Medicare

Part A — Hospital Insurance

What Part A Covers

Medicare Part A is commonly referred to as Hospital Insurance. It helps cover medically necessary inpatient care, including hospital stays and certain other types of facility-based care.

For many people, Part A does not require a monthly premium because they or their spouse paid Medicare taxes through payroll for at least 40 quarters (10 years).

Part A is one half of Original Medicare, along with Part B.

Key Points

• Covers eligible inpatient/hospital services
• Usually $0 monthly premium for people with sufficient Medicare work credits
• Coverage and cost-sharing apply when you receive services
• Works together with Part B under Original Medicare
• Can be supplemented by Medicare Supplement Insurance (Medigap)

Important: Part A does not mean that all hospital-related costs are automatically covered. Deductibles and other cost-sharing can still apply.

Part B — Medical Insurance

What Part A Covers

Medicare Part B covers medically necessary doctor and outpatient medical services. This can include physician visits, diagnostic testing, procedures, and other approved medical services.

Unlike Part A, Part B generally has a monthly premium.

With Original Medicare, after applicable deductibles, you are generally responsible for 20% of the Medicare-approved amount for covered Part B services when the provider accepts Medicare assignment.

That 20% can be manageable for a routine doctor's visit, but it can become significant when dealing with expensive diagnostics, procedures, or physician services.

Why Part B Matters

You are not required to enroll in Part B immediately in every situation. However, if you delay enrollment when you are eligible and do not have qualifying creditable coverage, you may face a late-enrollment penalty that can increase your premium for as long as you have Part B.

Key Points

• Covers doctors and outpatient medical care
• Has a monthly premium
• Generally involves 20% coinsurance under Original

Medicare after applicable costs

• Late enrollment can result in a long-term penalty
• Employer or union coverage may affect when you should enroll

Medicare Supplement Connection

Because Original Medicare does not automatically eliminate all out-of-pocket costs, some people purchase Medicare Supplement Insurance (Medigap) to help pay certain costs left by Parts A and B.

Medigap plans work with Original Medicare and can help reduce certain deductibles, coinsurance, and other Medicare-approved expenses depending on the plan.

Part C — Medicare Advantage

What Is Part C?

Medicare Part C is called Medicare Advantage. Instead of receiving Medicare benefits directly through Original Medicare, you receive your Part A and Part B Medicare benefits through a private Medicare Advantage plan.

Many Medicare Advantage plans also include prescription drug coverage (Part D) in the same plan.

How It Differs From Original Medicare

Medicare Advantage plans can have a different cost structure than Original Medicare.

Instead of simply paying Medicare's standard cost-sharing structure, a Medicare Advantage plan may use:

• Copayments for doctor visits
• Copayments for hospital services
• Coinsurance
• Provider networks
• Prior authorization requirements
• Plan-specific deductibles and other costs

Medicare Advantage plans also have an annual out-of-pocket maximum for covered Medicare services, which provides a limit on your covered medical cost-sharing during the plan year.

Key Points

• Also known as Medicare Advantage
• Provided by private Medicare-approved insurance companies
• Includes Part A and Part B benefits
• Many plans include Part D prescription drug coverage
• Plans can have provider networks
• Plans may require prior authorization for certain services
• Has an annual out-of-pocket maximum for covered Medicare services

Important: Medicare Advantage is an alternative way to receive Medicare benefits. If you choose Medicare Advantage, you generally receive your Part A and Part B benefits through the Advantage plan rather than Original Medicare..

Part D — Prescription Drug Coverage

What Is Part C?

Medicare Part D provides prescription drug coverage through private Medicare-approved plans.

These plans help reduce the cost of prescription medications and can be particularly valuable because prescription needs can change unexpectedly.

Part D plans have their own monthly premiums, formularies, deductibles, copayments, and coinsurance, depending on the plan.

Why Part D Matters

Prescription drug costs can become significant, particularly when a person needs expensive medications.

If you are eligible for Part D but go without creditable prescription drug coverage for a continuous period, you may face a late-enrollment penalty if you later enroll in Part D. The penalty can continue as long as you have Part D coverage.

Part D and Medicare Advantage

Part D can be obtained as a stand-alone prescription drug plan alongside Original Medicare.

Alternatively, many Medicare Advantage plans include prescription drug coverage as part of the Medicare Advantage plan.

Key Points

• Provides prescription drug coverage
• Has a monthly premium
• Plans have different formularies and cost structures
• Creditable drug coverage can affect when you should enroll
• Late enrollment can result in a long-term penalty
• Often included within Medicare Advantage plans