Sum of the parts: Making sense of Medicare

Medicare is a government-administered health insurance program for people 65 and older. Younger people with certain medical conditions, such as end stage renal disease and ALS (Lou Gehrig’s disease), also qualify. Original Medicare offers basic coverage for hospital and medical care.

People who are receiving benefits from Social Security due to age or disability become enrolled in Medicare automatically. People who meet the requirements to receive Medicare but are not yet receiving Social Security benefits will need to sign up for Medicare on their own.

Medicare Part A is part of original Medicare, and people often refer to it as hospital coverage.

Part A covers:

• hospital care
• care in a skilled nursing facility
• hospice care
• home healthcare

How it works:

• It covers care from any healthcare professional who accepts Medicare, anywhere in the country. It does not cover care outside the United States.
• People do not need referrals for specialty care.
• There is no cost for Part A as long as a person or their spouse has paid Medicare taxes for at least 10 years.

Part B is the part of original Medicare that covers medical care.

Part B covers:

• outpatient care
• services from doctors, therapists, and other healthcare professionals
• home healthcare
• preventive care such as vaccines, cancer screenings, and annual exams
• medical equipment such as hospital beds, walkers, and machines for sleep apnea

How it works:

• People pay a monthly premium for Part B. The government will typically deduct the premium amount from a person’s Social Security checks.
• People must pay 20% of the cost of care. This is called coinsurance, and a person pays it when they receive care.
• People can have Part A but decline Part B coverage if they have other health insurance, such as through their job or a spouse’s job.

People can purchase Medicare Advantage plans from private insurance companies. These plans bundle Medicare parts A and B, often with extra benefits.

Part C covers:

• everything original Medicare covers

Plans often include additional benefits such as vision, hearing, dental, and prescription drug coverage. They might also cover care outside the U.S.

How it works:

• Plans must follow Medicare rules.
• Plans may require reapproval or a referral for certain medical services and medications.
• A plan might cover care only within its network of healthcare professionals.
• Plans can offer additional perks and discounts, such as fitness programs.
• Participants pay the Part B premium along with the plan’s premium.

Medicare Part D is prescription drug coverage that people can purchase from private insurance companies.

Part D covers:

• prescription medications
• some vaccines

How it works:

• Part D is often part of a bundle with a Medicare Advantage (Part C) plan.
• Plans must follow Medicare rules.
• A plan may not cover every brand of medication. People can check plan formularies, or lists of covered drugs, for covered medications.
• Part D plans require a monthly premium and often have a copay, an amount people must pay when they get medication.

Medicare has four parts to help pay healthcare expenses for adults over 65 and people with certain medical conditions. The government administers Medicare parts A and B. People can purchase Medicare parts C and D from private insurance companies.