Medicare is the national healthcare system for people 65 and older and some people with disabilities. It is divided into four parts: Parts A, B, C, and D.
Medicare Part A
Medicare Part A covers inpatient and hospital care. Most people will be enrolled in premium-free Part A automatically once they turn 65. You may have to pay a premium for Part A if you have fewer than 40 quarters or work credits, or about 10 years of work history in which you paid Medicare taxes through payroll. Part A may also cover home health care, skilled nursing facility care, and hospice care.
Medicare Part B
Medicare Part B covers outpatient and medical care, like routine doctor visits and preventative services. Part B also covers lab tests and x-rays, emergency ambulance services, mental health services, and getting a second opinion before surgery. You will be automatically enrolled in Part B if you already receive Social Security benefits. If you do not receive Social Security, you will need to enroll in Part B when you become eligible. The standard Part B premium for 2020 is $144.60; however, you may pay more depending on your level of income. Original Medicare consists of Part A and Part B.
Medicare Part C
Medicare Part C, also known as Medicare Advantage, is an alternative to Original Medicare offered through private insurance companies that are approved and regulated by Medicare. In addition to covering Part A and Part B, some Medicare Advantage plans cover things like dental, hearing, vision care, and prescription drug coverage as well. Plans vary by state, county, and insurer, so it’s important to do research and find the plan that’s right for you.
Medicare Part D
Medicare Part D covers prescription drugs. Like Medicare Advantage, Part D is sold through private insurance companies approved and regulated by Medicare. If you don’t have prescription drug coverage through Medicare Advantage, you will need a stand-alone Part D plan. If you don’t enroll in Part D coverage when you are first eligible, you could be penalized with a late enrollment fee that you will have to pay along with your monthly deductible. This late enrollment penalty will stay with you the entire time you have Part D coverage, so it’s crucial to enroll on time.
If you’re worried about how you’ll pay for some of the out-of-pocket costs not covered by Original Medicare, Medigap may be right for you. A Medigap plan can help pay for things like premiums, deductibles, copays, and coinsurance. This is a good option for people who have chronic illnesses with recurring doctor visits. However, you cannot have Medigap and Medicare Advantage at the same time. Medigap will incur an additional premium on top of your Original Medicare premium.