The Different Parts of Medicare Explained (A, B, C, D)

For many new retirees, Medicare can feel overwhelming at first glance. The program is divided into different parts, each covering specific types of healthcare services. Understanding how these parts work together is an important step in making informed decisions about healthcare in retirement.

Part A: Hospital Insurance

Part A helps cover inpatient care in hospitals, skilled nursing facilities (following a hospital stay), hospice care, and some home health services. Most people do not pay a monthly premium for Part A if they or their spouse paid Medicare taxes while working.

Part B: Medical Insurance

Part B covers outpatient care such as doctor visits, preventive services, lab work, and certain durable medical equipment. Unlike Part A, Part B typically requires a monthly premium, and there may be deductibles or coinsurance amounts depending on the service.

Part C: Medicare Advantage Plans

Medicare Advantage, also known as Part C, is offered by private insurance companies that contract with Medicare. These plans provide all Part A and Part B benefits and often include extra services like vision, hearing, dental, or prescription drug coverage. Costs and provider networks vary depending on the plan chosen.

Part D: Prescription Drug Coverage

Part D helps cover the cost of prescription medications. These plans are offered by private insurers approved by Medicare. Retirees may enroll in a stand-alone Part D plan or choose a Medicare Advantage Plan that includes prescription drug benefits. Each plan has its own list of covered medications, called a formulary.

Key Takeaways

• Part A: Hospital coverage

• Part B: Medical and outpatient care

• Part C: Medicare Advantage (private plans combining A and B, often with extras)

• Part D: Prescription drug coverage

Bringing It All Together

Each part of Medicare serves a specific purpose, and retirees often combine them to create the coverage that best fits their needs. While the program may seem complex at first, breaking it down into its parts makes it easier to understand. Knowing the role of Parts A, B, C, and D provides a strong foundation for navigating healthcare in retirement.