Medicare Basics: Parts A, B, C & D

Summary

Carol Carstensen from Medicare Made Clear offers a comprehensive overview of Medicare, a federal health insurance program for those aged 65 and above or with qualifying disabilities. She explains the different parts of Medicare, including hospital insurance (Part A), medical insurance (Part B), Medicare Advantage (Part C), and prescription drug coverage (Part D). Each part has its own coverage and costs, with Original Medicare (Parts A and B) covering basic services but not prescription drugs, dental, vision, or hearing care. Medicare Advantage plans provide broader coverage, including additional benefits like dental and vision, and have an annual out-of-pocket limit for financial protection. The choice of plan depends on personal health needs, budget, and lifestyle.

Takeaways

• 👵 Medicare is a federal health insurance program for individuals aged 65 and older, and certain individuals with qualifying disabilities.
• 🏥 Part A of Medicare covers hospital insurance, including inpatient care, skilled nursing facilities, room, meals, nursing services, and medical supplies.
• 🩺 Part B covers medical insurance, such as doctor visits, outpatient care, preventive services, and medical equipment at home.
• 💸 Most people get Part A premium-free if they or their spouse have worked and paid taxes for at least 10 years; Part B has a premium deducted from Social Security or paid directly.
• 💊 Original Medicare (Parts A and B) does not cover prescription drugs, dental, vision, or hearing care, which are additional services.
• 🌐 Part C, or Medicare Advantage, is offered by private companies and includes all Original Medicare benefits, often with additional coverage like drugs, dental, and vision.
• 💲 Medicare Advantage plans may have $0 premiums, and they all have an annual out-of-pocket limit for built-in financial protection.
• 📚 Part D is prescription drug coverage, available through Medicare Advantage or stand-alone Part D plans, with each plan having its formulary and cost structure.
• 🔄 Medicare supplement insurance, or Medigap, helps cover out-of-pocket costs of Original Medicare and is standardized with different plans labeled A through N.
• 🤔 The choice of Medicare plan is personal and depends on whether you want additional benefits, lower monthly premiums, or have specific healthcare providers and travel needs.

Q & A

What is Medicare and who is it designed for?

Medicare is a federal health insurance program for people aged 65 and older, as well as others with qualifying disabilities, and it requires the individual to be a United States citizen or a legal resident who has lived in the country for at least five consecutive years prior to enrollment.

How does individual insurance work with Medicare?

Individual insurance with Medicare means that each person needs to qualify, enroll, and choose coverage for themselves, which differs from family health plans provided by employers.

What are the two main parts of Government-sponsored Medicare?

The two main parts of Government-sponsored Medicare are Part A, which is hospital insurance, and Part B, which is medical insurance.

What does Medicare Part A cover?

Medicare Part A covers inpatient care in hospitals or skilled nursing facilities, including room, meals, nursing services, equipment, supplies, and operating room costs.

What services are included in Medicare Part B?

Medicare Part B covers doctor visits, outpatient care, ambulance services, preventive care services like flu shots, and medical devices used at home.

Are there costs associated with Part A of Medicare?

Yes, Part A has costs which can include a deductible and some copays and coinsurance, but it is premium-free for most people who have worked and paid taxes for at least 10 years.

How is the cost of Medicare Part B handled?

The cost of Medicare Part B includes a premium, which is usually deducted from one's Social Security check if they receive it, copays, a deductible, and coinsurance.

What additional coverage options are available beyond Original Medicare?

Beyond Original Medicare, coverage options include Medicare Part C (Medicare Advantage), Part D (prescription drug coverage), and Medicare supplement insurance (Medigap).

What is Medicare Advantage and how does it differ from Original Medicare?

Medicare Advantage, or Part C, is offered by private insurance companies and covers all Original Medicare benefits, often including prescription drug coverage and additional benefits like dental and vision. It may have a premium and requires choosing providers from within a network.

How does Medicare Part D provide prescription drug coverage?

