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Health Insurance: Medicare Parts

Health Insurance: Medicare Parts


Medicare Parts A, B, C and D

Medicare is comprised of four different parts. Learn more about each part to help you make an informed decision when navigating your Medicare coverage options.

Part A: Hospital Insurance

• When you are younger than 65 and employed, you will likely notice tax deductions for Medicare. These contributions are evenly split between you and your employer and put into the Federal government’s Medicare hospital insurance trust fund. Once you turn 65, you are automatically enrolled into Part A.

Cost-sharing: there are no premiums in Part A because the funds come from the Medicare hospital insurance trust fund. You will pay a deductible per year, and after your deductible is met, there will be a copay for health care services and treatments.

 

Part B: Supplemental medical insurance

• This is an optional an insurance that you can opt into when you turn 65. You are not automatically enrolled into Part B.

Cost-sharing: there are premiums, but they are adjusted based on your income. You will pay a deductible per year, and after your deductible is met, there will be a 20% coinsurance for health care services and treatments.

Supplemental coverage: Many people who have Part B also have secondary health insurance through Medicaid, Medigap, and/or employer-sponsored health insurance to help pay for out-of-pocket costs.

 

Part C: Medical Advantage

• This is where private managed care insurance companies provide Parts A and B hospital and medical coverage benefits. The participating private insurers contract with Medicare. You will often have a “gatekeeper,” a primary care physician that manages your care and refers you to specialty care when needed.

Cost-sharing: You will likely still need to pay Part B premiums as well as your private carrier’s premium. Part A and B deductibles are often waived, but there could be more cost-sharing that comes with being insured by private carriers.

Additional benefits: Medicare Advantage has additional benefits that traditional Medicare does not have. These include coverage for vision, hearing, health and wellness programs, and even groceries.

 

Part D: Prescription drug coverage

• This is where private insurance companies or private prescription drug plans provide outpatient prescription drug coverage. If you have Parts A and B, you have the option to sign up for Part D in order to add drug coverage. If you have Part C, you can often get prescription drug coverage without needing to sign up for Part D.

“Donut Hole” coverage gap: A lot of plans in Medicare Part D have a coverage gap, also referred to as the “donut hole.” This means that after you spend a certain amount on your prescription drugs, the coverage gap begins, and you will have to pay almost all of the costs for your medications. There is a yearly limit to these costs. If you exceed the yearly limit, your plan coverage will kick in again.


 

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