About Medicare Parts A, B, C and D (and Medigap)

Have you learned your A B C D's

Overview

Medicare is a federal health insurance program. It covers most people age 65 or older, some people younger than 65 with disabilities, and people with end-stage renal disease, often referred to as ESRD.

Medicare does not provide complete coverage for all health care needs. Even though it pays for some preventive services and covers most medically necessary services, Medicare doesn't pay for many routine services like annual physicals, or things like glasses, hearing aids, or long term care at home or in a nursing home.

Medicare Parts A, B, C and D

Medicare is divided into four parts: Part A, Part B, Part C and Part D.

Part A: Hospital Insurance

Part A pays for most inpatient hospital care, some inpatient skilled nursing home care, some home health care, and hospice care. You are automatically enrolled in Part A when you join Medicare. If you qualify automatically for Medicare (through your own or your spouse's Social Security record), you do not have to pay a monthly premium for Part A coverage.

If you have 30-39 Medicare-covered employment quarters, you may buy Part A for $216 per month (2006). If you have fewer than 30 quarters, you may purchase Part A for $393 per month (2006).

Part B: Medical Insurance

Part B pays for doctors' services, outpatient hospital care, outpatient physical and speech therapy, some home health care, ambulance services, and some medical equipment and supplies.

Part B coverage is voluntary. The monthly premium ($96.40 in 2009) is automatically deducted from your Social Security check every month. If you don't receive Social Security benefits, you will be billed for Part B.

Medicare Advantage Plans, also called  Medicare Part C (combines A, B and D into an HMO or a PPO with a private insurer)

Part C governs the way Medicare benefits are provided by companies that contract with the Medicare program. Someone with Medicare who enrolls in a Medicare Advantage plan generally gets all of their medical services through that plan. Health Maintenance Organizations (HMO's) and Preferred Provider Organizations (PPOs) contract with Medicare to provide Medicare benefits in a managed care setting, that since 2006 includes the new Medicare Part D benefit in all but a few HMOs.  People enrolling in one of those plans without Part D benefits would need to buy separate coverage for that benefit.

You must pay the Part B premium in order to qualify for a Medicare Advantage Plan.

Your SeniorArk editor has gone with Medicare Advantage. Mine has no initial drug deductible, low co-pays, covers generics thru the doughnut hole, and the coverage for hospitals and doctors has been terrific. Many Seniors choose to remain with the traditional Medicare A and B arrangement (80/20, and MediGap), and sign up for a stand-alone Part D Plan, described below.

Part D: Medicare Prescription Drug Coverage (Stand-Alone Plans with a private insurer)

Part D offers some help with prescription drugs. The coverage is voluntary and the monthly premium varies depending on how much coverage you have. For a complete description of Part D, as well as other prescription drug  information see, Charts,  Fiasco, and the Donut Hole

Medigap: http://www.medicare.gov/medigap/default.asp (Also called "supplemental insurance") Generally, when you buy a Medigap policy you must have Medicare Part A and Part B. You will have to pay the monthly Medicare Part B premium. In addition, you will have to pay a premium to the Medigap insurance company. A Medigap policy is health insurance sold by private insurance companies to fill the “gaps” in Original Medicare Plan coverage. Medigap policies help pay some of the health care costs that the Original Medicare Plan doesn’t cover. If you are in the Original Medicare Plan and have a Medigap policy, then Medicare and your Medigap policy will pay both their shares of covered health care costs.

These Medigap policies can be costly, but useful policies, and can be avoided if you use a Medicare Advantage Plan (above).

Also see:  Our Main Medicare Information Page,   Social Security Tips,  Medicare Twilight Zone   Survive a Fall into the Doughnut Hole   Part D: Does it Make Sense for Me??