Parts of Medicare Explained

It’s important to take the time to understand the different parts of Medicare. Those who do will be in a better position to maximize Medicare benefits.

Below, we briefly explain the different parts of Medicare.

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different parts of medicare explained

The Four Different Parts of Medicare Explained

Original Medicare is composed of Part A and Part B.   

Medicare Part A

Medicare Part A – Hospital Insurance. 

This first part of Medicare covers all your in-patient care services. Medicare Part A would cover your room and board if you were to need intensive or specialized care.  

Here’s an overview of what’s included:

  • Inpatient care in a hospital
  • Skilled nursing facility care
  • Inpatient care in a skilled nursing facility (not custodial or long-term care)
  • Hospice care

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Medicare parts explained

Medicare Part B

Medicare Part B – Doctors Insurance.

This second part of Medicare provides coverage for office visits, lab testing, preventative services, simple surgeries, ambulance rides, dialysis, chemotherapy, and other like services.

Medicare part B covers all your outpatient care services. 

Here’s an overview of what’s included:

  • Medically necessary outpatient services 
  • Preventive services

If you have a specific service, test, or item covered, you can check with your doctor, health care provider, or search medicare coverage on medicare.gov.  

Premiums for Medicare part B get adjusted every year.  In 2020 they standard premium will be $144.60.

Part B  also has a coinsurance of 20%.  Meaning Medicare only covers 80% of you out-patient care services.  

There is no out of pocket maximum for your coinsurance responsibility. Many people choose to cover this financial gap with Medigap or Medicare Supplemental Insurance policy. 

Medicare Part C

Medicare Part C – Medicare Advantage

The third part of Medicare is also known as Medicare Advantage.   

Medicare Advantage provides an all in one solution to your health care needs by expanding your Medicare benefits. These bundled insurance plans fill the financial gaps of Medicare and also expand your coverage.  

Here’s an overview of what Part C plans cover:

  • All of your Original Medicare benefits plus:
  • Dental 
  • Vision
  • Prescription drugs 

Medicare Advantage plans are private health insurance plans that compliments your Original Medicare. Those who enroll will pay a single monthly premium for comprehensive health insurance coverage.

We strongly recommend that individuals in poor health consider Medicare Advantage. The right plan can save you thousands of dollars a year in medical expenses. 

Medicare Part D  

Medicare Part D – Prescription Drug Plans

The fourth and final part of Medicare provides prescription drug coverage that Original Medicare fails to include.  To avoid paying the outrageous out of pocket costs for your prescriptions, you’ll need to enroll in a Medicare Part D plan. 

Part D allows you to enroll in a private insurance plan that gives your access to all categories of prescription drugs for a small monthly deductible. The vast majority of Medicare beneficiaries choose to enroll in Medicare Part D.  Another way to get prescription drug coverage is through Medicare Advantage. 

Cost Of The Different Parts Of Medicare

For most Americans, your Original Medicare benefits (part A & part B) premiums are free. Throughout your working career, you pay for your Medicare benefits through a Medicare tax taken automatically from your paychecks. As long as you have worked at least 40 quarters (10 years) paying these taxes, you are fully eligible and your Original Medicare premiums are free. 

Learn more about Medicare eligibility here. 

Medicare Part C and Medicare Part D are private insurance policies and will have an additional premium. The overall cost of these optional parts of Medicare varies between states and the benefits included. To find your best policy, you’re going to have to do some shopping.

Our Medicare experts are here to help you do just that. We help you maximize your benefits and find the lowest cost policy available.  

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Our independent agency helps you customize your Medicare benefits to protect both your health and your finances.  

Our services are free. And there’s never any obligation when speaking with an agent. We’re here to help you the entire way through. 

We’ve helped thousands of clients understand the different parts of Medicare and customize their benefits.  See what we can do for you. 

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understanding the 4 parts of medicare

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