Medicare Basics

Medicare is comprised of four parts: A,B,C and D.

Part A - Hospitalization insurance covers inpatient care hospital in a hospital and skilled nursing facility, skilled nursing care after hospitalization, rehabilitative services, home health care and hospice care for the terminally ill.

Part B - Medical insurance covers medically necessary doctor services, such as surgical care, diagnostic test and procedures, hospital outpatient services, lab services, physical and occupational therapy, mental health services, durable medical equipment, and many preventive services.

Part C - Also known as Medicare Advantage (MA) plans, these are offered through Medicare-approved companies that have an agreement with the Centers for Medicare and Medicaid Services (CMS). These plans may or may not include drug coverage, typically have provider networks and may come with additional benefits such as dental, vision, hearing, gym membership and over-the-counter (OTC) benefits.

Part D - Drug coverage can be obtained with an MA plan that includes drug coverage, or through a stand-alone Prescription Drug Plan (PDP) offered by a Medicare-approved insurance company. Although enrollment in Part D is voluntary, you may acquire a Late Enrollment Penalty (LEP) if you sign up 63 days after your Initial Enrollment Period (IEP) ends. This penalty amount may change each year, but remains as long as you have Medicare drug coverage. Each drug plan has its own formulary (list of drugs it covers). Therefore, it is important to make sure you are on the best plan for your prescription needs. A stand-alone PDP may not be purchased with a Part C plan.

Medicare Supplements - Medicare Supplement policies are offered through private insurance companies. They provide you coverage for medical expenses not covered by Medicare Part A and B (20% of the Medicare-approved charges Medicare does not pay). Unlike MA plans, Medicare Supplements do not have networks. Supplement policies may not be purchased in conjunction with a Part C plan.

*Everyone’s situation is different. It’s important for you to work with a licensed insurance agent to help you understand your rights and options specific to your needs.*