Understanding Medicare: The ABCs (and D)
There are four parts of Medicare, each covering a different aspect of your health care. Original Medicare consists of Parts A and B and covers about 80% of the average person’s costs for covered medical expenses. You’re responsible to pay the rest.
Basic Coverage with Original Medicare offers you the following:
Helps cover inpatient hospital and nursing home care, home health care, skilled nursing facility care and hospice. You must be at least age 65, a U.S. citizen or permanent resident and you or your spouse must have paid into Social Security for at least 10 years. While Part A is free for most, you will have deductibles and coinsurance costs to cover.
Physician & Outpatient Services
Helps cover doctor visits, lab tests, outpatient services and outpatient surgery, and some medical supplies. Eligibility is the same as Part A. Medicare charges a monthly premium for Part B that you must continue to pay, and you will have deductibles and coinsurance costs to cover. A late enrollment penalty may apply if you choose to enroll after your Initial Enrollment Period.
Options beyond Original Medicare:
Medicare Advantage Plans
A Medicare Advantage plan is not the same thing as a Medicare Supplement plan. Advantage plans cover everything that Medicare Part A and Part B do, as well as the expenses that Part A and Part B don’t. Medicare Advantage plans often include extra benefits. For example, Advantage MD includes prescription drugs, vision, hearing, dental and fitness programs. These plans are offered by private insurance companies contracted by Medicare. To enroll, you must have Original Medicare (Parts A and B) and live within the plan’s service area.
Standalone Prescription Drug Plans
Helps cover some of your prescription drug costs. These plans are offered by private insurance companies who are contracted by Medicare — when you have Part D, you pay a second monthly premium in addition to Medicare. To enroll, you must be enrolled in Original Medicare and live within the plan’s service area. A late enrollment penalty may apply if you choose to enroll after your Initial Enrollment Period.