Medicare Breakdown: The Differences between Medicare Parts A, B, C and D

Part A and Part B of Medicare, referred to as original Medicare, provides a comprehensive benefits package for many people. But there are many things that Part A and Part B of Medicare do not cover, such as deductibles under Part A and Part B and coinsurance under Part B. There are also no services for outpatient prescription drugs, so having Part A and Part B of Medicare doesn’t cover all your medical expenses.

Therefore, most people buy some type of Medicare Supplement or stand-alone prescription drug plan or buy a Medicare Advantage or Cost Plan depending on the county in which they live.

In a nutshell, Medicare A and B provide a comprehensive benefit, but don’t provide complete coverage that most people need.

What does each Medicare part cover?

Part A of Medicare is provided by the federal government and covers hospital services. For most people Part A is available at no cost, however, there is a deductible under Part A each time you utilize a hospital provider.

Part B of Medicare covers your physician services. There’s an annual deductible under Part B, and there is coinsurance at 80%, making your responsibility 20% of physician’s services. There is a cost to Part B of Medicare which will be determined by your income. To determine premium, Medicare goes back two years and looks at what your income was to determine what this year’s costs are going to be. In 2021 your Medicare Part B costs were determined based on your income in 2019. In 2022, your premiums are going to be based on what your income was in 2020. There’s always a two-year lag regarding what your costs are going to be, and it does change every year.

Medicare Part C is the opportunity for you to buy a Medicare Advantage plan. By law, Medicare Advantage plans must cover at least as well as original A and B of Medicare. But Medicare Part C or a Medicare Advantage plan acts as a replacement to A and B of Medicare. You’ll still be responsible for paying your Part B premium, but a Medicare Advantage plan would take the place of original A & B Medicare.

Medicare Advantage plans are under the direction of Medicare and again, must provide services at least equal to what Medicare provides. The benefit of a Medicare Advantage plan is that it can provide additional benefits that Medicare does not cover such as prescription drugs, preventive care, dental services, and eyewear. A Medicare Advantage plan is a good option for a lot of people, and it typically comes at a very low cost.

Part D of Medicare covers prescription drugs. Part D of Medicare can be purchased as a standalone when you have just original A and B of Medicare, or if you have original A and B of Medicare and a supplement. Medicare A and B do not cover prescription drugs outside of the hospital, so most people will need a Part D plan.

If you do buy a Medicare C plan (Medicare Advantage plan), often prescription drug benefits or a D plan is included with the C plan.

When you’re looking at a Medicare option make sure that it’s providing you with the benefits that you’re looking for, and the benefits that you’re going to need in the future.

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