What are the parts of Medicare?
We get it, trying to remember what all the parts of Medicare are can get dizzying.
This guide is meant to help keep it straight.
There are four parts of Medicare
There are actually only four parts of Medicare to remember.
Original Medicare are the first two: Part A and Part B.
Then, the other two are provided by private insurance companies. They are Part C and Part D.
Here's what they each cover:
Part A — this provides inpatient (hospital) coverage
Part B — provides outpatient (medical) coverage
Part C — also known as Medicare Advantage, this offers additional benefits with your Original Medicare coverage
Part D — this offers prescription drug coverage
So, Part A and Part B are included with Original Medicare, which is what you sign up for when you are turning 65. With this coverage, you are responsible for paying a monthly premium for Part B (you get Part A for free as long as you've worked for 10 years). You will typically pay a coinsurance for each service you receive (as much as 20% of the cost).
How to get Part C or Part D
Part C and D are private insurance plans provided by insurance companies to support your healthcare once you are enrolled in Medicare.
Part C, or Medicare Advantage, offers additional benefits Original Medicare does not.
It can include:
Prescription drug coverage
If you'd rather just add prescription drug coverage to your healthcare coverage, that is Part D.
If you are interested in drug coverage in your Medicare years, it is best to add it early on if you do not have other credible coverage because there is a stiff penalty for signing up after your initial enrollment.
Once you turn 65 or otherwise become eligible for Medicare (your 25th month of receiving Social Security disability) you have 63 days to apply for a Medicare Part D or Medicare Advantage plan with prescription drug coverage.
If you miss that window, the late enrollment penalty is 1% of the national base beneficiary premium for each month you do not have Part D or your other credible coverage.
The base beneficiary premium for 2020 is $32.74.
Once you multiply the 1% for the number of months without credible coverage, you then round to the nearest 10 cents.
This penalty will be applied to your Part D premium for the rest of your life.
Medicare Supplement Plans
Interested in a plan that covers your copayments associated with your Medicare benefits?
That is what Medicare Supplements cover.
These private insurance plans cover 50-100% of:
Medicare Part A coinsurance
Medicare Part B coinsurance
First three pints of a blood transfusion
Part A hospice care coinsurance
Skilled nursing facility coinsurance
Part A deductible
Part B deductible
Part B excess charges
Just an FYI, plans that cover Part B's deductible are no longer available to those who turned 65 on January 1, 2020 or after.