- Each part of Medicare covers different services at different costs.
- Medicare Parts A and B together are known as “original Medicare.”
- Medicare Part C plans cover everything that original Medicare does and often include additional coverage options.
- Medicare Part D is prescription drug coverage.
Medicare is a widely used program. There were nearly 60,000 Americans enrolled in Medicare in 2018. This number is projected to continue growing each year.
Medicare can also be a source of confusion for many people. Each part of Medicare covers different services and has different costs. Understanding what each part covers and how much it costs can help you get the most out of your Medicare coverage.
Read on to learn more about the different parts of Medicare.
What is Medicare?
Medicare is a health insurance program for people 65 years and older, as well as those with certain conditions and disabilities.
Medicare is a federal program that’s funded by taxpayer contributions to the Social Security Administration. You’ll typically pay 1.45 percent of your earnings toward Medicare, and your employer will match this amount.
Medicare has four parts. Each part covers different healthcare services you might need. Currently, the four parts of Medicare are:
- Medicare Part A is hospital insurance. It covers you during short-term inpatient stays in hospitals, and for services like hospice. It also provides limited coverage for skilled nursing facility care and certain in-home healthcare services.
- Medicare Part B is medical insurance that covers everyday care needs like doctor’s appointments, urgent care visits, counseling, medical equipment, and preventative care.
- Medicare Part C is also called Medicare Advantage. These plans combine the coverage of parts A and B and can offer components of part D into a single plan. Medicare Advantage plans are offered by private insurance companies and are overseen by Medicare.
- Medicare Part D is prescription drug coverage. Part D plans are stand-alone plans that only cover your medications. These plans are also provided through private insurance companies.
Together, parts A and B are often called “original Medicare.” All four parts each have their own costs, including deductibles, copays, and premium costs.
What does each part cover?
Knowing what each part of Medicare covers can help you prepare for an appointment or procedure. When you know which part will cover for the services you need, you’ll also have a better idea of what your costs will be.
Part A coverage
Medicare Part A covers the care you receive when you’re admitted to a facility like a hospital or hospice center. Part A will pick up all the costs while you’re there, including costs normally covered by parts B or D. Part A coverage includes:
- hospital stays and procedures
- hospice care
- limited skilled nursing facility stays
- limited home health care
Part B coverage
Medicare Part B covers a range of everyday healthcare services. In general, Part B covers services that are either medically necessary or preventive.
Medically necessary services are ordered by your doctor to treat a condition. Preventive services keep you healthy, like annual physicals or flu shots. Part B coverage includes:
- doctor’s visits
- health screenings
- annual physicals
- occupational, speech, and physical therapy visits
- specialist’s visits
- emergency room visits
- urgent care services
- emergency ambulance transportation
- durable (home) medical equipment
Part C coverage
Medicare Part C plans, also called Medicare Advantage plans, are required to cover every service that original Medicare does. Many Medicare Advantage plans also cover additional services such as:
- routine dental care
- routine vision care
- hearing exams and hearing aids
- gym memberships and other wellness benefits
Additionally, Medicare Advantage plans often include Part D prescription drug coverage. These all-inclusive Medicare Advantage plans allow you to get all your health services covered in a single plan.
Part D coverage
Medicare Part D covers your prescription drugs. Like Medicare Advantage plans, Part D plans are offered by private health insurance companies.
Medicare oversees and regulates Part D plans.
Part D plans split their coverage into levels called tiers. Each tier includes different prescriptions and has different copayments for each tier. These tiers typically break down like this:
- Tier 1: preferred generics
- Tier 2: generics
- Tier 3: preferred brand names
- Tier 4: nonpreferred brand names
- Tier 5: specialty drugs
Coverage at glance
Here is a quick review of what each part covers:
|Part A||Part B||Part C||Part D|
|Emergency room care||No||Yes||Yes||No|
|Medications||Yes, if given at inpatient facility||Yes, if given in an outpatient setting||Some plans cover, while others don’t||Yes|
What doesn’t Medicare cover?
Medicare only covers items and services it considers to be medically necessary. What’s medically necessary for you can depend on your specific health conditions and situation.
