Medicare Made Easy as ABC (and D)

Julie VanDyke

 

If you’re preparing to enroll in Medicare, you’ve probably heard about Parts: A, B, C, and D.

 

Although it may seem like a quagmire of alphabet soup at first, each part — or letter — of Medicare has a specific purpose which is important to understand. Let’s break it down.

 

PART A

Hospital Insurance

Think of Medicare Part A as your “room and board” coverage for hospital care. It helps pay for:

• Inpatient hospital stays
• Skilled nursing facility care (following a

hospital stay, if needed)

• Hospice care
• Some home health care

 

Most people do not pay a monthly premium for Part A because they or their spouse worked and paid into Medicare for at least 10 years (or 40 quarters). But while the premium for Part A may be free, there can be deductibles and coinsurance costs.

 

PART B

Medical Insurance

Medicare Part B covers the doctor’s side of your care, which includes:

• Doctor visits (both in-person and telehealth)
• Outpatient care
• Preventive services like flu shots and screenings
• Durable medical equipment, such as walkers

or oxygen

 

Unlike Part A, Part B does have a monthly premium, set each year by Medicare. There is also an annual deductible and usually 20 percent coinsurance for most covered services.

 

Together, Parts A and B are known as “Original Medicare.”

 

PART C

Medicare Advantage Plans

Part C is known as “Medicare Advantage” (all-in-one plans). These plans are offered by private insurance companies that contract with Medicare. Part C provides the same coverage as Medicare Parts A and B, but many also include prescription drug coverage (Part D) bundled into the plan. Exercise due diligence when choosing a Medicare Advantage plan to ensure it covers prescription drugs.

Medicare Advantage plans also offer benefits that go beyond Original Medicare, such as:

• Dental, vision, or hearing care
• Fitness programs
• Transportation to appointments
• Money to spend toward groceries or utilities,

and more

 

Costs and coverage details vary by plan, so it’s important to compare options in your area if you’re considering Part C.

 

PART D

Prescription Drug Coverage

Like Medicare Advantage (Part C), Part D plans are offered by private insurers approved by Medicare.

 

You can get Part D coverage in two ways:

1. As a stand-alone plan (to go alongside Original Medicare Parts A and B), or
2. Built into a Medicare Advantage plan

Each Part D plan has its own list of covered medications — referred to as a “formulary” — which can change from year to year, along with premiums, deductibles, and copays.

 

Important: don’t let “D” stand for “Disaster!” As soon as you become eligible to enroll in Medicare Parts A and B, you also need to concurrently sign up for Part D, or risk paying a late enrollment penalty. This penalty is calculated for each month you did not have credible Part D coverage after you enrolled in Medicare. The penalty is added on top of your Part D premium for the lifetime of your plan. Ouch!

 

For most Medicare-eligible people, the choice comes down to staying with Original Medicare (Parts A and B) and adding a stand-alone Part D plan, or choosing a Medicare Advantage Plan (Part C).

 

Medicare’s lexicon of letters may seem confusing at first, but arming yourself with the knowledge of how each part works and the available options will make you the master of your personal health plan for years to come!

 

 

 

Julie VanDyke is a freelance writer specializing in retirement matters. She is committed to simplifying Medicare for all.