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Medicare Part A covers your hospital expenses. This includes hospital stays, skilled nursing care, hospice, and home health-care services. You may have to pay various deductibles, coinsurance, and copayments. You earn Part A by paying taxes toward Medicare while working for 10 years (or 40 quarters). If you did not earn Part A, you will pay a premium.
Medicare Part B covers services that treat illnesses or conditions such as doctor’s office visits, lab work, x-rays, and outpatient surgeries. It also covers preventive services like cancer screenings and flu shots. Part B also covers medically necessary durable medical equipment such as wheelchairs and walkers to treat a disease or condition. Most people pay a premium for Part B. Even if you are enrolled in a Medicare Advantage plan that provides your Part A and Part B benefits, you will still pay your Part B premium.
Original Medicare doesn’t cover prescription drugs. Although Medicare Part D coverage is optional, it can be valuable if you take medications. You will pay a late-enrollment penalty if you don’t sign up for Medicare Part D Coverage when you are first eligible. You can get Medicare Part D prescription drug coverage either through an independent Prescription Drug Plan (PDP), or through a Medicare Advantage Plan that includes prescription drug coverage.
Before choosing a plan, our goal is to make sure you understand the differences between your many options; in particular how Medicare Supplements and Medicare Advantage Plans differ. Many people sign up for Advantage Plans thinking they are Supplement Plans, they are not. Medicare is a confusing and complicated topic. We are here to make it easy for you to understand.
A Medicare Supplement Insurance Plan is used side-by-side with original Medicare. Any provider that accepts Medicare will accept the Supplement because they only need to bill Medicare. Medicare pays their portion (generally 80% of Medicare covered benefits) and sends the remainder of the bill, which would normally be your responsibility to pay, to the Supplement which pays that part (generally 20%). It is important to note that Supplements do NOT include Prescription Drug Coverage (Part D / PDP), and for those that do not get a PDP when first eligible, there will be a penalty when they do get a PDP (there are exceptions to this). A Medicare Supplement does not change year-to-year (although the cost does generally go up, the coverage does not change).
Medicare Advantage Plans, sometimes called "Part C" or "MA Plans," are an “all in one” alternative to Original Medicare. They are offered by private insurance companies approved by Medicare. If you join a Medicare Advantage Plan, you still have Medicare. These "bundled" plans include Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance), and usually Medicare Drug Coverage (Part D).
A Medicare Prescription Drug Plan (Part D), sometimes called "PDPs", adds drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.
Each Medicare Prescription Drug Plan has its own list of covered drugs (called a formulary). Many Medicare Drug Plans place drugs into different "tiers" on their formularies. Drugs in each tier have a different cost.
A drug in a lower tier will generally cost you less than a drug in a higher tier. In some cases, if your drug is on a higher tier and your prescriber thinks you need that drug instead of a similar drug on a lower tier, you or your prescriber can ask your plan for an exception to get a lower copayment.