However, there are generally a few things that original Medical never covers, including:
- cosmetic surgery
- routine vision care
- routine foot care
- long-term care in nursing homes or other facilities
Keep in mind that although these services aren’t covered by original Medicare, a Medicare Advantage plan might cover some of these services. If you think you’ll need coverage for these services, make sure they are covered by your plan before enrolling.
FAQ: Does Medicare cover nursing homes?
This is a common question — and one that can be confusing to find a clear answer for.
As a rule, short-term stays in skilled nursing facilities are covered under Part A, but long-term stays aren’t. The difference is medical necessity.
Medicare only covers stays in skilled nursing facilities under set conditions, including:
- The stay needs to follow a 3-day inpatient hospital stay.
- A doctor needs to order the care you’ll receive in the skilled nursing facility.
- You must require care such as nursing, physical therapy, or other “skilled” healthcare services.
Medicare will only pay for this care while it’s still considered medically necessary for a maximum of 100 days per benefit period.
This is different from a long-term move into a nursing home, assisted living facility, or any other form of what Medicare calls “custodial care.” Medicare never pays for this type of care.
What are the costs for each part?
Your costs for services will depend on which part of Medicare they fall under for coverage. Each part also has its own deductibles and premiums to consider.
It’s important to know that costs usually change from year to year. All costs outlined below are for 2020.
Part A costs
You might hear people discuss Part A as “free.” That’s because most people get Part A without paying a deductible. When you need to use your Part A coverage, however, there are some costs involved.
Part A costs include:
- Premium. Most people don’t pay a Part A premium, but you might need to in some cases. For example, you may buy into Part A if you haven’t earned enough Social Security work credits.
- Deductible. You’ll pay $1,408 each benefit period.
- Copays and coinsurance. There is no copayment on days 0 through 60 of any inpatient stay. Starting on day 61, you’ll pay $352 a day. On day 91, you’ll pay $704 each day until you hit your maximum lifetime reserve days. You get up to 60 of these days to use over your lifetime and coinsurance costs apply.
Part B costs
Your costs for Part B include a monthly premium, annual deductible, and coinsurance.
You won’t pay anything for preventive care services like screenings and some vaccines, as long as they’re given by Medicare-approved providers.
Part B costs include:
- Premium. The standard Part B premium is $144.60 per month. You’ll pay an added surcharge if you have a higher income.
- Deductible. You’ll pay $198 for the year.
- Copays and coinsurance. You can expect to pay 20 percent of the Medicare-approved cost of all covered services.
Part C costs
Your costs for Part C will depend on the plan you choose. Part C plans are offered by private companies that set their own costs and prices.
There are plans in a variety of price ranges, from $0 premium plans to more expensive plans that cover a wider range of services. The plans available to you will vary based on where you live.
Medicare sets an out-of-pocket maximum for all Medicare Advantage plans. An out-of-pocket maximum is the most your plan can ask you to pay for things like copayments, coinsurance, and deductibles in a year.
In 2020, the out-of-pocket maximum for plans is $6,700.
The Part C premium is paid in addition to your Part B premium. So, for example, if you select a Part C plan with a $30 premium, you’d actually pay a total of $174.60 each month in premiums.
You can compare costs for plans in your area on the Medicare website.
Part D costs
Much like Part C, Part D costs will depend on the plan you choose. For example, Part D plans have a maximum deductible of $435 in 2020, but you might find a plan with a much lower deductible.
Since Part D plans are sold by private companies, the premium and other costs you’ll pay are set by the plan provider.
Plans are available at a wide range of prices. In fact, if you have a limited income you can qualify for assistance paying for Part D through a program called Extra Help.
If you have a high income, you’ll pay a higher premium than standard for any Part D plan.
Am I eligible for Medicare coverage?
There are a few different ways to become eligible for Medicare. You’ll need to be eligible for and enroll in original Medicare before you can sign up for Part C or Part D.
You can enroll in Medicare when you either:
- turn 65 years old
- have been receiving Social Security Disability Insurance (SSDI) for 24 months at any age
- have a diagnosis of end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS) at any age
If you’re enrolling because you’ve reached your 65th birthday, you’ll have a signup window that runs from 3 months before your birthday month to 3 months after it. You can sign up for Part A and Part B at this time.
