The A, B, C, and D’s of Medicare
Medicare can at first seem very confusing and complicated. But, if we break Medicare down into its 4 ” Parts”, it quickly becomes more clear. Let take a look at the basics on what makes up Medicare.
Medicare is a federal insurance program, managed by the Centers for Medicare & Medicaid Services (CMS) for eligible United States citizens and legal permanent residents of five or more continuous years. You’re eligible for Medicare if you’re 65 or older, under 65 through disability, or people with end-stage renal disease (ESRD) requiring dialysis or a kidney transplant.
The Federal coverage provide, or “Original Medicare,” is made up of 2 parts; Part A (hospital coverage) and Part B (medical coverage). Let’s go over “Original Medicare” first.
Part A: Hospitalization
Part A covers inpatient hospital, skilled nursing facility, hospice, and eligible home health care. Part A-covered hospital services include medically necessary services and equipment to treat your condition. Part A has a $1364 deductible per “Benefit Period” for 2019. As long as you paid Medicare taxes for 40 quarters (10 years), Part A has no premium. Part A is available for a premium for those who did not pay Medicare taxes for this period.
Part B: Medical Services
Part B actually covers 2 types of services:
Medically necessary services: Services or supplies that are needed to diagnose or treat your medical condition and that meet accepted standards of medical practice.
Preventive services: Health care to prevent illness (like the flu) or detect it at an early stage, when treatment is most likely to work best.
Preventative services are generally fully covered as long as the provider accepts Medicare. The standard 2019 Part B premium amount is $135.50 (or higher depending on your income). The Part B deductible for 2019 is $185 per year and once this deductible is met, you are responsible for 20% copay.
Part C: Medicare Advantage
Medicare Part C or Medicare Advantage are the Managed care plans that are Medicare approved, but offered by private insurance companies. Medicare Advantage plans are private health plans that you can choose instead of traditional Medicare. So instead of Medicare providing your Part A & B benefits, now the private insurance now covers these benefits and sometimes covers Part D as well. The Medicare Advantage plans are required to cover what Medicare covers in Part A and B but often also include coverage for vision, hearing, Part D Drugs, dental, and may have no premium. Advantage plans will usually want you to use a network of doctors to receive your care.
Medicare Part D
Part D is a federally created program to help lower the cost of prescription drug coverage. Unlike Medicare Part A & B, you will not enroll in Part D through the Social Security office. Part D plans are offered by private insurance companies and are specific to your area. Shopping for Part D plans is important as all companies use their own covered drug lists, so checking to make sure your prescriptions are covered is very important.
Medicare drug plans are optional and you will pay a monthly premium. By choosing a Part D plan you will get significantly lower copays on your medicines.There may also be penalties associated with not enrolling in a Part D plan so you will want to talk to an AHIC agent before making this choice.
For more information on when you can enroll, disenroll, and everything else Medicare Part D, visit the Part D section of our website for more details about how your drug coverage under Medicare will work.