What is Medicare and how does it work?
Medicare is the federal government’s health care program. It's for people age 65 and older, and younger people with certain disabilities. Did you know Medicare offers you several different coverage options? We’re here to help you understand them.
What is Original Medicare?
Part B complements your Part A coverage to provide coverage both in and out of the hospital. In fact, Part A and Part B were the first parts of Medicare created by the government. This is why the two parts together are often referred to as “Original Medicare.” Additionally, most people who do not have additional coverage through a group plan (such as those offered by employers) generally sign up for Medicare Parts A and B at the same time.
Medicare Part A — Hospital coverage
What does Medicare Part A cover?
Part A covers expenses associated with hospital care. It includes coverage for services like nursing care and hospital stays. It also covers some hospital-related care that takes place outside a hospital setting. For example, skilled nursing care after you leave the hospital.
What does Medicare Part A cost?
You generally won’t have to pay a monthly premium for Medicare Part A if you or your spouse paid Medicare payroll taxes for 40 quarters or more. But you do need to pay deductibles before Medicare will cover any hospitalization costs.
Medicare Part B — Covering your doctor visits and beyond
What does Medicare Part B cover?
- Doctor visits
- Durable medical equipment
- Outpatient procedures (even if they occur at a hospital)
- Lab services
- Other testing
- Additional services
What does Medicare Part B cost?
Most people need to pay a monthly premium to maintain their Medicare Part B coverage. You also need to pay a deductible before Part B begins paying for services. And if your income exceeds a certain amount, you pay the premium plus an extra charge. This is called an Income Related Monthly Adjustment Amount (IRMAA). See our Medicare costs FAQ to learn more about premiums, copays and more.
Medicare Part C — Combining your coverage
Medicare Part C is also known as Medicare Advantage. It’s made up of plans approved by Medicare that are offered through private insurance companies. Before enrolling in a Medicare Advantage plan, you’ll need to sign up for both Part A and Part B. You can then choose a Medicare Advantage plan that’s right for you. This means that to get a Medicare Advantage plan, you have to sign up directly with the private insurer that offers the plan you want. But you can only sign up after you’ve enrolled in Parts A and B.
What does Medicare Part C cover?
All Medicare Part C, or Medicare Advantage, plans cover everything Original Medicare covers. But Medicare Advantage plans can also cover more.
Examples of Medicare Advantage’s additional benefits include:
Medicare Part D — Your prescription drug plan
Like Medicare Advantage, Part D plans are offered by private insurance companies that are approved by Medicare. Prescription drug benefits are often included as part of Medicare Advantage plans. However, if you choose to enroll in Original Medicare, you can add prescription drug coverage to your Original Medicare coverage. You can do this by purchasing a stand-alone Part D plan from a private insurer.
What does Medicare Part D cover?
Part D offers prescription drug coverage. Every Medicare prescription drug plan has a list of drugs that it agrees to cover. This list is known as a formulary. When you research a plan, check your list of medications against the prescription drugs in your plan’s formulary.
What does Medicare Part D cost?
Depending on the Part D plan you choose, you usually pay a monthly premium and sometimes a deductible. If your income exceeds a certain amount, you’re also responsible for an extra monthly charge. It’s called a Part D Income Related Monthly Adjustment Amount (IRMAA), and it’s on top of your premium. In addition, you’re responsible for out-of-pocket costs for your drugs. But keep in mind each plan varies in the cost of premiums, the prices of drugs and the list of drugs covered.
Medicare Part D — Your prescription drug plan
Medicare Supplement plans are sometimes called Medigap plans. They’re sold by private insurance companies, just like Medicare Advantage and Medicare Part D prescription drug plans.
What do Medicare Supplement plans cover?
Medicare Supplement plans help manage some out-of-pocket costs that Original Medicare doesn’t cover, including copayments and deductibles. That means Medicare Supplement plans are only available to people who are covered by Original Medicare. If you opt for a Medicare Advantage plan, you’re not eligible to buy a Medicare Supplement plan.
What do Medicare Supplement plans cost?
Medicare Supplement plans charge a monthly premium. The cost of the premium varies with the plan.