Medicare Part D provides prescription drug coverage either through a Medicare Advantage plan or a stand-alone Part D plan. It requires plans to cover all types or classes of drugs normally used by Medicare beneficiaries.

What is Medicare supplement insurance and what does it cover?

Medicare supplement insurance, or Medigap, supplements Original Medicare by helping to pay some of the out-of-pocket costs associated with Part A and Part B. It is standardized and labeled from A through N, with each letter representing a plan with specific coverage.

How can one decide which Medicare plan is right for them?

Choosing the right Medicare plan involves considering personal health needs, budget, and lifestyle. Factors to consider include the desire for additional benefits like dental or vision, preference for lower monthly premiums or higher premiums with fewer out-of-pocket expenses, and the need to see specific doctors or travel frequently.

Outlines

00:00

🏥 Introduction to Medicare

Carol Carstensen from the Medicare Made Clear team introduces the basics of Medicare, a federal health insurance program for individuals aged 65 and older, as well as those with qualifying disabilities. She emphasizes the importance of understanding the basics to make informed decisions about one's Medicare coverage. The video covers the eligibility criteria, including citizenship or legal residency for at least five consecutive years prior to enrollment. Medicare is individual insurance, differing from family health plans, and is composed of Part A (hospital insurance) and Part B (medical insurance), often referred to as Original Medicare. These parts cover specific healthcare services, but come with costs such as premiums, deductibles, copays, and coinsurance. Part A is premium-free for most, especially those who have worked and paid taxes for at least 10 years, while Part B has a premium deducted from Social Security checks or paid directly to Medicare.

05:01

💊 Medicare Parts C and D: Additional Coverage

The script explains that Original Medicare (Parts A and B) does not cover everything, such as prescription drugs, dental, vision, or hearing care. To fill these gaps, Medicare offers Part C (Medicare Advantage) and Part D (prescription drug coverage). Medicare Advantage plans, provided by private companies, cover all services under Original Medicare and often include additional benefits like dental and vision coverage. These plans may have $0 premiums or require payment, with costs including copays and coinsurance. A key feature of Medicare Advantage plans is an annual out-of-pocket limit, offering financial protection once the limit is reached. Part D provides prescription drug coverage, available either through a Medicare Advantage plan or a stand-alone Part D plan. Each Part D plan has a formulary, a list of covered drugs, and costs vary depending on the plan, including a premium and copay for prescriptions. The formulary tiers determine the copay amount at the pharmacy.

10:05

🔄 Choosing the Right Medicare Plan

The final paragraph discusses Medicare supplement insurance, also known as Medigap, which helps cover out-of-pocket costs associated with Original Medicare. These plans are standardized and labeled from A to N, with each letter representing a plan with the same coverage across different providers, though prices may vary by state. The main purpose of Medigap is to cover costs not included in Parts A and B, but some providers may offer additional services like dental or hearing care. The video concludes by emphasizing the personal nature of choosing a Medicare plan, suggesting considerations such as the desire for additional benefits, preference for lower monthly premiums, and the need to see specific doctors or travel frequently. It advises viewers to consider their health needs, budget, and lifestyle when making a choice. The speaker invites viewers to visit MedicareMadeClear.com and follow them on Facebook for more information and updates on Medicare.

Keywords

💡Medicare

Medicare is a federal health insurance program in the United States, primarily for individuals aged 65 and older, as well as certain younger individuals with disabilities. It is a crucial aspect of the video's theme as it aims to educate viewers about the program's components and how it can be tailored to individual needs. The script explains that Medicare is individual insurance, requiring each person to qualify and choose their coverage.

💡Part A

Part A of Medicare refers to hospital insurance, which covers inpatient care in hospitals or skilled nursing facilities. This includes room, meals, nursing services, and equipment used during the stay. It is a fundamental part of the Original Medicare discussed in the video, and the script highlights that for most people, Part A is premium-free if they or their spouse have paid taxes for at least 10 years.

