coverage?
How complex are my health needs?
Do I prefer a flexible network or an HMO or a PPO structure?
What is my potential maximum out-of-pocket cost?
What would my monthly premiums cost?
Find the Right Medicare Advantage Coverage for You With SelectQuote
To ensure you are covered in case of emergencies, preventive care, or everyday events that impact your quality of life, it is helpful to understand what the individual parts of Medicare cover, how they differ, and how you can benefit from finding the right coverage for you.
If you’re new to Medicare, lost your health insurance, or recently moved, you may be eligible for a free, no-obligation Medicare Advantage plan review with a licensed insurance agent. In just minutes, we can answer any questions you have and compare the Medicare Advantage available to you from the recognized insurance companies we offer.
