Don’t feel overwhelmed. Once you know what the different Parts of Medicare cover, you start to know which parts you need. Because Medicare in somewhat customizable, you can sign up for what you need. Here, we break down the different parts of Medicare and explain what they involve so that you can make an informed decision when you sign up for a Medicare plan.
Part A – Hospital Insurance
New Medicare applicants are automatically enrolled in Medicare Part A. This part covers emergency medical attention such as hospital stays up to 60 days. Part A also covers some end of life care, including hospice. It will also cover some post-hospital stay nursing care that you’ll need if the doctor prescribes you some. This might include rehabilitation or a stay in a nursing home.
You don’t normally pay a monthly premium for this part of Medicare. An example of a situation that would exempt you from having to pay a premium is if you were employed for a minimum of forty quarters while playing taxes. But, if you worked between thirty and forty quarters, you pay a premium. If you don’t know for sure, call your insurance agent.
Part B – Medical Insurance
While Part A covers the more extreme medical situations that may come up in your life, Part B covers your more routine medical needs and services outside of the hospital. This includes visits to your doctor, ordered lab testing, screenings, necessary durable medical equipment and other services.
Part A and Part B together are Original Medicare. Part B covers more costs than Part A. It even goes as far as covering services and equipment such as chemotherapy, mental health care and alcohol counseling. As long as a medical service is medically necessary or is preventative Part B will usually cover it.
You typically pay a deductible and 20% of the amount for each individual piece of equipment or service that you get.
Part C – Medicare Advantage Plans
Medicare Advantage is essentially a Medicare bundle provided through a private insurer. This bundle would include Part A, Part B and probably Part D. To sign up for this plan you will enroll in both Part A and Part B. You will also pay the monthly premium for Part B. Then you can choose and sign up for a Medicare Advantage plan with a private insurer of your choice.
Depending on the type of Medicare Advantage plan you choose, you may get a few additional benefits that are not covered with original Medicare such as:
- vision and dental care
- home wheelchair ramps
- transportation to and from visits to your physician
Most of the Medicare Advantage plans available today also include prescription drug coverage, but it’s important to note that not all do. If prescription drug coverage is a major concern to you, take the time to read the description of your plan carefully before committing to it.
Medicare Advantage plans are either health maintenance organizations (HMOs), or preferred provider organizations (PPOs).
The main difference between HMOs and PPOs is choice of physician. In health maintenance organizations, you’ll likely choose a single primary care physician who will take on the responsibility of directing your care and will give you needed referrals to specialists. In a preferred provider organization, you access a network of doctors that you would be able to see and a list of facilities to use. Most of the time with PPOs, you’ll be able to see a specialist even without a referral.
With Original Medicare (Parts A, B and D) you choose your own provider. With Medicare Advantage the network you join is predetermined. You may also be required to adhere to network restrictions.
Part D – Prescription Drug Coverage
You purchase this part of Medicare through a private insurer. It covers a portion of your prescription medication costs, but not all of them. You can expect to pay a premium and copays with a Part D plan. Most Medicare Advantage plans have prescription drug coverage included. If you signed up for a Medicare Advantage plan, then you do not need to sign up for Part D.
If you selected a plan that did not come with drug coverage like Medicare Medical Savings Account plans or certain private fee-for-service plans, then you can opt to sign up for a separate Medicare Prescription Drug Plan.
There is another thing to remember about signing up for a Medicare Part D plan. When you have a Medicare Advantage HMO plan or PPO plan and join a separate Part D Medicare Prescription Drug Plan you are disenrolled from your Medicare Advantage plan.