Medicare is both straightforward and complex in the health care coverage it provides.
It’s straightforward in the sense that the federal health insurance program, created in 1965 alongside Medicaid, is designed for American citizens over the age of 65 (but also includes people with specific conditions, such as those with disabilities). Turn 65, and you can receive full Medicare benefits. Easy, right?
Medicare becomes a bit more complicated when you look inside the packaging, only to find a bewildering set of programs that you may or may not qualify for. There are four key parts to Medicare: Parts A, B, C and D. Understanding each Medicare component will help you determine the best coverage for your needs—while saving you money in the long run.
The Four Parts of Medicare
Medicare Part A: Hospital
Medicare Part A can be considered hospital insurance. It’s the most common and well-known component of Medicare. Assuming you’ve paid 10 years into the Medicare system, you and your partner will be able to enjoy the benefits of Part A at no additional cost.
Part A covers hospital services such as hospice care, nursing home care, home health services and inpatient hospital stays. Part A also includes coverage for lab tests, surgeries, walkers, and wheelchairs.
Medicare Part B: Medical
Medicare Part B is often treated as an extension of Part A, and can be considered health insurance. It includes coverage for medical procedures and services. Whereas Part A provides minimum protection for emergency hospital visits and operations, Part B is more thorough in the insurance it provides, with a focus on preventative care.
Preventative care, doctor visits, and outpatient services fall under Part B. Other expenses, such as ambulances, mental health services, and certain prescription drugs may be covered as well.
Medicare Part C: Medicare Advantage Plan
Medicare Part C covers many of the components that Part A and Part B do not cover. It often goes by the title Medicare Advantage. Health care services such as dental and eye care, hearing aid services, and long-term care may be covered by Part C, depending on the plan.
That’s where Part C is different: Rather than being facilitated by the Federal Medicare program, Part C is bought from private companies that specifically provide benefits from both Parts A and B, as well as coverage that’s unique to either one.
Medicare Part D: Prescription Drugs
Medicare Part D covers prescription drugs—a huge piece of the health insurance puzzle that isn’t covered extensively by Parts A, B and C. Similar to Part C, Part D is offered by private companies.
Which Medicare Option is Right for You?
Medicare, with all of its options, may seem confusing. But in fact, each part fits into a larger picture of the coverage you’ll require upon retirement. Deciding which part is right for you is a conversation worth having—and planning for—in advance.
Questions about the different parts of Medicare? Let us know.