💡Part B

Part B of Medicare is medical insurance that covers outpatient services, doctor visits, preventive care, and medical devices used at home. It is another essential component of Original Medicare. The script clarifies that Part B comes with a premium, which is typically deducted from one's Social Security check, and also includes copays, deductibles, and coinsurance.

💡Original Medicare

Original Medicare, also known as traditional Medicare, is the government-sponsored health insurance that includes both Part A and Part B. The video emphasizes that while Original Medicare provides basic coverage, it does not cover everything, such as prescription drugs, dental, vision, or hearing care, which is why additional parts and plans are necessary.

💡Part C

Part C, or Medicare Advantage, is an alternative to Original Medicare offered by private insurance companies. It covers all services under Part A and Part B and often includes additional benefits like prescription drug coverage, dental, and vision. The video explains that Part C plans may have $0 premiums and come with an annual out-of-pocket limit, providing financial protection.

💡Part D

Medicare Part D is prescription drug coverage, which can be obtained through a Medicare Advantage plan or a stand-alone Part D plan. The video script points out the importance of reviewing the formulary, or list of covered drugs, when choosing a Part D plan to ensure that one's necessary medications are included.

💡Medicare Supplement Insurance

Also known as Medigap, Medicare Supplement Insurance helps pay for some of the out-of-pocket costs associated with Original Medicare Part A and Part B. The video script notes that these plans are standardized and labeled from A through N, with each letter representing a plan with a specific set of coverage benefits, though the cost may vary by provider and location.

💡Out-of-pocket costs

Out-of-pocket costs refer to the expenses that individuals must pay for healthcare services, such as premiums, deductibles, copays, and coinsurance. The video discusses how different Medicare plans, such as Original Medicare and Medicare Advantage, handle these costs and how they can impact one's choice of coverage.

💡Provider network

A provider network is a group of healthcare providers, such as doctors and hospitals, that a particular insurance plan has contracted with to provide services to plan members. The video script explains that Original Medicare does not have a provider network, allowing for more flexibility, while Medicare Advantage plans often require members to choose providers within their network for the best coverage and pricing.

💡Formulary

A formulary is a list of prescription drugs that a health insurance plan agrees to cover. The video script emphasizes the importance of checking a Medicare Part D plan's formulary to ensure that the drugs a person needs are included, as this will affect what they pay when filling prescriptions.

💡Personalized coverage

The concept of personalized coverage is central to the video's message, encouraging viewers to consider their unique health needs, budget, and lifestyle when choosing a Medicare plan. The video script provides guidance on how to evaluate different plans and coverage options to find the best fit for each individual.

Highlights

Medicare is a federal health insurance program for people 65 and older, and those with qualifying disabilities.

Medicare requires U.S. citizenship or legal residency with five consecutive years of residence.

Medicare is individual insurance, meaning each person must qualify, enroll, and choose coverage separately.

Original Medicare consists of Part A (hospital insurance) and Part B (medical insurance).

Part A covers inpatient care, room, meals, nursing services, and equipment used in care.

Part B covers doctor visits, outpatient care, ambulance services, preventive care, and medical devices.

Part A is premium-free for most people who have worked and paid taxes for at least 10 years.

Part B comes with a premium, copays, a deductible, and coinsurance.

Original Medicare does not cover prescription drugs, dental, vision, or hearing care.

Part C, Medicare Advantage, offers additional coverage including prescription drugs and may include dental and vision.

Medicare Advantage plans are offered by private companies and must set an annual out-of-pocket limit.

Part D provides prescription drug coverage, available through Medicare Advantage or stand-alone plans.

Medicare supplement insurance, or Medigap, helps pay for out-of-pocket costs of Original Medicare.

Medicare supplement plans are standardized and labeled from A through N, offering different levels of coverage.

Medicare plans can be combined in different ways to meet individual needs.

