Medicare is the federal insurance program that covers people over 65 years old and those with certain disabilities. Medicare has four parts: Parts A through C, B, D and C. Medicare beneficiaries can choose which part of Medicare they want to receive their benefits.
Here are the details about each part, including its cost and compatibility.
Medicare Part A: Hospital insurance
Medicare Part A, which is also part of Original Medicare, is a component of Medicare Part B. The majority of people are eligible once they reach 65 years. A person can be eligible for Medicare even if they are less than 65 years old based on their disability status.
Medicare Part A coverage
Medicare Part A includes stays in hospitals, skilled nursing facilities, hospice care, and other related health care services
. It does not cover long-term or custodial care in nursing homes or assisted living facilities.
Medicare Part A cost
Most people get Medicare Part A for free. People who aren’t eligible for premium-free Medicare Part A may be able to buy it at a price of up to
$56 per month in 2023
Centers for Medicare & Medicaid Services. Costs. Retrieved January 23, 2023.
Medicare Part A will have a $1,600 deductible in 2023. Inpatient services do not have copays, but they are applicable after a specified period. Copays for inpatient hospital stays start at $400 per night in 2023. They go up to $490 after 90 days.
While there is no limit to Medicare Part A’s annual out-of-pocket expenses, you can reduce these costs by purchasing a separate Medicare Supplement Insurance policy or Medigap.
Medicare Part B: Outpatient medical insurance
Medicare Part B
Original Medicare includes Medicare Part A and Medicare Part B. Medicare Part A is available to those who are eligible for premium-free Medicare Part A.
. U.S. citizens, as well as certain legal residents 65 years and older, can also be eligible for Part B even though they are not eligible for premium-free or Part A.
Medicare Part B coverage
Medicare Part A covers two types of services: outpatient care and preventive services.
Here are some examples of outpatient care that Medicare Part B covers.
Medicare Part B covers preventive services such as screenings and testing, vaccinations, and counseling.
Medicare Part B cost
Medicare Part B includes a premium, coinsurance, and a deductible
Centers for Medicare & Medicaid Services. Costs of Part B. January 23, 2023.
Premiums: The standard premium is $164.90 per person in 2023. The adjusted amount is higher for beneficiaries with high incomes.
Deductible: In 2023, the deductible will be $226.
Cost Sharing: Outpatient care has a 20% coinsurance but most preventive services don’t have any coinsurance.
There is no cap on your out of pocket costs. These costs can be reduced by purchasing Medigap separately. )
Medicare Part C: Medicare Advantage
Medicare Part C is also known by Medicare Advantage. Private insurance companies sell Medicare Advantage plans as a bundled option to original Medicare (Medicare Part A & Part B).
Medicare Part C (Medicare Advantage) coverage
Although benefits can vary from one plan to the next, all Medicare Advantage plans must provide at least the same benefits, most of them cover more.
. Medicare Advantage plans typically include prescription drug coverage, and many offer additional benefits.
Medicare Part C (Medicare Advantage) cost
You are still responsible for paying the Medicare Part B premium if you purchase a Medicare Advantage plan. It is $164.90 per monthly in 2023.
Medicare Advantage plans have a maximum amount out-of pocket, after which you won’t have to pay any additional out-ofpocket costs for the entire year. In-network services have an out-of pocket limit of $8,300. However, there is a higher limit for both in-network and out-of network services. Prescription drugs are exempted from the out-of-pocket limits.
Medicare Part C, Medicare Advantage and Other Parts of Medicare
Medicare Advantage is an all in one bundle. Members get all of their Medicare benefits through their Medicare Advantage plan. You can’t generally buy additional coverage with a Medicare Advantage plan such as a Medigap or stand-alone Medicare Part D policy.
Medicare Part D: Prescription drug coverage
Medicare Part D
Private insurance companies sell plans to cover prescription drugs. You can get Medicare prescription drug coverage in two ways depending on whether or not you have Original Medicare (Part A, Part B) and a Medicare Advantage plan.
Prescription drug coverage can be obtained by purchasing a standalone Part D plan if you have Medicare Part A or Part B.
Prescription drug coverage is usually included in Medicare Advantage plans. In most cases, Medicare Advantage members can’t join a separate Medicare Part D plan.
Medicare Part D coverage
Each Medicare Part D and Medicare Advantage plan that provides prescription drug coverage includes a formulary. This is the list of drugs covered by each plan. To determine if and how a plan covers you, check the formulary.
Many formularies are divided into tiers. Each tier has its own cost-sharing requirements. Lower tier drugs have lower or no cost-sharing requirements while higher tier drugs can be more expensive out of pocket.
Medicare Part D cost
Medicare Part D plans may have premiums, deductables and/or copays.
The average premium for Basic Stand-alone Medicare Part D Coverage is
$31.50 a month in 2023
. Medicare Advantage plans don’t have separate prescription drug coverage charges. Instead, you only pay one premium to cover the entire plan.
Deductible: Many plans include a deductible that covers all or part of the covered drugs. The deductible cannot exceed $505 per year, as required by law.
Cost Sharing: Every plan’s formulary outlines the copays or coinsurance for each tier.
Prescription drug coverage is not limited to an out-of-pocket maximum, but this will change soon. The
Inflation Reduction Act
Implements cap on out-of pocket costs beginning in 2024
Medicare Supplement Insurance, (Medigap),
Medicare Supplement Insurance (Medigap) covers out-of pocket costs for Medicare beneficiaries who have Medicare Part A or Part B. Medigap doesn’t belong to the Medicare letter “Part”. It’s still an important consideration for Original Medicare beneficiaries.
Medigap policies cover only Medicare Part A/or Part B costs. They don’t work with Medicare Advantage plans.
Private insurance companies sell Medigap policies to cover certain coinsurance and copays, as well as deductibles that are left after Medicare Part A or B has paid its portion. There are
10 standardized Medigap plans
Different levels of coverage
Monthly premiums for Medigap policies can range from $30 to hundreds of dollars each month. The premiums for Medigap policies can vary depending on the plan type and the health insurance company. Other factors include age, sex and location.
Some plan types may have copays or coinsurance, but most Medigap plans don’t.