What are the 4 parts of Medicare?

Compare parts of Medicare | Types of Medicare | Original Medicare vs. Medicare Advantage | Medigap | How to enroll

Medicare is a government-funded healthcare plan for most individuals 65 years of age and older. It’s also available for younger individuals who have certain disabilities or End-Stage Renal Disease or ALS (Lou Gehrig’s disease). While those who aren’t familiar with Medicare often consider it to be “all under one umbrella,” there are four different parts of Medicare, including Medicare Part A, Medicare Part B, Medicare Advantage (or Medicare Part C), and Medicare Part D. Each part of Medicare covers different types of health services.

Types of Medicare

Medicare Part A

There are five main areas Medicare Part A covers:

• Inpatient hospital care 
• Skilled nursing facility care
• Nursing home care
• Hospice care
• Home health care

Most Medicare beneficiaries with Part A will have a $0 premium, but depending on your or your spouse’s work history, you may pay up to $505 per month. In 2024, the hospital deductible for Medicare Part A is $1,632 per benefit period. 

With Original Medicare Part A, the coinsurance for your first 60 days in the hospital or skilled nursing facility will be $0. Between days 61 and 90, you’ll pay a coinsurance of $408. After 91 days and beyond, you’ll have a coinsurance of $816 per day for up to 60 lifetime reserve dates unless you have supplemental coverage such as a Medigap.

You may need Part A if you are planning to have any major surgeries or have been previously hospitalized. However, since most people have premium-free Medicare Part A, it’s smart to sign up if you’re eligible for Medicare if you are not automatically enrolled. Late enrollment penalties apply if you are not automatically enrolled and do not sign up for Part A when you are first eligible for Medicare.

Medicare Part B

Medicare Part B is medical insurance that covers medically necessary doctor services, outpatient care, preventive services, and medical supplies. Typical services that Medicare Part B covers include:

• Ambulance services
• Bone mass (bone density) measurement
• Cardiac rehabilitation
• Cardiovascular screenings
• Clinical laboratory services
• Cancer screenings
• Diabetes screenings, self-management training, and supplies
• Doctor services
• Durable medical equipment (like a foot brace)
• EKG screening
• COVID, flu, hepatitis B, and pneumococcal shots
• Home health services
• Kidney dialysis services and supplies
• Mammograms 
• Mental health care (outpatient)
• Occupational, physical, and speech therapy
• Pap tests and pelvic exams 
• Prosthetic and orthotic Items
• Pulmonary rehabilitation

In 2024, most individuals will pay a Medicare Part B premium of $174.70 per month. However, depending on your income, you could pay as much as $594 per month. The deductible for 2024 is $240. Once you meet this deductible, you’ll pay 20% for most Medicare-approved services.

You may need Part B if you currently do not have any medical insurance when you are Medicare-eligible. Many people enroll in Medicare Part B upon becoming eligible, but you may consider delaying enrollment if you have a health insurance plan through your employer or spouse’s employer. However, late enrollment penalties apply if you do not sign up for Part B when you are first eligible for Medicare.

RELATED: Does Medicare Part B cover prescriptions?

Medicare Advantage (Part C)

There are many types of Medicare Advantage plans, also called Medicare Part C or MA plans, which are health insurance plans that offer Medicare benefits from a private health insurer and must follow rules and regulations that are set by Medicare. When consumers enroll in Medicare Advantage, they are opting to receive their Medicare coverage through a private plan instead of fee-for-service Original Medicare.

Typically, Medicare Advantage plans cover:

• All Part A and Part B benefits, including some approved hospice services and excluding clinical trials.
• Other potential benefits may include wellness programs, vision and hearing services, dental services, and transportation to and from medical appointments.
• Part D benefits

The costs of Medicare Advantage plans will vary across insurance providers and their offerings. Some Medicare Advantage plans may have a $0 premium, but the estimated average premium across all plans is $18.50 per month. Copays, coinsurance, and deductibles also vary by plan. If your plan includes Part D benefits, the donut hole will also apply to you. To compare plans, visit medicare.gov to see the list of plans available.

You may need Medicare Advantage if you want or require benefits not included in Original Medicare, such as transportation or dental services. However, you may need to follow more specific rules with Part C plans, such as using an in-network healthcare provider or getting a referral for specialists when you have health maintenance organization (HMO) and preferred provider organization (PPO) plans.

Medicare Part D

Medicare prescription drug coverage is optional through Part D. It is not part of Original Medicare coverage. You can either enroll in a stand-alone prescription drug plan or include it as part of your Medicare Advantage plan. The costs of these plans will vary depending on which plan you choose, but The Centers for Medicare and Medicaid Services (CMS) estimates the national base monthly premium cost for 2024 is $34.70. You may also qualify for the Medicare Extra Help subsidy that will help cover some Part D costs.

Medicare Part D plans typically cover: 

• Prescription drugs
• Vaccines

You may need Part D if you take prescriptions regularly so you can reduce your prescription drug costs. Part D also covers several vaccines that Part B does not, such as the shingles shot. Part D is optional; however, late enrollment penalties apply if you do not sign up for Part D when you are first eligible for Medicare and you do not have creditable drug coverage.

Original Medicare vs. Medicare Advantage

It’s important to note that there is a difference between Original Medicare (Part A and Part B), sometimes called Traditional Medicare, and Medicare Advantage plans.

Medicare Advantage is an alternative to Original Medicare—people can’t enroll in both. It’s provided by private insurance companies. Another perk of Medicare Advantage plans is that they usually cover extra benefits that Original Medicare does not cover, such as dental, vision, and hearing.

Original Medicare is made up of Medicare Parts A and B. If you’d like your prescription drugs to be covered, you can also sign up for a stand-alone Medicare Part D drug plan. Since you’ll have out-of-pocket costs with Medicare, such as the 20% coinsurance, you can also obtain supplemental coverage insurance. 

One benefit of Original Medicare is that it can be used anywhere within the United States. That’s not necessarily the case with Medicare Advantage, as many of these plans can only be used with in-network healthcare providers. 

Out-of-pocket costs vary between Original Medicare vs. Medicare Advantage. In some instances, you’ll save more money with Original Medicare, and in some instances, Medicare Advantage will be cheaper.

What are Medigap plans?

Medigap plans, also called Medicare supplement insurance, help cover costs not paid for by Medicare. Medigaps are provided by private companies and help pay for things like copayments, coinsurance, and deductibles. This is especially helpful to cover lengthy hospitalizations and skilled nursing rehab stays. Medigaps also may offer limited additional services not covered by Original Medicare.

How to enroll

If you’d like to sign up for Medicare health plans, visit ssa.gov to see if you were automatically enrolled upon turning 65. You can find the right Medicare plan for you by comparing types of Medicare plans, prices, and coverage options with the help of Medicare’s comparison tool. Mark the Medicare Open Enrollment Period, Oct. 15 to Dec. 7 each year, on your calendar to avoid a late enrollment penalty. 

Sources

• Medicare enrollment numbers, Center for Medicare Advocacy (2023)
• Costs, medicare.gov
• Avoid late enrollment penalties, medicare.gov
• How hospice works, medicare.gov
• Explore your Medicare coverage options, medicare.gov
• Plan for Medicare, U.S. Social Security Administration

Lea este artículo en español aquí.