Medicare shouldn’t be complicated, but it kinda is!
It is important to understand Medicare plan choices and to pick coverage carefully. This can impact your loved one's out-of-pocket costs and where they can get their care.
Four parts: A, B, C, & D
Medicare Part A. This is the inpatient services and hospital fees benefit. It covers hospitalizations and the services provided while in the hospital. Hospital room and meals, nursing and physician care, supplies and medications, therapies, and diagnostic tests. Anything needed within the hospital for safe discharge. This benefit is free (no monthly premium) for those age 65 and older who have worked at least 40 taxed quarters in their lifetime (10 years). For those who do not meet this criteria, a monthly premium applies.
Medicare Part B. This is the outpatient services and medical care benefit. It covers services and therapies provided outside the hospital and medical care in the home, including some medications (those that are not self-administered). Everyone pays a monthly premium for Part B, which is currently $164.90, with a $226.00 annual deductible (2023 rates). Someone can opt out of Part B if they have credible medical insurance elsewhere, such as a commercial provider offered through a pension plan, though most do not choose to do this. Opting out is usually a matter of cost (savings) and not coverage.
Medicare Part C. This is another term for Medicare Advantage or "MA" plans. These are health insurance plans offered by private companies that have been approved by Medicare. There are hundreds, if not thousands, of MA plans available throughout the U.S. - meaning there are probably a dozen available in your loved one's area. In order to elect Part C, your loved one must first have Parts A & B. Once someone is part of an MA plan, premiums are paid directly to the insurance provider and not to Medicare. It is required that Part C plans offer the same benefits as Original Medicare Parts A & B, though Part C plans may charge higher premiums or copays/coinsurances for those benefits. With Part C, your loved one is not eligible for Medicare Supplement. See additional content: Original Medicare vs. Medicare Advantage Plans.
Medicare Part D. This is the prescription drug plan (PDP) benefit. It covers medications prescribed by a provider and dispensed through a pharmacy or pharmacy service (mail order). There are many Medicare Part D plans to choose from, so it's important to find the one that works best for your loved one. Be sure to check the plan's formulary, or list of approved drugs, as well as the pharmacy network. Medicare.gov has a simple tool to compare Part D plans. There is a monthly premium for Part D plans unless it is included with an MA plan (Part C), and they vary per location, deductible, and formulary (list of approved drugs). The national average is currently $32.74 per month (2023) plus a deductible. Note that with most MA plans, your loved one cannot choose their Part D plan - they must use the one provided.
Medicare Supplement ("Medigap")
This comprises ten letter plans, Plan A through Plan N (not all letters are represented). These are commonly called "Medigap" plans and cover part or all of the remaining 20% of healthcare costs that Original Medicare Parts A & B do not cover (they cover 80% of costs). There are monthly premiums for these plans and they vary by plan. A supplement is not available for those enrolled in Part C (Medicare Advantage plans). Note that Plan F is not available for anyone born after January 1, 1955. See additional content: Medicare: Supplement or "Medigap" Plans Explained.