Choosing a Medicare plan depends on personal health needs, budget, and lifestyle.

Medicare Made Clear provides resources and information to help individuals make informed decisions about Medicare.

Transcripts

(upbeat music)

- Hi, my name is Carol Carstensen.

I'm part of the Medicare Made Clear team.

And I know from trying to learn about it myself,

just how much there is to know about Medicare.

It can be kind of overwhelming at times,

even if you've been at it for years.

So today, I'm gonna go over the basics of Medicare

because a strong foundation in the basics

is gonna help you understand your choices

and make better Medicare decisions for yourself.

We'll start at the beginning and talk a little bit about

what Medicare is and who can get it.

Then, we'll talk about the parts of Medicare,

what they cover, what they cost,

and then we'll go into how to put those parts together

to come up with coverage that works for you.

So, let's get started.

Medicare is a federal health insurance program

for people 65 and older

and others who have qualifying disabilities.

You also need to be a United States citizen

or a legal resident.

If you're a legal resident,

you need to have lived in this country

for at least five years in a row,

including the five years just before you enroll in Medicare.

Another important thing about Medicare

is its individual insurance.

Meaning every individual person

needs to qualify for it themselves, enroll in it

and choose coverage for themselves.

This can be different from what you're used to

if you've had a family health plan through an employer,

for example.

Government-sponsored Medicare is made up of two parts,

Part A and Part B.

Each part covers certain health care services.

The two together are often called Original Medicare

or sometimes traditional Medicare.

There's also a Part C and a Part D,

and Medicare supplement insurance.

And we'll get to those in a little bit.

So, let's start with Part A.

Part A is hospital insurance.

It covers inpatient care when you're in the hospital

or a skilled nursing facility.

It covers your room, your meals,

your nursing services when you're in the hospital,

any equipment or supplies that are used in your care,

operating room, whatever the needs are that you have

while you're in the hospital

or in a skilled nursing facility.

Medicare Part B is medical insurance.

It covers your doctor visits or your doctor services,

even when you're in the hospital.

Other things covered by Part B include

care when you're in an outpatient facility

like the clinic or the emergency room, for example,

ambulance services if you need to go to the emergency room,

preventive care services like flu shots,

medical devices that you might use at home,

such as a wheelchair.

Original Medicare, again, has Part A and Part B,

and it does come with some costs.

Those costs can include premiums, deductibles, copays,

and coinsurance.

Now, let's start with Part A.

Part A, in fact, is premium free for most people.

If you've worked and pay taxes or your spouse has

for at least 10 years, then you get Part A premium free,

otherwise you would have to pay a premium.

Other costs for Part A include a deductible

and some copays and coinsurance.

But importantly, you only pay for Part A

when you're actually receiving Part A services,

such as when you go in the hospital.

So, Medicare Part B does come with a premium.

And that will be deducted out of your Social Security check

if you receive Social Security.

Otherwise you'll need to pay it directly to Medicare.

Other costs with Part B include some copays, a deductible

and some coinsurance.

For most services, you pay 20% coinsurance,

and that means you pay 20% of the Medicare-approved amount

for that service and Medicare pays 80%.

So, we've talked about Original Medicare

Part A and Part B, what they cover and what they cost,

but they don't cover everything.

Neither Part A nor Part B covers prescription drugs,

for example, dental, or vision, or hearing care.

This is where Part C, Part D

and Medicare supplement insurance come in.

They offer you more coverage options.

Let's start with Part C.

Part C is Medicare Advantage.

Medicare Advantage plans are offered

by private insurance companies.

They cover everything that Original Medicare covers,

all of your Part A benefits and Part B benefits.

In addition, most plans will include

prescription drug coverage and additional benefits

like dental and vision coverage.

The costs for a Medicare Advantage plan

might include a premium or it might not.

There are some plans that have $0 premiums.

Other costs would include copays for services you receive

and sometimes the coinsurance.

