If you’re eligible for Medicare and ready to explore your options, the first step is to get to know its four parts. Each part represents a different kind of coverage.
Also called hospital insurance, Medicare Part A covers the cost if you are admitted to a hospital, skilled nursing facility, or hospice. It also covers some home health services. Most people are enrolled automatically in Part A when they reach age 65.
With Part A, you'll pay:
- A deductible each year. This is how much you have to spend before Medicare starts to pay its part.
- Coinsurance. This is the part of the costs for hospital care you may be required to pay after you've met your deductible.
If you or your spouse receives Social Security benefits, you don't have to pay a monthly fee to have Part A and will be automatically enrolled.
If you or your spouse don't receive Social Security benefits, either because you are still working or because you don’t qualify, you will need to join through your local Social Security office. You will have to pay a monthly fee to have Part A if you are not eligible for Social Security benefits.
Also called medical insurance, Part B covers outpatient care. For instance, it pays for your visits to a doctor’s office, tests, and preventive care like cancer tests and vaccines.
Part B also covers some medical supplies, like blood sugar test strips, therapeutic shoes, and more. It’s common for people to be automatically enrolled in Part B, too.
For Medicare Part B, you pay:
- A monthly fee, called a premium. If you don’t sign up for Part B when you are first eligible, your premium may have to pay a penalty for as long as you have Medicare.
- A deductible, which is a set amount you pay each year before Part B starts paying for any of your care
- Twenty percent of the Medicare-approved amount for some types of care. These are doctor's appointments, physical therapy, diabetes supplies, durable medical equipment like commode chairs, wheelchairs, and other care. You have to meet your deductible first and then pay 20% of the services you receive.
If you see a doctor who has not agreed to accept Medicare-approved amounts, you will pay more -- possibly up to the full cost -- for a doctor's visit and care.
Part C, Medicare Advantage
Medicare Advantage is a Medicare health plan that you can get from a private insurance company. This plan gives you all the benefits you get with traditional Medicare, and possibly more. You have to be enrolled in Part A and Part B in order to sign up for a Medicare Advantage plan.
Some Medicare Advantage plans include prescription medicine coverage (Part D). You may also get coverage for dental, hearing, vision, and wellness programs.
When you have Medicare Advantage, you have to follow all of the plan's rules. For instance, you need to use doctors in the plan’s network.
Plans may have different limits on out-of-pocket costs. So make sure to compare plans before you sign up for one.
Part D, Prescription Drug Benefit
If you have Medicare, you can join a private health plan that pays for prescription drugs. This coverage is called Part D, or the Medicare prescription drug benefit. Each insurance company that offers a Part D plan decides which drugs it will cover and what they will cost. Look carefully at the details of each plan before you choose one.
You pay a monthly fee, called the premium, to get prescription drug coverage. This is addition to the monthly fees you pay for Part B if you have it.
You can also get perscription drugs benefits by joining one of these plans:
- A Medicare Advantage (Part C) plan that has a prescription benefit
- A Medicare Cost Plan with prescription medicine benefits (this is not very common)
The premium you pay for one of these plans includes prescription drug coverage.
You need to decide whether to get Part D coverage as soon as you're eligible. If you wait, you may have to pay a penalty for joining late. You can change your Part D plan each year during open enrollment.
If you can't afford a prescription drug plan, financial help may be available.
For more information or to get help, you can visit your local State Health Insurance Assistance Program (SHIP). Each SHIP has people trained to help you understand your Medicare benefits and answer questions you have about your Medicare coverage. To find your local SHIP go to the State Health Insurance Assistance Program website.