What is Medicare?

Medicare is the federal health insurance program for people who are 65 or older or those younger than 65 with certain disabilities.

The coverage people automatically receive (some may have to manually enroll) when they turn 65 or receive through disability is Part A and B.

However, some people need to get additional coverage, like Medicare Advantage, prescription drug coverage, or Medicare Supplement Insurance (Medigap).

What is Medicare Part A?

Medicare Part A is Medicare’s inpatient care coverage. 

It covers things like the care you receive when you’re admitted to the hospital as an inpatient, skilled nursing facility care, and hospice and home health care.

Most of the time you won’t be charged a premium because of taxes you paid while working. However, if you haven’t worked for at least 10 years in the US you may have to pay a monthly premium.

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What is Medicare Part B?

Part B is Medicare’s medical insurance. It covers things like services or supplies to diagnose or treat you as well as some preventative services.

Part B has a premium of $144.60 in 2020 for most people. If you had an income above $87,000 ($147,000 for joint tax returns) in your applicable tax year you will pay more.

What is Medicare Part C (Medicare Advantage)?

Part C is a Medicare insurance plan that takes over for your Part A and B coverage while providing you with additional benefits.

Each plan comes with an out-of-pocket max (Original Medicare doesn’t have that benefit) and may provide: 

  • Adult day-care services
  • Dental
  • Vision
  • Hearing
  • Fitness club memberships
  • Prescription drug coverage
  • Services and supports for those with chronic conditions
  • Transportation to doctor visits

What your plans offer will depend on where you live.

What are Medigap (Medicare Supplement) plans?

With Original Medicare, you will have coinsurance and copays for which you are responsible.

There are 10 lettered Medigap plans which each cover a different percentage of: 

  • Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
  • Part B coinsurance or copayment
  • Blood (first 3 pints)
  • Part A hospice care coinsurance or copayment
  • Skilled nursing facility care coinsurance
  • Part A deductible
  • Part B deductible*
  • Part B excess charge  
  • Foreign travel exchange (up to plan limits)

*As of January 1, 2020, Medigap plans sold to new Medicare beneficiaries aren’t allowed to cover the Part B deductible. Because of this, Plans C and F are not available to people new to Medicare starting on January 1, 2020.

With these plans, Original Medicare will be billed for your Medicare-related healthcare services. Once it pays its portion, the bill is then sent to your Medicare Supplement provider. Your Medigap provider will pay according to the plan you selected. Anything left over will then be sent to you.

What is Medicare Part D?

Medicare Part D is a private insurance plan that covers a portion of the cost for your prescription medications. 

This is important because Original Medicare does not have any prescription drug coverage.

You can get Medicare Part D through a standalone plan or as a part of a Medicare Advantage plan.