If you’re eligible because you have a disability, you’ll automatically be enrolled in parts A and B after 24 months of SSDI payments. People who are eligible for Medicare through a diagnosis of ESRD or ALS don’t need to wait the 24 months.
You’ll need to be enrolled in both parts of original Medicare before you can sign up for a Part C or a Part D plan. You can enroll in either part when you first become eligible.
You can also choose to purchase a Part C or Part D plan during several open enrollment windows each year.
How do I choose a plan?
The right plan for you will depend on your budget and healthcare needs.
For example, if you take multiple prescriptions, you might want to purchase a comprehensive Part D plan with a low deductible. If you know you’ll need vision care services, you might want to select a Medicare Advantage plan that offers vision coverage.
The options available to you will depend on your city, region, or state, but most areas have a variety of plans to choose from at different price points.
Tips for selecting plans that meet your needs
- Assess your current and potential healthcare needs. Are there doctors, facilities, or medications that you can’t compromise on for your care? This may impact your policy choice, particularly when deciding between original Medicare and Medicare Advantage.
- Consider your income. If you have a fixed or limited income, paying monthly premiums may be difficult. However, if you need care that only Medicare Advantage would cover, this might be a good option to save costs in the long run.
- Look for cost savings programs. You may qualify for certain programs to help with your costs, including Medicaid and Extra Help.
- Find the right plan. Use Medicare’s plan finder tool to compare available Medicare Advantage plans in your area. You can search by prescription drugs you need, as well as covered providers and services.
How do I enroll?
You can sign up for original Medicare by visiting your local Social Security office. You can also enroll online or call Social Security at 800-772-1213. The phone lines are open Monday through Friday from 7 a.m. to 7 p.m.
Enrolling in Part C
There are two ways to sign up for a Medicare Part C plan:
- Online. Shop for Part C plans with Medicare.gov’s plan finder tool.
- Through an insurance provider. Insurance companies offer Part C plans, and you can enroll directly with them via their website or by phone.
Enrolling in Part D
If you want to enroll in a Medicare Part D plan, there are a few different ways to do so:
- By phone. You can call 800-633-4227 (or 877-486-2048 for TTY).
- Online. Use Medicare.gov’s plan finder tool to compare Part D plans available in your area.
- Contact the insurance company. You can also contact private insurers that offer Part D plans, via their website or by phone, and enroll directly with them.
When can I apply?
If you’re planning to enroll in Medicare, you’ll need to know several enrollment deadlines and dates:
- Initial enrollment period. This is a 7-month window around your 65th birthday when you can sign up for Medicare. It begins 3 months before your birth month, includes the month of your birthday, and extends 3 months after your birthday. During this time, you can enroll for all parts of Medicare without a penalty.
- Open enrollment period (October 15–December 7). During this time, you can switch from original Medicare (parts A and B) to Part C (Medicare Advantage), or from Part C back to original Medicare. You can also switch Part C plans or add, remove, or change a Part D plan.
- General enrollment period (January 1–March 31). You can enroll in Medicare during this timeframe if you didn’t enroll during your initial enrollment period.
- Special enrollment period. If you delayed Medicare enrollment for an approved reason, you can later enroll during a special enrollment period. You have 8 months from the end of your coverage or the end of your employment during which to sign up without penalty.
- Medicare Advantage open enrollment (January 1–March 31). During this period, you can switch from one Medicare Advantage plan to another or go back to original Medicare. You can’t enroll in a Medicare Advantage plan if you currently have original Medicare.
- Part D enrollment/Medicare add-ons (April 1–June 30). If you don’t have Medicare Part A, but you enrolled in Part B during the general enrollment period, you can sign up for a Part D prescription drug plan.
Each part of Medicare covers different services and has different costs:
- Part A covers inpatient care.
- Part B covers outpatient care.
- Part C covers everything parts A and B do and often includes Part D as well.
- Part D covers prescription drugs.
You need to enroll in both parts A and B before you can buy a Part C or Part D plan.
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