As widely used as Medicare is, you’d think they would have made it a little less complicated by now. With 4 different types of Medicare to know and understand, it’s no wonder that so many people make bad decisions when signing up.
This blog will provide a general overview of the 4 different parts of Medicare: Part A, Part B, Part C, and Part D. It will also answer some of the most frequently asked questions about the difference between Medicare plans, and how to know if you’re in the right one.
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The Different Types of Medicare: Key Takeaways
- There are 4 different types (or “Parts”) of Medicare: A, B, C, and D.
- Part A and Part B are known as “Original Medicare” and are automatic for most people turning 65.
- Part A is hospital insurance, covering things like surgeries, in-patient care, and prescribed skilled nursing care.
- Part B is for out-patient care, including doctor visits, medical equipment, health screenings, canter treatment, and more.
- Part C is also known as Medicare Advantage. Part C is privately-operated Medicare that can be more comprehensive than Original Medicare, and may have lower monthly premiums.
- Part D, sometimes called “PDP”, is prescription drug coverage. This is an optional plan that can make prescriptions more affordable, and is included with many Medicare Advantage plans.
Do I Need More than Just Original Medicare?
When most people turn 65, they will be enrolled in Original Medicare automatically. This includes Part A, which is hospital insurance, and Part B, which covers out-patient care.
But a lot of new Medicare enrollees don’t realize that Original Medicare has significant coverage gaps. People who are enrolled in only Part A and Part B are at a much higher risk of out-of-pocket costs, for everything from dental and vision care to the potential cost of long-term care.
These coverage gaps are the reason why a majority of Medicare enrollees choose to improve their coverage by enrolling in either Medicare Advantage (Part C), or an add-on Medigap plan. (We’ll look at the difference between these two options further down on this page.)
What do Each of the 4 Types of Medicare Cover?
Here’s a more detailed explanation of what is covered by each of the 4 types of Medicare:
Medicare Part A: Hospital Insurance
Medicare Part A covers medical costs related to hospitalization. This includes:
- Hospital stays up to 60 days (The enrollee must pay a portion after that)
- Hospital procedures
- Hospice care
- Limited skilled nursing and home healthcare
Medicare Part B: Outpatient Care
Medicare Part B covers a wider range of routine or everyday healthcare services. This includes:
- Doctor visits
- Health screenings
- Annual checkups and physicals
- Speech, occupational, and physical therapy
- Specialist visits
- ER visits and urgent care
- Emergency ambulance rides
- Some durable home medical equipment
Medicare Part C: Medicare Advantage / “Private” Medicare
More commonly known as Medicare Advantage, Part C is required to cover everything that is covered by Part A and Part B. In addition, Part C plans can include coverage for things not included with Original Medicare:
- All Part A and Part B services
- Routine dental and vision care
- Hearing exams and hearing aids
- Wellness benefits like gym memberships and health incentives
- Part D prescription drug coverage (Note: Some Medicare Advantage plans may not cover Part D)
Medicare Part D: Prescription Drug Coverage
Medicare Part D plans, or “PDP Plans”, cover the cost of prescription drugs. Part D plans are stand alone prescription plans that can be added to Part A and Part D coverage. Some Medicare Advantage plans also include Part D drug coverage.
What are the Costs for Each Part of Medicare?
Each part of Medicare has its own premiums, deductibles, and copayments to consider. For all 4 parts, the costs of Medicare change every year, so it’s important to check in with your plan regularly.
Part A Costs
|For most people, Part A does not have a monthly premium. But if you didn’t spend enough time in the workforce to earn enough Social Security work credits, you might have a premium.|
|2022 Part A premium:||
|2022 Part A deductible:||
|Hospital coinsurance for days 61-10:||
Part B Costs
|All Medicare enrollees have to pay the Part B premium, which is calculated based on your individual or joint tax return. Here’s how it breaks down:|
|2022 Part B premium:||
|2022 Part B deductible:||
Part C Costs
Because Part C Medicare Advantage plans are offered by private companies, the cost of these plans are not standardized. Some Part C plans can have a $0 premium, and other more comprehensive plans can be more expensive.
Medicare does set an out-of-pocket maximum for ALL Part C plans, which is $7,550 for in-network services, and up to $11,300 for out-of-network.
Part D Costs
|Just like Part C, Part D prescription drug plans will cost differently based on which plan you choose. There is a wide range of cost options for Part D plans, and low-income enrollees might be able to qualify for extra help paying for prescriptions.|
? Want more info on the costs of Medicare? Click here to read a more comprehensive breakdown of the costs of Medicare in 2022.
Frequently Asked Questions about the Different Parts of Medicare [FAQ]
Q: What are Social Security Work Credits?
A: A Social Security Work Credit, (or “Medicare Work Credit”) is defined as a 3-month period of time in which a person was paying into Medicare.
Q: How Many Credits do I Need to Get Free Medicare?
A: In order to qualify for a free ($0 premium) Part A plan, a person must earn at least 40 credits. This comes out to about 10 years of working, which is why most people qualify for $0 premium Part A.
Q: Do I Need All the Parts of Medicare?
A: No. Creating a Medicare strategy is about choosing which parts you need to combine to get the best deal and coverage. Most people are automatically enrolled in Parts A and B, or “Original Medicare”. But because Original Medicare has big coverage gaps, most people choose to either add a Part D plan, or switch to Part C and get all the coverage they need in one place.
Q: How do I Apply for Medicare Parts C and D?
A: All Medicare enrollees have an opportunity to either switch to Part C or add a Part D plan during their Initial Enrollment Period (IEP). This is a seven-month window that begins three months before your 65th birthday.
After the IEP, the only time to enroll in Part C or D is during the Annual Enrollment Period (October 15th-December 7th) or a Special Enrollment Period (SEP) under certain circumstances. (This blog has a more in-depth explanation of Medicare’s different enrollment periods).
Q: Where Can I Find a Medicare Parts Chart?
A: Our online guide, Medicare 101, includes a Medicare parts chart that can help you more clearly understand the different parts of Medicare.
Q: Should I switch to Medicare Advantage?
A: Medicare Advantage plans are popular because they a.) Put all your coverage into one convenient plan, and b.) Can have lower, or even $0 monthly premiums. But there is no Medicare Advantage plan that is perfect for everybody.
Some people also choose to add a Medigap plan to their Medicare instead of switching to Medicare Advantage.
Need Help with Your Medicare Coverage? Meet Your New Personal Benefits Manager
Understanding the 4 different types of Medicare is necessary if you’re going to craft an effective long-term healthcare strategy. But on the other hand, one Medicare plan isn’t likely to be a good fit for your whole life.
Mastering Medicare is about knowing when you need to change plans, add supplemental coverage, or ditch extra coverage that you’re not using. This is where your Personal Benefits Manager comes in. If you need help signing up for Medicare or switching plans, grab a no-cost consultation.
We’ll link you with a professional that can guide you through all the complications, helping you build a Medicare strategy around your specific needs and goals.
Still learning about Medicare? Subscribe to the MediGap Advisors’ Health and Wealth Newsletter for monthly tutorials about getting the most out of your Medicare plan.
Misty Berryman is one of your Personal Benefits Managers at Medigap Advisors. She loves working for Medigap Advisors for many reasons, including being part of the solution to one of life’s most important healthcare challenges: choosing the right Medicare plan. Read more about Misty on her Bio page.