Learn the 4 Parts of Medicare in Under 4 Minutes
Understanding your healthcare options as you approach 65 is necessary, but let’s face it: Medicare is confusing. You’ve got enough sales mail from local agents to keep a campfire going indefinitely, but none of it seems to make anything any clearer. You’ve likely tried to do some research only to find that Medicare has more letters than your high school algebra class.
That is why I am going to explain four of those letters today: Medicare Parts A, B, C, and D. My goal is that you get to the end with some of the Medicare fog lifted.
Part A (Inpatient Care)
Part A is hospital insurance. In other words, it is coverage for care received while officially admitted to a hospital. Beyond that simple definition, Part A also covers skilled nursing facility care, hospice, and home health care. Luckily, Part A is free as long as you’ve paid into Social Security for at least 10 years. Except for extremely specific circumstances, everyone should sign up for Part A when they turn 65.
Part B (Outpatient Care, A.K.A Medical Insurance)
Part B is exactly the opposite, covering care received while checked out of a hospital. This includes diagnostic tests, x-rays, outpatient surgeries, and lab tests. It also covers a host of preventive services in full to help you maintain good health as well as catch any major health problems while they are easier to treat and manage. Part B costs $144.60 a month in 2020. Most people should sign up when they turn 65, but if you plan on continuing working, it might be cost-effective to delay Part B.
Part C (Medicare Advantage)
This is where things get a little messy. Although Part C is a Medicare associated program, it actually replaces Medicare as the primary payer of your claims. As opposed to being offered by Medicare, it is offered by private insurance companies who have contracted with Medicare. Medicare Advantage Plans cover everything that Parts A and B cover; in fact, they usually throw in extra benefits such as an out-of-pocket spending limit and prescription drug coverage. However, you can’t purchase a Medicare Supplement with an Advantage Plan, which is often used to fill in the more costly coverage gaps Medicare leaves wide open. You must be enrolled in Parts A and B before you can enroll in Part C.
Part D (Prescription Drug Plan)
If you choose to get an Advantage Plan, prescription drug coverage is likely included. But for everyone else, you must purchase prescription drug coverage under Part D of Medicare. The cost of Part D is difficult to estimate because it varies based on the company you choose and the medications you take. But—to give you an idea—the average price is around $32.74 per month in 2020.
Well, there you have it! Check the timer. Has it been less than four minutes? And—more importantly—check your understanding. Do you feel a little less foggy about the four parts of Medicare?
Still Have Questions?
If you answered yes to both questions, we did our job. And if you still have questions (as I’m sure you do), sign up for our free Medicare workshop! Our workshops are not a long-winded sales pitch. Instead, we seek to educate you about your options so you can make the best choices and avoid costly mistakes and penalties. To sign up, call our office at 937-492-8800 or sign up online here: workshop signup.
About the Author
Ready to retire and unsure what to do next? Get our "Introduction to Medicare” eBook to start to make sense of Medicare and your options.