Part 1: Enrolling in Medicare: Learning Your A’s, B’s, C’s and D’s
Why does Medicare have all these parts? What do they offer? How are they different? Why do I need them? These are just a few of the questions people who are new to Medicare might ask as they begin researching the options before enrolling in Medicare.
Medicare has several different parts and plan options, and this can be overwhelming. We’ll walk through Parts A, B, C and D in this blog entry.
When the Medicare program first began in 1965, it started with Part A and Part B. A basic rule of thumb for distinguishing between Part A and Part B is that Part A is mostly for inpatient coverage while Part B is mostly for outpatient coverage. We’ll get to Part B in a minute. For now, let’s focus on Part A.
Medicare Part A covers a variety of services that are provided in an inpatient setting. You don’t pay a Part A premium as long as you have at least 40 work credits with Social Security. Services that are covered under Part A include hospital care, care in a skilled nursing facility, limited nursing home care, hospice care and home health services. Part A also covers equipment and supplies that a physician has determined to be medically necessary, like a walker or wheelchair.
- Nursing home care under Medicare Part A is limited to medically necessary treatment. Services that are considered “custodial” (non-medical care services such as bathing, feeding, dressing) aren’t covered by Medicare.
- Home health care under Medicare Part A is defined as intermittent or part-time services provided in the home, such as skilled nursing, physical therapy, speech therapy and occupational therapy. In order to qualify for Medicare-covered home health care, a doctor has to order your home health care, and the doctor must be monitoring the home health care you receive. You also must be considered “homebound.”
- Services not covered by Medicare Part A include continuous, ongoing daily care in your home, home-delivered meals, homemaker/chore services and personal care.
Medicare Part B covers other medically necessary services, such as preventive care like flu shots, mammograms, prostate exams, diabetes care and many others that can help you stay well. An initial “Welcome to Medicare” doctor’s visit is included after enrollment in Medicare. Ambulance services, medical supplies and equipment, mental health treatment and limited prescription drugs are some of the other services covered by Part B.
- Prescription drugs that are covered under Part B are limited to medications you couldn’t give yourself, like injectable drugs and infusion or nebulizer treatments. (For information about other prescription drug coverage, see Parts C and D below.)
Part B has some out-of-pocket costs. You’ll pay a monthly premium for Part B, which is deducted from your Social Security benefits. People who don’t receive Social Security can enroll in Part B, and they’ll pay their premiums directly to Medicare. In addition, you’ll need to meet a $166 deductible, and you’ll pay a 20 percent coinsurance to your health-care provider for most Part B services.
Part C (Medicare Advantage)
Medicare Parts A and B form what is known as “Original Medicare” because those two parts were available when the Medicare program began in the 1960s. In 2003, Part C – Medicare Advantage – became available. When you’re enrolling in Medicare, you can choose Original Medicare and get the traditional Parts A and B, or you can choose Medicare Advantage.
Medicare Advantage is a managed health-care plan like an HMO or a PPO. It combines both Parts A and B into one plan that’s provided by a private insurance company, so all Medicare services are covered. Some Medicare Advantage plans may cover additional services beyond those that Original Medicare would cover, like dental, vision, hearing and prescription drugs. As is typical with an HMO or PPO, you’ll see doctors that are in your plan’s network, choosing from a list your insurer provides. If you want prescription drug coverage through Medicare Advantage, make sure the plans you’re considering offer it and double check that your medications are covered.
Medicare Advantage plans vary widely in terms of benefits and services. You can research Medicare Advantage plans through the Medicare Plan Finder. Out-of-pocket costs also will vary. With a Medicare Advantage plan, you’ll have to pay the monthly Part B premium, and you’ll have an additional monthly premium for your Medicare Advantage plan as well as copayments or coinsurance.
Part D (Prescription Drug Coverage)
Medicare offers Part D for prescription drug coverage. To receive this benefit, you have to join a Medicare Prescription Drug Plan. These plans are additional coverage for Original Medicare, specifically for prescription drugs. The drug coverage offered by each plan will vary, so it’s important to research the medications you take and make sure they’re covered.
The Medicare Plan Finder can help you locate prescription drug plans. The costs of the plans will vary.
Two important notes to know about Part D Prescription Drug Coverage before enrolling in Medicare:
- If your Medicare Advantage plan includes drug coverage, you can’t enroll in Part D simultaneously. You can have either Medicare Advantage or a Part D plan. If you enroll in a Part D plan while on a Medicare Advantage plan, you’ll likely be disenrolled from Medicare Advantage and get Original Medicare.
- Part D is optional, but there are penalties for late enrollment. If you choose not to enroll in prescription drug coverage through Part D, Medicare Advantage or another creditable plan (like employer-sponsored coverage) and you later change your mind, a late-enrollment penalty will be added to your monthly Part D premium. The penalty amount will vary depending on how long you didn’t have prescription drug coverage.
Those are the A’s, B’s, C’s and D’s of Medicare – the basics about the overall plans and services that are available! Next, you’ll want to learn about about Medigap coverage and the benefits it offers before enrolling in Medicare.