Medicare is a United States federal health insurance program for people 65 and older and for certain younger people with qualifying disabilities. But Medicare coverage is not limited to just one single program that is the same for everyone. Medicare is actually broken up into four different parts: Parts A, B, C and D.
Let’s review each part of Medicare, including the benefits they offer, how much they can cost, eligibility requirements and how to enroll.
Medicare Part A provides coverage for some of the costs associated with inpatient hospital care. This includes care received in a traditional hospital setting, skilled nursing facilities, hospice care and, in limited circumstances, at home.
Most people who are eligible to receive Part A do not have to pay a premium. But if you are required to pay premiums for Part A, they can stretch as high as $437 per month in 2019.
Part A carries a $1,364 deductible for each benefit period in 2019, and it also requires coinsurance that ranges from $341 to $682 per day after the first 60 days of an inpatient hospital stay.
American citizens age 65 and older and individuals who been diagnosed with a qualifying disability are eligible for Medicare Part A. In order to receive premium-free Part A, you must meet the following requirements:
You may also qualify for premium-free Part A if you have received disability payments from Social Security or the Railroad Retirement Board for at least 24 months, regardless of age.
If you are automatically enrolled in Medicare Part A, you will receive your Medicare card in the mail approximately three months prior to your 65th birthday or after your 24th month of receiving disability benefits.
If you are not automatically enrolled in Medicare Part A, you may enroll in one of the following ways:
Part B of Medicare provides medical insurance and offers coverage for some of the costs of services such as doctor’s appointments, outpatient care and medical equipment and supplies.
The standard monthly premium for Part B is $135.50 in 2019. But the Part B premium is based on your reported taxable income from two years prior, with higher earners having to pay more for their Part B. The 2019 premiums can range all the way up to $460.50 per month for the highest earners.
If you qualify for Medicare Part A, you automatically qualify for Part B. You must be enrolled in Part A in order to receive Part B benefits.
Medicare Part B is optional. If you qualify for automatic enrollment, you will be enrolled in Part A and Part B. You can decline you Part B coverage after, if you so choose.
To enroll in Part B manually, you must complete an application online, over the phone or in person by:
If you don’t sign up for Part B when you are first eligible for it and decide to get it later, you may face a late enrollment penalty.
Medicare Part C is also commonly known as Medicare Advantage. Medicare Advantage plans are sold by private insurers and serve as an alternative way to receive your Medicare Part A and Part B benefits, plus additional benefits in many cases. There will be 2,734 Medicare Advantage plans available across the U.S. in 2019.1
By law, these plans must provide at least the same minimum coverage as Medicare Part A and Part B (also referred to as Original Medicare). Medicare Advantage plans can also offer additional benefits such as dental, hearing, vision or prescription drug coverage, which are not covered by Original Medicare.
Because Medicare Advantage plans are sold by private insurers and not the federal government, the cost of a plan can vary greatly from one provider to the next. Although the average premium paid by each Medicare Advantage beneficiary in 2018 was just under $36 per month, enrollees in some states paid premiums that averaged as little as $3.34 per month (Florida) or as high as $131.73 per month (Minnesota).2
The eligibility requirements for Medicare Advantage include being enrolled in Medicare Part A and Part B and residing in an area in which your selected Medicare Advantage plan is sold. Having End-Stage Renal Disease will make you ineligible for most – but not all – Medicare Advantage plans.
Because Medicare Advantage is sold by private insurance companies, you can contact a licensed insurance agent who can help you find a plan in your area that fits your health care and budgetary needs.
There are only certain times of the year during which you may enroll in a Medicare Advantage plan. A licensed agent can help you find a policy and determine a time for you to enroll.
Medicare Part D is similar to Part C in that Part D plans are sold by private insurance companies. There will be around 900 Part D plans sold by insurance companies in the U.S. in 2019.3 Where Part D differs is in its coverage.
Part D of Medicare provides coverage exclusively for prescription drugs. Prescription drugs are not covered by Original Medicare. You can buy a Part D plan to use alongside Original Medicare. Many Medicare Advantage plans include Part D coverage. If not, you can add a standalone Part D plan to a Medicare Advantage plan that doesn’t include Part D coverage.
Because many people over 65 take prescription medication, a Part D plan is something a Medicare beneficiary can consider in order to get coverage for some of their prescription drug costs.
Much like Medicare Advantage, the costs of standalone Medicare Part D plans are likely to vary from one state or plan provider to another.
The average Part D plan premium for 2019 will be $41.21, with premiums for the most popular plans ranging from $28 to $76 per month.3
In order to sign up for Medicare Part D, you must be enrolled in both Part A and Part B. You may not enroll in a Part D plan if you are already enrolled in a Medicare Advantage plan that provides prescription drug coverage.
You can contact a licensed insurance agent for more information on finding the right Part D plan for you. Plan selection varies by state, and there are certain restrictions on when you may enroll in Medicare Part D.
In addition to the four parts of Medicare, there is Medicare Supplement Insurance, often referred to as Medigap. There are 10 different Medigap policies in most states. The benefits of each type of Medigap plan are standardized by the federal government. Massachusetts, Minnesota and Wisconsin have different plan options.
While the four parts of Medicare provide coverage for certain health care services, Medigap plans help provide coverage for Medicare out-of-pocket costs. The plans are used in conjunction with Medicare Part A and Part B to cover costs like Medicare deductibles, copayments and coinsurance.
Like Medicare Part C and Part D, Medigap plans are also sold by private insurance companies. The cost of your Medicare Supplement Insurance plan can vary, depending on where you live and when you apply for a policy.
The best time to apply for a Medicare Supplement Insurance plan is during your Medigap Open Enrollment period. This six-month period begins as soon as your are at least 65 years old and are enrolled in Medicare Part B.
During your Medigap Open Enrollment Period, insurance companies cannot use your health status to determine your policy premium costs.
You may be eligible to enroll in a Medigap plan if you meet the following requirements:
You can contact a licensed insurance agent who can help you compare quotes from Medicare Supplement Insurance plan providers in your area. You can review the available plans in your area in order to find a plan that fits with your health care needs and your budget. There are certain time periods that are optimal to sign up for a Medigap plan, and an agent can help you navigate a time for you to enroll.
You may not be enrolled in a Medigap plan and a Medicare Advantage plan at the same time.
For additional help understanding the different parts of Medicare and how you may benefit from a Medicare Part C or Part D plan, callTTY Users: 711 today to speak to a licensed insurance agent, 24 hours a day, 7 days a week.
1 Kaiser Family Foundation. Medicare Advantage 2019 Spotlight: First Look. (Oct. 16, 2018.) Retrieved from www.kff.org/report-section/medicare-advantage-2019-spotlight-first-look-data-note.
2 MedicareAdvantage.com’s internal analysis of CMS 2018 Medicare Advantage Landscape Source Files. May 2018.
3 Kaiser Family Foundation. Medicare Part D: A First Look At Prescription Drug Plans In 2019. (Oct. 16, 2018). Retrieved from www.kff.org/medicare/issue-brief/medicare-part-d-a-first-look-at-prescription-drug-plans-in-2019.