Parts of Medicare: An Overview
Medicare is the federal health insurance program for individuals age 65 and older, as well as certain younger individuals with disabilities or specific medical conditions. For many retirees, Medicare is one of the most important and confusing decisions they will make, which is why understanding how it is structured is a foundational part of retirement planning.
Part A – Hospital Insurance
Medicare Part A generally covers inpatient and facility-based care, including:
Inpatient hospital stays
Skilled nursing facility care following a qualifying hospital stay
Hospice care
Limited home health care
Most people do not pay a premium for Part A, provided they or their spouse paid Medicare taxes for a sufficient period while working.
Part B – Medical Insurance
Medicare Part B covers outpatient and physician-related services, including:
Services from doctors and other health care providers
Outpatient care and procedures
Home health care
Durable medical equipment such as wheelchairs, walkers, and hospital beds
Many preventive services, including screenings, vaccinations, and annual Wellness visits
Part B does require a monthly premium. For higher-income retirees, that premium may be increased due to income-related adjustments.
Part D – Prescription Drug Coverage
Medicare Part D helps cover the cost of prescription medications, including many recommended vaccines.
Part D coverage is offered through private insurance companies approved by Medicare
You can enroll in a standalone Part D plan alongside Original Medicare, or
You can receive prescription drug coverage through a Medicare Advantage plan that includes Part D
Plan costs, covered medications, and coverage rules vary by provider and by region.
Medicare Supplemental Insurance (Medigap)
Medigap is supplemental insurance purchased from a private insurance company to help cover certain out-of-pocket costs under Original Medicare, such as deductibles, copayments, and coinsurance.
A few key points to understand about Medigap:
Policies are standardized and identified by letters, such as Plan G or Plan K
Benefits for a given lettered plan are the same regardless of which insurance company sells it
Medigap works only with Original Medicare and cannot be used with Medicare Advantage
Enrollment timing matters with Medigap. Enrolling later may result in medical underwriting or limited plan availability.
Your Medicare Coverage Options
When you first enroll in Medicare and during certain enrollment periods each year, you can choose how you receive your Medicare benefits. There are two primary paths.
Original Medicare
Original Medicare consists of:
Part A (Hospital Insurance)
Part B (Medical Insurance)
With Original Medicare:
You may enroll in a separate Part D plan for prescription drug coverage
You can see any doctor or use any hospital in the U.S. that accepts Medicare
You may purchase Medigap coverage to help manage out-of-pocket costs, such as the standard 20 percent coinsurance under Part B
Medicare Advantage (Part C)
Medicare Advantage plans are offered by private insurance companies approved by Medicare and provide an alternative way to receive Medicare coverage.
Key characteristics often include:
Bundled coverage that includes Part A, Part B, and usually Part D
Provider networks that may limit which doctors and hospitals you can use
Cost-sharing structures that differ from Original Medicare and Medigap
Potential additional premiums beyond the standard Part B premium
Possible extra benefits not included in Original Medicare
Coverage details, costs, and provider access can vary significantly from plan to plan.
Medicare vs. Medicaid: What’s the Difference?
Although the names are similar, Medicare and Medicaid serve very different purposes.
Medicare is a federal health insurance program primarily based on age or disability status
Medicaid is a joint federal and state program that provides health coverage for individuals and families with limited income and resources
Medicaid may help cover services such as nursing facility care, home health services, and assistance with Medicare premiums and cost-sharing.
Some individuals qualify for both programs at the same time. In those cases, Medicaid may help offset certain Medicare-related costs.
Blog Disclaimer :This article is provided for general informational and educational purposes only and is not intended to provide investment, tax, legal, insurance, or other professional advice. Nothing contained in this article should be relied upon as a substitute for personalized advice. The information presented may not be applicable to every individual situation and should not be used as the sole basis for making financial or other decisions. Laws, regulations, and interpretations are subject to change, and individual circumstances vary. Readers should consult with qualified professionals regarding their specific situation before taking any action based on the content of this article.
