Your Guide to Medicare: Understanding Parts A to N

Medicare offers multiple parts and plans, each providing specific health care coverage options. This guide breaks down each part to help you find the best fit for your health care needs.

Key Takeaways

• Medicare is a federally administered health insurance program mainly for individuals aged 65 and older.
• It consists of multiple parts (A, B, C, D) that provide different health care coverages.
• Original Medicare (Parts A and B) may leave some coverage gaps, which can be filled by Medicare supplement plans A through N (Medigap).
• Medicare Advantage plans offer another option, typically reducing coverage gaps compared to Original Medicare but may include other tradeoffs.

Medicare Basics
Medicare, the U.S. government’s health insurance program for those aged 65 and older, as well as certain younger individuals with specific disabilities, is divided into four main parts:

• Part A: Covers inpatient care.
• Part B: Covers outpatient care.
• Part C (Medicare Advantage): A private insurance alternative to Original Medicare.
• Part D: Provides prescription drug coverage.

What Does Medicare Part A Cover?
Medicare Part A pays for a range of services, including:

• Hospice Care: End-of-life care focusing on comfort and quality of life.
• Hospital Stays: Covers inpatient hospital care.
• Skilled Nursing Facility Stays: Provides coverage for temporary skilled nursing care following a hospital stay.
• Short-term Home Health Care: Offers in-home medical care for a limited period.

Medicare Part A Costs
Most people do not pay a monthly premium for Medicare Part A. If you haven’t paid into Medicare taxes long enough, you may need to pay for Part A. For 2024, the premium is $505 per month, depending on how long you or your spouse contributed to Medicare taxes.

• Inpatient Hospital Deductible: $1,632 annually in 2024. This deductible must be met before Medicare starts covering hospital costs.
• Hospital Copayments:
  • Days 1-60: No copay.
  • Days 61-90: $408 per day.
  • After day 91: $816 per day (limited to 60 lifetime reserve days). Once these are used, you are responsible for all costs unless you have a Medigap plan.

Part A also has costs for skilled nursing facility care and hospice coinsurance. There’s no cost for qualifying home health care services.

What Does Medicare Part B Cover?
Medicare Part B covers a range of outpatient and preventive services:

• Ambulance Services: Emergency medical transportation by ground or air.
• Durable Medical Equipment: Items like canes, walkers, hospital beds, and wheelchairs.
• Doctor’s Visits: Covers outpatient services and certain hospital inpatient services.
• Diabetic Equipment: Includes insulin pumps used at home.
• Physical Therapy: Covered if certified as medically necessary.
• Preventive Services: Fully covers vaccines, screenings, and other preventive health services from Medicare-accepting providers.
• Mental Health Services: Includes outpatient and partial hospitalization. Inpatient mental health care falls under Part A and has a lifetime limit of 190 days.

Medicare Part B Costs

• Monthly Premium: $174.70 for most people in 2024. Those with higher incomes (above $103,000 for individuals, $206,000 for couples) may pay more.
• Annual Deductible: $240 in 2024.

If you delay Part B enrollment without having other health insurance, there is a penalty for each year you were eligible but did not enroll. This penalty is 10% of the standard premium for each 12-month period you were eligible, added to your monthly premium. This penalty only applies if you don’t have other insurance covering Part B’s services.

To buy a private Medigap policy (Medicare Supplement), you need to have both Parts A and B, which can help pay for deductibles and copays that Original Medicare does not cover.

What Does Medicare Part C Cover?
Medicare Part C, known as Medicare Advantage, includes Parts A and B, but is provided by private insurers. Many plans also include Part D (prescription drug coverage).

• Coverage: Medicare Advantage plans must cover the same services as Original Medicare and often include extras, such as vision, dental, and fitness memberships.
• Cost Structure: Like private health insurance, these plans have different monthly premiums, copays, provider networks, and out-of-pocket limits. Lower-premium plans may come with higher out-of-pocket costs or limited provider networks.

Note: Even with a Medicare Advantage plan, beneficiaries must pay the Part B premium ($174.70 for most people in 2024).

Pros and Cons of Medicare Advantage

• Pros:
  • Additional benefits like gym memberships, transportation, and coverage for hearing, dental, and vision care.
• Cons:
  • Limited provider networks, which may require prior authorizations for certain services.

The decision to enroll in a Medicare Advantage plan depends on factors such as doctor availability, preferred hospitals, and personal cost preferences. Since there are hundreds of plans varying by county, comparing options is important.

What Does Medicare Part D Cover?
Medicare Part D provides prescription drug coverage for individuals enrolled in Part A and/or Part B. Coverage includes prescription drugs, but specifics vary by plan.

• Monthly Premium: Average premium is about $35.
• Out-of-Pocket Costs: Depend on whether the drug is generic or brand-name, its “tier” within the plan’s formulary, and the chosen pharmacy.

Medicare Part D Coverage Factors

• Prescription drugs on the plan’s formulary (list of covered drugs) and their designated tier affect cost.
• Deductibles and network pharmacies also impact costs.

Medicare Supplement Plans A Through N (Medigap) Original Medicare can leave coverage gaps. Medicare Supplement, or Medigap, plans help fill those gaps. There are 10 plans available: A, B, C, D, F, G, K, L, M, and N. Plans like C and F are only available to those eligible for Medicare before January 1, 2020.

Popular Medigap Plans

• Plan F: Offers extensive coverage for deductibles, copays, excess charges, and foreign travel health care costs. Only available to people eligible for Medicare before January 1, 2020.
• Plan G: Similar to Plan F but does not cover the Part B deductible.

What Medicare Doesn’t Cover Medicare generally does not cover:

• Long-Term Care: Includes assisted living and long-term nursing home care.
• Extended Hospitalization: Long-term inpatient care.
• Spousal and Dependent Health Care: Medicare does not extend benefits to spouses or dependents.
• Cosmetic Surgery and Nonessential Foot Care: Excludes treatments not considered medically necessary.

Key Takeaways

• Medicare Part A covers inpatient care, while Part B covers outpatient services. Together, they form Original Medicare.
• Medicare Part C (Advantage) plans offer an alternative to Original Medicare, often with additional benefits.
• Medicare Part D provides prescription drug coverage, available to those enrolled in Part A or B.
• Medigap Plans A-N help cover out-of-pocket expenses for those enrolled in Original Medicare.

Seek Expert Advice
Medicare choices vary by location and personal health needs, so it’s wise to consult with an unbiased Medicare advisor to select the right plan for you.