What Are The 4 Types of Medicare Coverage?
Find out more about the four types of Medicare coverage: Medicare Part A, Medicare Part B, Medicare Part C and Medicare Part D by reading our guide.
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Key Takeaways:
Medicare Part A covers inpatient hospital stays
Medicare Part B covers doctor's services and preventive care
Medicare Part C plans, also known as Medicare Advantage, take the place of Medicare Parts A and B (and sometimes Part D) and are offered by Medicare-approved private companies
Medicare Part D provides prescription drug coverage and is offered by private insurance companies
If you are just entering the world of Medicare, it can seem a bit daunting. There's so much information to take in that it's difficult to know where to start. Let's begin by introducing you to the four parts of Medicare. Once you're familiar with each part, you'll be better equipped to decide what coverage you need.
What Is Original Medicare?
You'll often hear the term "Original Medicare." This refers to the combination of Medicare Part A and Medicare Part B. Original Medicare is managed by the federal government, and with this plan you can seek care anywhere Medicare is accepted. You may be required to pay certain copays, deductibles or coinsurance (a percentage of the cost of a covered service), but you don't have to get a referral to see a specialist or receive care within a certain network.
Original Medicare does not offer prescription drug coverage. If you have Original Medicare and desire prescription coverage, you may choose a standalone Part D plan in addition to Original Medicare.
Pros |
Cons |
May seek care anywhere Medicare is accepted |
Copays, deductibles and coinsurance are required |
No referrals needed for specialists |
Does not include prescription drug coverage |
What is Medicare Part A?
Medicare Part A covers:
Inpatient hospital care
Hospice care
Skilled nursing facility care
Home health services
*Please note: Not an exhaustive list
What is Medicare Part B?
Medicare Part B covers:
Doctor's services (such as office visits)
Outpatient services
Home health services
Laboratory services
Medical equipment
Mental health services
Chronic care management
Emergency room services
Preventive services
*Please note: Not an exhaustive list
What Isn't Covered by Medicare Parts A and B?
Certain things are not covered by Medicare, such as:
Custodial care (when someone provides care in activities of daily living but isn't a healthcare professional)
Dental care
Routine vision care
Dentures
Cosmetic surgery
Acupuncture
Routine foot care
You have the choice each year to forgo Original Medicare and opt for a Medicare Part C plan instead. Medicare Part C plans, offered by private insurance companies, are also known as Medicare Advantage.
How Does Medicare Part C Work?
Medicare Part C plans are similar to the group health plans you may have had through an employer. You will likely have a network of preferred providers, copays for office visits and services and variations in what may or may not be covered by your policy.
You also will likely need to choose a primary care provider and obtain referrals for specialists from your primary provider. Medicare Part C is an alternative way of getting your Medicare benefits. These are healthcare plans that are offered by Medicare-approved private companies, and they take the place of Medicare Parts A and B (and sometimes Part D) if you choose to enroll in one of them.
If you desire coverage that extends beyond what Medicare Parts A, B and D offer, then a Medicare Part C plan might be right for you. Different plans offer a variety of coverage options that may extend to the following:
Vision
Hearing
Dental
Eyeglasses
Hearing aids
Adult daycare
Private nursing
Wellness coverage
Medicare Part C plans often also have lower copays or deductibles since you are restricted to a network of providers.
Pros |
Cons |
May have lower premiums, copays or deductibles |
Restricted to a local network of providers |
May include prescription drug coverage |
Likely need to obtain referrals for specialists |
May offer extras such as vision, dental care |
|
Understanding Medicare Part D
Medicare Part D covers your prescription drug costs and is offered by private insurance companies.
If you have Original Medicare, you can choose a standalone Part D plan to provide coverage of your prescription medications. If you choose a Medicare Part C plan, Part D coverage may already be included in your plan.
Each Part D plan must meet minimum coverage requirements set by the federal government. Plans can offer coverage of a variety of different medications (known as a formulary) and charge set fees based on the "tiers" in which the medications are categorized.
You'll likely pay a yearly premium, and you may be required to meet a yearly deductible as well. Certain medications may require copays on top of those costs.
Most plans also have what is known as a coverage gap — sometimes referred to as a donut hole. This means once you and your plan spend a certain amount toward your Part D costs, your plan covers less of the costs and you cover more until you reach a certain threshold.
While the coverage gap, or donut hole, was a significant area of concern for consumers in the past, Medicare Part D has changed the rules to make costs more affordable for consumers. The gap in prescription drug coverage has been reduced dramatically, and Medicare now shares the cost with the drug manufacturer and the drug plans to make it less burdensome for you.
Now that you're familiar with the four parts of Medicare and the benefits provided by each, you will be better equipped to make choices to meet your healthcare needs. If you have more questions about the four parts of Medicare, or would like help signing up for coverage, connect with a licensed insurance agent who can help guide you through the enrollment process.
Courtney Schmidt is a medical communications professional and clinical pharmacist with pediatric and adult hospital experience.
