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The Various Parts of Medicare—Learn the Basics

July 15, 2015

medicareMany individuals put much thought into retirement but seldom think about what their health care options are for when they do retire. As we grow older, our health care needs increase and our costs rise. Medicare was put in place to assist in our health care and its costs.

Medicare does offset health care expenses; however, it doesn't cover everything, and you should know what Medicare offers and what it does not.

Medicare has four main parts: A, B, C and D. Below are summaries for each. Be sure to know at least the basics so you can better prepare for when you retire.

Part A—Hospital Insurance

If you or your spouse paid Medicare taxes through work (at least 40 calendar quarters during your lifetimes), you won't pay a premium for Part A.

Coverage

  • Inpatient stays at medical facilities.
  • Hospice care, home health care and nursing home care for a limited time.
  • Services (e.g., lab tests, surgeries and doctor visits) and supplies (e.g., wheelchairs and walkers) considered medically necessary to treat a disease or condition.

Part B—Medical Insurance

This coverage isn't free; you will need to pay a monthly premium and a yearly deductible (plus 20% of costs). The amount of the premium depends on the recipient's income.

Coverage

  • Some costs for outpatient care, physician services, durable medical equipment (scooters, wheelchairs) and other medical services (lab tests, health screenings).
  • Medically necessary services and supplies (items needed to diagnose or treat your medical condition).
  • Preventive services.
  • Clinical research, ambulance services, mental health, partial hospitalization, second opinions before surgery, limited outpatient prescription drugs.
  • Some individuals are automatically enrolled; others have to sign up.

Part C—Advantage Plans

Insurance companies offer these Medicare-approved plans. Part C plans offer seniors all the benefits of Part A and Part B and more.

Coverage

  • Prescription drugs.
  • Hearing, vision, dental and fitness.
  • You need to have Part A and Part B coverage to enroll in Part C.
  • Provider networks, premiums, copays, coinsurance and out-of-pocket spending limits vary.

Part D—Prescription Drug Plans

Medicare offers prescription drug coverage; however, you must join a plan run by an insurance company or other private company approved by Medicare.

Coverage

  • Depends on the insurance company—the costs and the drugs covered by each plan vary.

Now that you know the Medicare basics, you can start planning for your retirement health care options. Growing older happens to all of us, so do your best to prepare for your changing health needs.