On the road of life, sometimes we need to stop and ask for directions. This is especially true with something as important and sometimes confusing as the parts of Medicare.
If you have reached or are approaching the age of Medicare eligibility, you may feel overwhelmed by all the information coming your way. Signing up for Medicare is a different process than you may be used to with your work or private insurance. It can be a lot to take in, and it is challenging to know what to do.
The Medicare Family wants to help. We have over 40 years of experience helping seniors to navigate Medicare. Here is a quick guide to the parts of Medicare. This overview will help you have a basic understanding of the parts of Medicare so you can be more confident as you research your choices.
A Quick Guide to Parts of Medicare
Medicare is a federal health insurance program that all US citizens aged 65 and older are eligible for. There are four parts to Medicare, and each part will have a different cost structure, coverage, and enrollment process. Here is your guide to the four parts of Medicare.
Medicare Part A
Part A is your hospital insurance. It will cover inpatient hospital care. Inpatient care is basically any care you receive at a hospital where you spend at least one night. Part A also covers skilled nursing and hospice care.
You automatically enroll in Medicare Part A when you turn 65 if you take social security. However, if you continue to work for a company with more than 20 employees, you do not have to take Medicare. You can continue using your employer-provided health insurance until you retire.
If you have worked for at least ten years, you will have already paid for Medicare Part A. During your working years, social security taxes have been taken out of your paycheck, or you will have paid social security tax separately if self-employed. Be sure to watch this video if you are concerned you may not have worked enough.
Medicare Part A has a per-benefit period deductible and co-pays after 60 days of care. These costs increase yearly.
Medicare Part B
Part B is your medical insurance. This covers all your non-hospital care, including outpatient medical services, preventative care, doctor visits, lab tests, home health services, and medical equipment. It also covers emergency room or urgent care visits and outpatient surgeries.
As with Part A, you will be automatically enrolled in Part B at 65 if you receive social security. If you have not already started taking social security, you will need to register. You can do so online or in person at the social security office. You can sign up beginning three months before your 65th birthday. If you are not retiring and work for a large company -more than 20 employees- you do not have to sign up for Medicare.
You can keep your employer-provided insurance. However, you will need to sign up for Part B 3 months before you want that coverage to begin. If you are self-employed or work for a small company, you will need to sign up for Medicare starting three months before turning 65, or you will be penalized.
Medicare Part B does charge a monthly premium. This premium historically increases yearly. For 2023, the premium begins at $164.90 per month. There is also an annual deductible of $226 for 2023. Medicare will cover 80% of medically necessary charges after the deductible is met. There is no cap on out-of-pocket expenses.
Medicare Part C
Part C is essentially private Medicare. It is still governed by the federal government but offered by private insurance companies. Part C, also known as Medicare Advantage, includes your Medicare Part A and B coverage. Plans will vary depending on what company you choose, but generally, they will have a drug plan built in. You may also receive coverage for services not covered by Parts A and B, such as dental, vision, hearing aids, nursing home care, and more.
You will not be automatically enrolled in a Medicare Part C plan. Depending on where you live, there may be over 20 different plans. It is essential to work with someone who can provide a practical guide to Medicare Advantage so you can decide what would be the best option for you. You can learn more about the types of Medicare Advantage Plans here.
Medicare Advantage plans typically have low monthly premiums. These premiums will be in addition to the Medicare Part B premium. Unlike Part B, Part C plans do have a limit on yearly out-of-pocket expenses. On average, these run about $6,000. Your premium and prescription co-pays do not count toward this limit. Deductibles and co-pays will vary depending on your provider.
Medicare Part D
Part D is your prescription drug coverage. There are two ways to get Part D coverage. If you have a Medicare Advantage plan, your prescription drug coverage is included. If you have original Medicare, Parts A and B, you will need to add a stand-alone Part D drug plan.
You can sign up for a Part D plan at the same time you sign up for original Medicare. After your initial enrollment period, you can sign up for a new Part D plan during the Annual Enrollment window, which runs from October 15-December 7. A new plan will become effective on January 1 of the following year. Even if you do not currently take any medications, it is a good idea to sign up for a Part D plan to avoid penalties in the future.
Part D plans range in price from $7 per month to over $100 per month. What type of coverage you need will depend on what prescriptions you take. Each plan will have different co-pays and different covered medications.
How to Get on the Right Road with Medicare
Medicare choices may seem overwhelming. This guide has given a brief overview of what is included in each of the four main parts of Medicare. You are now better equipped to understand when and how to sign up for coverage, what to expect to pay, and what coverage you will receive.