Medicare Plans: An Overview of the A, B, C and D’s of Medicare

Let us help demystify Medicare for you with an overview of its four main parts: Part A (hospitalization), Part B (medical), Part C (Medicare Advantage) and Part D (prescription drugs). Learn about supplemental and gap plans — and get important tips on reviewing your coverage, choosing the right plans for your evolving healthcare needs, and enrolling.

We allocate many resources (so much time, money and research) to prepare for our senior years. Like saving for retirement, Medicare is a necessary part of preparing for your future — and it’s your responsibility to be proactive about ensuring you’re receiving the right coverage.

Overwhelmed? You’re not alone. Learning about Arizona Medicare can be intimidating. That’s why we’ve provided a basic overview to help ease you into understanding how it works.

Medicare: The Federal Health Insurance Program

Sixty-five — it’s the magic number for when you’re entitled to Medicare insurance (not to be mistaken with Medicaid, which is for people with lower incomes). It’s available for U.S. citizens and those who have been permanent legal residents for at least five years. Exceptions include some people who are disabled, regardless of age, and typically anyone receiving social security disability insurance after a waiting period of two years, explains personal finance expert and NerdWallet contributor, Liz Weston.1

Now that we’ve answered, “What is Medicare?” Keep reading to learn more about this national government health care benefits program.

What to Know About Enrollment

Check out some enrollment details below:

  • Enrollment is automatic for Medicare Part A and B if you’re receiving social security benefits on your 65th birthday. Part A and B are also referred to as Original Medicare.
  • Make sure to sign up for Social Security Benefits on the Social Security Administration website, if you’re not already receiving them. It’s important to sign up within the seven-month period around your birthday month — sometime between three months before your birthday month and three months after your birthday month.
  • If you want supplemental coverage, you’ll need to sign up for Part C (Medicare Advantage) or Medigap during the same seven-month window.
  • It’s your responsibility to enroll in Medicare Part D for prescription drug coverage.

The A, B, C and D’s of Medicare

After all this talk about Parts A, B, C and D, let’s get down to what these parts entail:

  • MEDICARE PART A — Hospitalization Insurance: Part A covers these services:2 inpatient hospital stays and treatment; care in skilled nursing facilities; home hospice care; and some home health care. As of 2020, the deductible is $1,408, and there are certain stipulations on paying for the deductible and coinsurance. Medicare Part A is “free” if you or your spouse paid Medicare taxes for at least a decade. If you didn’t pay taxes, your Part A monthly premiums can be up to $458.
  • MEDICARE PART B — Medical Insurance: Part B covers these services:2 doctor’s visits; outpatient care, procedures and some prescription drugs; medical supplies and equipment; preventative services; ambulance services; and mental health support. As of 2020, the required monthly premium is $144.60 and the deductible is $198. After meeting the deductible, you’re responsible for paying 20% of Medicare-approved costs. You must enroll if you don’t have other coverage. You’ll also have to pay a late penalty premium if you decide after turning 65 that yes, you do want to sign up for Medicare.
  • MEDICARE PART C — Medicare Advantage: Administered by private insurance companies, Part C typically includes Parts A, B and D. This bundle is an alternative to paying for other traditional parts separately and it can be more cost-effective. Plans may also offer additional benefits and may require an additional premium, depending on your provider. Potential benefits could be vision, hearing and dental.
  • MEDICARE PART D — Prescription Drugs: Also provided by private insurance companies, Part D offers prescription drug coverage, and it’s on you to join a Medicare-approved plan. Make sure to sign up as soon as you’re eligible. Otherwise, you’re subject to a late penalty premium. It’s possible that you may be required to meet an annual deductible before your plan starts to cover eligible drug expenses. Part D plans include a required premium.

Additional Information

Now that you’ve learned about Medicare Parts A–D, learn about these “good-to-know’s:”

  • Custodial care, also known as long-term care, is not covered.
  • Original Medicare doesn’t cover routine expenses2 such as hearing aids, vision, and dentures and dental care.
  • Medigap is supplemental Medicare insurance and an additional policy available from a private insurance company. Medigap is recommended for people who have Medicare Parts A and B, and who need help with significantly costly medical bills not covered by Original Medicare. You can only purchase Medigap or Medicare Advantage Plans (Part C).
  • Due to coronavirus, Medicare has expanded its telehealth and remote care coverage.

Sifting through the ever-changing plans that fit your evolving needs can be complicated and frustrating. It’s also important to review your needs and coverage on a regular basis and make changes as necessary during various enrollment periods.

You’re not alone if you need expert support. Get the facts you need during our free educational online seminar. RSVP today! We’re taking the mystery out of Medicare!

Desert Financial’s experienced advisors will help you find the best coverage and Medicare plans for your unique medical and financial needs at no extra charge.

CONTACT AN ADVISOR

2Including, but not limited to
Sources:
Information according to personal finance company, NerdWallet, and investing and leading finance educational website, Investopedia
1https://www.nerdwallet.com/article/insurance/medicare/what-is-medicare
https://www.investopedia.com/articles/personal-finance/070914/medicare-101-do-you-need-all-4-parts.asp

The material presented here is for educational purposes only, and is not intended to be used as financial, investment, or legal advice.