Understanding the ABCD's of Medicare

Assessing healthcare options for yourself or a loved one is no easy task, and this is especially true for choosing a Medicare plan. The government-run healthcare program covers a lot of great services for people 65+ or those with certain disabilities, but how is coverage determined? That’s where the different ‘Parts’ of Medicare come into play.

Medicare Parts A, B, C, and D are the individual categories of the program’s coverage, and enrolling in them is an important decision given services and costs can vary widely. Together, Parts A and B make up what’s called Original Medicare, while Part C is referred to as Medicare Advantage. Simply put, a Medicare Advantage plan can be thought of as an enhanced alternative to Original Medicare because it provides more comprehensive coverage.

By understanding the differences between each Part, Original Medicare, and Medicare Advantage, you can ensure you’re choosing the right plan for you or a loved one and ultimately lower costs.

Part A

When you apply for Medicare you’ll automatically be enrolled in Part A. This covers hospital stays as well as any services offered while inpatient. Beyond hospitals, stays in rehabilitation facilities, skilled nursing facilities, and hospice care are also covered. Because Medicare is a government-funded program that citizens pay into with tax deductions, Part A doesn’t charge a monthly premium.

Part B

Medicare Part B covers tests and services outside of hospital stays, also known as outpatient services. This might look like annual physical exams, lab tests, and routine screenings. It’s important to note that Part B generally doesn’t include prescription drug coverage except for certain medications. For these services, a monthly premium is paid based on annual income. 

Part C

Those who are eligible to receive Medicare have the option to elect for Part C, or a Medicare Advantage plan. Medicare Advantage plans function similarly to traditional health plans where a monthly premium is paid and require members to see providers in their network. Medicare Advantage plans also cover prescription drugs and benefits such as transportation, dental, and vision. The exact costs, benefits and features of the plan vary depending on the location and the insurance carrier offering the plan. 

Part D

Medicare Part D is primarily for prescription drug coverage, and because some people receive drug coverage through an employer, retirement plan, or other means, it’s an optional election. If you have Original Medicare and don’t have other drug coverage, it’s likely a good idea to sign up for Part D. Medicare Advantage plans typically offer some prescription drug coverage as well, but not all.