Another important thing to know

about Medicare Advantage plans

is that they are required by Medicare

to set an annual out-of-pocket limit.

This out-of-pocket limit is like

built-in financial protection,

because if you reach that limit,

the plan would pay all of your costs

for the rest of that year.

There may be many Medicare Advantage plans offered

in a region, or a state, or a county,

and each one will have its own coverage and cost terms.

Now, let's talk about Medicare Part D.

Medicare Part D is prescription drug coverage.

You can get prescription drug coverage in two ways,

either through in the Medicare Advantage plan,

like we just talked about,

or through a stand-alone Part D plan.

You can always remember prescription drug plans and Part D

by thinking D is for drugs.

Medicare requires that Part D plans cover all the types

or classes of drugs that are normally used

by Medicare beneficiaries.

Every plan has a formulary or a list of covered drugs.

So, when you're choosing a Medicare Part D plan,

it's really important to look at those formularies

and make sure that the drugs that you take

are on those lists.

Costs for a Medicare Part D plan vary from plan to plan.

But it usually includes a premium,

and you'll probably pay a copay

when you fill a prescription.

What you pay in copays, again, depends on the plan

and also the formulary.

Every plan places certain drugs on what they call tiers,

or levels, of a formulary

and the level determines what you pay

at the pharmacy counter.

Usually, the higher the level or tier, the more you'll pay.

Costs for Medicare Part D will vary from plan to plan,

but most plans have a pharmacy network.

And if you fill your prescriptions within that network,

you're going to get the best price for that prescription.

Medicare supplement insurance is also called Medigap,

and it's just what it sounds like.

It supplements Medicare.

Medicare supplement plans help pay

some of the out-of-pocket costs

that come with the Original Medicare Part A and Part B.

Medicare supplement plans are standardized,

they're labeled from A through N.

There's 10 different plans with varying levels of coverage.

So, each Medicare supplement plan that has the same letter

offers exactly the same coverage.

However, plans may differ in what they charge.

So, a Plan G, for example,

in one state may be a different price

from Plan G in another state.

The main purpose of a Medicare supplement plan

is to cover the costs that come with Original Medicare

Part A and Part B.

However, some Medicare supplement plan providers

do offer additional programs

that can provide discounted services for dental,

or hearing, or other health care services.

Medicare parts and plans can work together

in different combinations to offer you

the coverage you need.

It really comes down to two scenarios.

You can keep Original Medicare Part A and Part B

and decide to add prescription drug coverage

and/or a Medicare supplement plan

Or you can choose a Medicare Advantage plan instead,

which encompasses all of the coverage in one plan.

People often ask, how do I know what's right for me?

What Medicare plan should I choose?

Well, that choice is personal

because your health needs are personal

and each person needs to make a decision for themselves.

There are a few things to think about as you look at

Medicare plans and coverage in general.

One, would you like to have additional benefits

like dental or vision?

If so, then a Medicare Advantage plan

might be a better choice because they offer these options

whereas Original Medicare doesn't.

Two, would you prefer to have lower monthly premiums

and pay as you go, so to speak,

when you go to the doctor with the copays.

Or would you prefer to have higher premiums

and fewer copays or out-of-pocket expenses?

Number three, do you have specific doctors

or providers you'd like to see,

or do you travel frequently?

If you do, Original Medicare might be a good choice for you

because every provider in the United States is covered.

Medicare Advantage plans often have a provider network

and you need to choose providers from within the network

to get the plan's best prices.

So, there you have it,

that's the basics of Medicare.

And if there's just one thing that you take away from today,

I hope it's this:

you get to choose.

You get to choose Medicare coverage

that fits your health needs, your budget

and your lifestyle.

If you need more information about Medicare basics

or other Medicare topics, please visit us

at MedicarMadeClear.com,

and follow us on Facebook

for answers to your Medicare questions

and regular updates on Medicare topics.

Thanks so much for listening.

(upbeat music)