Medicare is divided into 4 parts, and most people new to Medicare find this very confusing. Why do there have to be so many different Medicare parts?? And what’s the difference between the parts of Medicare and Medicare plans?
Fortunately, we can break this down to make it simpler for you to understand. Medicare itself has parts (not plans), so let’s start with those 4 parts of Medicare explained.
Medicare Part A
parts of medicare
There are 4 parts of Medicare. Part A provides your hospital benefits.
Part A of Medicare is your hospital insurance. This helps you cover common hospital expenses for things such as the cost of a semi-private room for stays, hospice, home health care and even skilled nursing facility stays. This part of Medicare also covers blood transfusions requiring more than 3 pints of blood.
Part A is also free for most people as long as they have worked at least 10 years in the U.S.
We often tell our clients to think of Part A as your room and board in the hospital. This part of Medicare provides you a place to stay, with meals, while you receive medical services.
However, there are many things that happen in a hospital that fall under another part of Medicare – Part B.
Medicare Part B
4 parts of Medicare
The Part of Medicare that covers doctor visits is Part B.
Part B of Medicare is for outpatient services that are deemed medically necessary. Medicare Part B includes coverage for services like doctor office visits, lab testing, diagnostic imaging, preventive care, surgeries, ambulance rides, chemotherapy and radiation, and even extensive dialysis care for people with renal failure. Many of these procedures may occur in a hospital. However, they fall under Part B because physicians provide them.
Sometimes people will ask us if they really need Part B. The answer is YES if Medicare will be your primary coverage or only coverage. Read our blog here to learn more: “Do I Need Medicare Part B?”
Medicare Part C
Part C of Medicare is somewhat confusing. Unlike the other parts of Medicare, which cover specific medical benefits, Medicare Part C is just another name for private Medicare insurance. The Balanced Budget Act of 1997 created Part C, which is now referred to as Medicare Advantage.
Medicare Advantage plans are private health plans that you can choose instead of Medicare. You would get your Part A, Part B, and sometimes also Part D all from one insurance carrier. Advantage plans usually has a network of providers from whom you will seek your care.
Part C plans can often have lower premiums than Medigap. However, you’ll pay more copays as you go along so they are not necessarily cheaper over the long term. Before enrolling in one, read our post on Medicare Advantage vs Medicare Supplement.
Medicare Part D
Part D is a federally created program to help you lower the cost of your retail prescription drugs. Unlike Medicare Part A & B, you will not enroll in Part D through the Social Security office. Instead, you will select one of the Part D plans available in your county from private insurance carriers. By signing up for that plan, you will have enrolled in Part D.
Medicare drug plans are optional. You’ll have a monthly premium that you will pay to the insurance carrier. In return, they give you significantly lower copays on your medicines than you would pay if you had no Part D insurance.
There are rules for when you can enroll and dis-enroll from these drug plans, so be sure to visit the Medicare Part D section of our website for more details about how your drug coverage under Medicare will work.
For a quick 4-minute video about the parts of Medicare, check out our YouTube video:
What about Parts F and G?
Many people confuse the terms Parts and Plans. There are only 4 Medicare Parts. All the other letters are Medigap plans. Medigap plans are optional supplemental coverage that you can buy to fill in the gaps in Medicare. You don’t enroll in these at the Social Security office. You will choose your supplemental coverage after you have joined Medicare and received your new Medicare card in the mail.