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Maybe you’ve heard some information about Medicare Parts from friends & family but what exactly are Medicare Parts anyway? How does each Part fit within Medicare Insurance benefits? We consolidated & simplified all the important details for you by answering common questions to help save you time, money & energy!
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Parts A & B = Original Medicare
Part A & B combined is known as Original Medicare which is run by the Federal Government not private insurance corporations. Although the parts are separated, they work as a package deal and cover approx. 80% of senior health care costs. Let’s review each part’s feature benefits.
Medicare Part A
Medicare Part A is Hospital Insurance (HI) that covers both in-hospital & similar hospital benefits. The availability is automatic upon turning 65 after applying for Social Security benefits. If a recipient earned the full 40 credits (minimum 10 years work) and paid FICA taxes, this coverage is free, also called Premium-free Part A. Otherwise, if only partial credit was given, a monthly premium incurs covered by the Social Security income & if late enrollment happens Part A will incur a increasing penalty.
Medicare Part A Eligibility Requirements;
- Must be 65 years or older
- Those on Social Social Security disability benefits (regardless of age) for at least 24 months
- Those diagnosed with permanent kidney failure (regardless of age)
Medicare Part A Coverage includes;
- Inpatient hospital care
- Skilled nursing facility (SNF) care
- Hospice Care
- Home health care
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Medicare Part B
Medicare Part B is Medical Insurance (MI) and covers costs associated with Physician services, physical & occupational therapy, diagnostic tests, and medical supplies. Everyone pays a monthly premium for Part B, plus the annual deductible.
Medicare Part B Eligibility Requirements;
- Must be age 65 or older;
- Must be a U.S. resident; AND
- Must be either a U.S. citizen, OR
- Must be an alien who has been admitted for permanent residence and thus living in the U.S. for five (5) continuous years prior to the month of filing an app for Medicare.
Medicare Part B Coverage includes;
- Physician services
- Home health care and Hospice Care (if not covered by Part A)
- Outpatient medical services and supplies
Part C = Medicare Advantage
Part C is also called Medicare Advantage (MA) which is an entirely separate program from Original Medicare. Recall, Original Medicare is run by the Federal Government whereas Medicare Advantage is run by private insurance corporations. You cannot be enrolled in both programs at the same time and you may not have an option to switch. Let’s review it.
Medicare Part C, also called Medicare Advantage (MA) is a private insurance health plan backed by Medicare. An individual can forego Original Medicare but will still pay a monthly Part B premium to Medicare plus, they pay the monthly premium, deductibles and copayments to the MA plan. The plan is all encompassing and works like an HMO, PPO plan while offering additional benefits such as Part D drug coverage, dental, vision, hearing & preventive health services.
Medicare Part C Eligibility Requirements;
- Must be enrolled in Medicare Part A and Part B.
- You don’t have End-Stage Renal Disease (ESRD).
Medicare Part C Coverage includes;
- Expenses found in Part A and B
- Medicare managed care plans (HMOs and PPOs)
- Medicare private fee-for-service plans (PFFS)
- Medicare specialty plans
Part D = Prescription Drug Coverage
Part D is pretty self explanitory however, there are two types; 1) Prescription Drug Plan (PDP) is a stand-alone plan that is purchased seperatly with Orignal Medicare only. 2) PDP-MA is a Medicare Adavantage Prescription Drug Plan that is covered under Medicare Advanatge only.
Prescription Drug Coverage
Enacted in 2003, due to the rising cost of drug prices, legislation was passed to curb this problem with, The Medicare Prescription Drug and Modernization Act. Medicare Part D is a prescription drug plan provided by Medicare-approved private insurance companies. Enrollees normally pay a monthly premium & annual deductibles. Part D plans under Original Medicare are considered “stand-alone plans” (PDP’s) and are not the same Medicare Advantage Part D plans (MA-PD’s). Each plan must include a list of drugs, known as a “Formulary” which must include at least two (2) drugs in each treatment category, and is not required to include all drugs. Drug costs are based on ‘tier,’ or treatment category.
Medicare Part D Eligibility Requirements;
- Enrolled in Medicare Part A & B
Medicare Part D Coverage includes;
- Prescription drugs.
Medicare Supplement Insurance
Since Original Medicare covers 80% of the bills, a Medicare Supplement will help cover the 20% remaining “gap” that why they are also called Medigap Plans (don’t confuse Plans with Parts). Medigap Plans are ALSO categorized by Letters, called “Letter Plans” (ex: Plan N, Plan F, Plan G).
Medicare Supplement Insurance also known as “Medigap insurance”, is a stand-alone, private insurance plan but acts as an alternative to Part C (Medicare Advantage). Medigap Plans works with Original Medicare (parts A & B) only. Medigap plans cover the 20% cost leftover by Original Medicare for deductibles, coinsurance & copays to name a few. Enrollees who purchase this coverage usually have a stand-alone, Part D Drug Plan (PDP) too.
Medigap Eligibility Requirements;
- Enrolled in Medicare Part A & B
- Cannot be enrolled in Medicare Advantage (MA) Plans.
Medigap Coverage includes;
- 20% cost gap left over by Medicare Parts A & B
- Coinsurance, Copays & Deductibles.
- Skilled Nursing Facilities.
- Excess charges
What are the Medicare Parts?
Medicare Parts consist of 4 Letter Parts which are; Part A, Part B, Part C & Part D. To avoid confusion, do not confuse “Parts” with “Plans” when learning about Medicare Insurance. Bridge can help you Get a Quote.
How do Medicare Parts work together?
Medicare Parts work together is confusing manner because of naming conventions. We explain this from a “Complete Health Plan Perspective”. Learn More.
How do I compare Medicare Parts?
When comparing Medicare Parts it’s important to understand how they work together from a “Complete Health Plan Perspective”. Bridge can help you Get a Quote.
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How is Medicare paid for?
Every employed or self-employed American pays for Medicare in the form of payroll taxes called the Federal Insurance Contributions Act (FICA). FICA Infographic.
At first glance, Medicare Parts appear simple to understand. After all, it’s just 4 Letters but as we have discovered, that is far from the truth! How is it that two simple paths can lead to such a complex web of health insurance jargon? How do we fit into this complexity? You don’t want to miss the next section as we redefine the traditional model and discover a new perspective. Find the clarity and confidence you need to make important health insurance decisions for your future with Bridge.
- FL225 – Health & life (including annuities & variable contracts) Study Manual Florida 32nd Edition – 2017
- offical social security
- US Medicare Wiki
- Medicare Wiki
- Medigap Wiki
- Medicare Advanatage Wiki
- CMS Wiki
- medicare interactive
Medicare can be complex and confusing but we have good news! Bridge did all the research for you, so you don’t have to! If you just started following along with us, you can visit The Medicare Journey trailhead to see the roadmap. You can go the previous chapter on Medicare Insurance, or jump to the Next Page!