Medicare is the federal government health insurance program for:
- People 65 years of age and older.
- Some people with disabilities under age 65.
- People with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant).
The Four Parts of Medicare
In understanding the basics of Medicare, it’s important to learn the different types of coverage offered by the program and what they include:
- Medicare Part A (Hospital Insurance) helps cover your inpatient care in hospitals. Part A also helps cover skilled nursing facility, hospice, and home health care if you meet certain conditions.
- Medicare Part B (Medical Insurance) helps cover medically-necessary services like doctor's services and outpatient care. Part B also helps cover some preventive services to help maintain your health and to keep certain illnesses from getting worse.
- Medicare Part C (Medicare Advantage Plans) is another way to get your Medicare benefits. It combines Part A, Part B, and, sometimes, Part D (prescription drug) coverage. Medicare Advantage Plans are managed by private insurance companies approved by Medicare. These plans must cover medically-necessary services. However, plans can charge different copayments, coinsurance, or deductibles for these services.
- Medicare Part D (Medicare Prescription Drug Coverage) helps cover prescription drugs. This coverage may help lower your prescription drug costs and help protect against higher costs in the future. Compare TRICARE and Medicare Part D
Medicare Part A (Hospital Insurance)
Medicare Part A helps pay for care in hospitals as an inpatient, critical access hospitals (small facilities that give limited outpatient and inpatient services to people in rural areas), skilled nursing facilities, hospice care, and some home health care. Information about your coverage under Medicare Part A can be found in the Your Medicare Coverage database.
Cost: Most people get Part A automatically when they turn age 65. They do not have to pay a monthly payment called a premium for Part A because they or a spouse paid Medicare taxes while they were working.
If you (or your spouse) did not pay Medicare taxes while you worked and you are age 65 or older, you still may be able to buy Part A. If you paid Medicare taxes for less than 30 quarters, the standard Part A premium is $458 each month. If you paid Medicare taxes for 30-39 quarters, the standard Part A premium is $252 monthly, for people who are not otherwise eligible for premium-free hospital insurance. There are four quarters in a year, so if you worked and paid medicare taxes for less than eight years you may have the higher premium.
Coverage: For each benefit period Medicare pays all covered costs except the Medicare Part A deductible (2020 = $1,408) during the first 60 days and coinsurance amounts for hospital stays that last beyond 60 days and no more than 150 days.
For each benefit period you pay:
- A total of $1,408 for a hospital stay of 1-60 days.
- $352 per day for days 61-90 of a hospital stay.
- $704 per day for days 91-150 of a hospital stay (Lifetime Reserve Days).
- All costs for each day beyond 150 days
Medicare Part B (Medical Insurance)
Doctor services, outpatient hospital care, and some other medical services that Part A does not cover, such as the services of physical and occupational therapists, and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary.
Cost: Most people pay a monthly Medicare Part B premium of $144.60 per month, depending on your income.
Enrolling in part B is your choice. You can sign up for Part B anytime during a 7-month period that begins 3 months before you turn 65.
Deductible: The Medicare Part B deductible is $198.00 per year. (Note: You pay 20% of the Medicare-approved amount for services after you meet the $198.00 deductible.)
Medicare Part C (Medicare Advantage)
Medicare Part C includes all benefits and services covered under Part A and Part B and usually includes Medicare prescription drug coverage (Part D) as part of the plan. It is run by Medicare approved private insurance companies.
Cost: A Medicare Advantage plan is like an HMO or PPO insurance program and is offered through a private insurer. You'll generally get your care from the insurance plan's network of providers.
Medicare Part D (Prescription Drug Coverage)
Medicare Part D helps cover the cost of prescription drugs and is run by Medicare approved private insurance companies.
Cost: Most drug plans charge a monthly fee that varies by plan. You pay this in addition to the Part B premium. If you're enrolled in a Medicare Part C plan that includes prescription drug coverage, the monthly premium may include an amount for prescription drug coverage.
If you have income above $85,000 if you file individually or $170,000 if you're married filing jointly you will pay an extra amount in addition to your plan premium.
Medicare and Tricare
If you have Tricare you generally must enroll in Part A and Part B when you're first eligible to keep your Tricare coverage. For more information about Tricare and Medicare Part D, see our Medicare Part D and Tricare page.
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