It’s common for people to become confused about all the different parts and plans associated with Medicare. Some people may not even know four main parts make up the Medicare program. However, knowing these different parts is essential to understanding your health coverage and avoiding potential mistakes. Let’s have a closer look at each part.
Medicare Part A
First up is Medicare Part A which is provided by the federal government. Part A covers your inpatient hospital care anywhere in the country as long as the facility or physician accepts Medicare. Generally, it helps cover your room and board, including a semi-private room, meals, nursing care, and more. In addition to covering inpatient stays, Part A also covers skilled-nursing facility stays as well as hospice and home health care.
Medicare Part A Costs
Most people pay $0 each month for Part A because they have enough work quarters in the U.S. and have paid taxes towards the Medicare program. People can qualify for premium-free Part A through their spouse as well.
However, if you do not meet the requirements for premium-free Part A, you will need to pay a monthly premium. The amount you will pay depends on how many work quarters you have.
If you have less than 40 work quarters but at least 30, you will pay $278 each month. If you have less than 30 work quarters, you will pay $506 every month. These numbers are for 2023 and will likely change in 2024. If you have to pay for Medicare Part A and fail to enroll when you’re first eligible and you don’t have creditable coverage, you’ll have a late enrollment penalty.
In addition to the premium, there is cost-sharing for Part A, including a deductible, copayments, and coinsurance. You can join a Medicare Supplement (Medigap) plan to help cover these costs and can learn more about these plans at boomerbenefits
Medicare Part B
Outpatient care falls under Medicare Part B which is also provided by the federal government. This includes various services like doctor’s visits, surgeries, lab work, preventative care, and more. One of the important things to note about Part B is that it only covers 80% of the Medicare-approved services you receive. The leftover 20% is for you to pay and there is no limit or cap on your costs. That 20% coinsurance for approved services can add up quickly. However, you do have options. Medicare Supplement plans were designed to pay those costs for you and in return, you’ll pay a monthly premium for the plan. These plans help give you predictable costs during the year.
Medicare Part B Costs
Almost everyone pays a monthly fee for Part B. In 2023, the standard premium is $164.90. Just know that if your earnings from two years before are above a certain amount, you will have an additional charge to your B premium. This is known as an Income-Related Monthly Adjustment Amount (IRMAA) charge. You can submit an appeal for this to Social Security for reconsideration if you have a qualifying life-event such as work stoppage, work reduction, marriage, or divorce.
Part B also has other cost-sharing expenses, including an annual deductible of $226 in 2023, copayments, coinsurance, and excess charges. However, those kinds of costs are ones that a Supplement plan can help cover for you.
Medicare Part C
Medicare Part C is another name for the Medicare Advantage plan program. Advantage plans are a different way to receive your Medicare benefits through a private insurance carrier instead of the federal government.
In other words, these plans essentially combine all your Medicare insurance needs into one plan, including Part A, B, and typically, prescription drug coverage benefits. They also tend to offer additional benefits that Medicare does not provide, including dental, vision, and hearing benefits. These added benefits are becoming more and more attractive and common.
However, these plans are not a good fit for everyone and work differently than regular Medicare and Medigap plans. For example, Advantage plans are network plans which means you’ll want to see providers that are in your plan’s network. Be sure to research these plans carefully before enrolling, as it may be difficult to change plans later.
Medicare Part C Costs
Each Advantage plan has a monthly premium that varies from plan to plan. One plus about Advantage plans is that many have a $0 premium.
However, in exchange for a $0 premium, you would have more out-of-pocket costs for medical services as you go. This means most of your services will have a set copay or coinsurance that you must pay. Those costs go toward your maximum out-of-pocket limit. The maximum out of pocket limit will vary with each plan, but that maximum amount can be as high as $8,300 in 2023. Once you reach your plan’s limit, the plan will cover your costs at 100%.
If you visit the doctor frequently, these plans may not be cost-effective. You can refer to a plan’s Summary of Benefits for more specific information on what you will pay for certain services.
Medicare Part D
The fourth part of Medicare is Part D, sold by private insurance carriers. Part D covers the retail prescription medications that you receive from pharmacies.
If you have Original Medicare and a Medigap plan, you may want to join a Part D plan to have medication coverage. If you have an Advantage plan, that plan probably has built-in Part D coverage.
Medicare Part D Costs
Each Part D plan has a monthly premium based on different factors. Part D plan premiums are also subject to IRMAA charges like Part B.
Another thing to know about Part D plans is that they each cover different medications at different costs. So, you’ll want to ensure that your Part D coverage covers your specific prescriptions.
The Medicare program consists of four parts, including Part A, B, C, and D. Each provides health benefits differently. Understanding how these parts work and interact with each other is essential to your Medicare journey.