- Medicare coverage is divided into several parts covering different aspects of care.
- Medicare Part A covers inpatient care and is often premium-free.
- Medicare Part B covers outpatient care and has an income-based premium.
- Medicare Part C (Medicare Advantage) is a private insurance product that combines parts A and B with additional benefits.
- Medicare Part D is a private insurance product that covers prescription drugs.
While Medicare’s many options give you flexibility in healthcare coverage, you must navigate through and understand a lot of information.
Read on for a detailed breakdown of the different parts of Medicare and how they can help you.
Medicare provides healthcare coverage to people over 65 and those with disabilities or certain health conditions.
That said, you can qualify for Medicare before the 65 if you are living with a disability, receiving dialysis or waiting for a kidney transplant due to End-Stage Renal Disease, or are living with Lou Gehrig’s disease (ALS).
Original Medicare (Parts A and B) allows you to go to doctors and facilities that accept Medicare without approval from your plan. Premiums and copayments apply but are usually income-based and may be subsidized.
Medicare Part A
Medicare Part A is the part of Original Medicare that covers your hospital costs and other inpatient care. Most people do not pay a monthly premium for Part A because they paid into the program through taxes during their working years.
Specifically, Medicare Part A will cover:
- inpatient hospital stay
- limited stay in a skilled nursing facility
- stay in a long-term care hospital
- nursing home care that is not long-term or custodial
- hospice care
- part-time or intermittent home healthcare
To ensure that Medicare covers your stay, you must:
- have an official order from your doctor stating that you need care for an illness or injury
- make sure the facility accepts Medicare
- ensure you have days left in your benefit period to use (for skilled nursing facility stays)
- confirm that Medicare and the facility approve the reason for your stay
Under Medicare Part A, you can expect to pay the following costs in 2024:
- no premium if you worked at least 40 quarters (10 years) in your lifetime and paid Medicare taxes (you’ll pay up to $505 per month if you worked less than 40 quarters)
- a $1,632 deductible for each benefit period
- daily coinsurance costs based on the length of your inpatient stay: $0 for days 1 to 60, $408 per day for days 61 to 90, and $816 per day for days 91 and beyond
- all costs if you are in the hospital for more than 90 days in one benefit period and you have exceeded your 60 lifetime reserve days
Medicare Part B
Medicare Part B is the part of Original Medicare that covers outpatient care costs. You’ll pay a monthly premium for this coverage based on your income level.
Medicare Part B will cover the cost of things like:
- doctors’ visits
- medically necessary medical supplies and services
- preventive care services
- emergency ambulance transportation
- some medical equipment
- inpatient and outpatient mental health services
- some outpatient prescription medications
To be sure Medicare Part B covers your appointment, service, or medical equipment, ask if your doctor or service provider accepts Medicare. You can also use the Medicare coverage tool to determine whether your appointment or service is covered.
Under Medicare Part B, you can expect to pay the following costs in 2024:
- a premium of at least $174.90 per month (this amount increases if your income is above $103,000 per year or $206,000 per year for married couples)
- a $240 deductible for the year
- 20 percent of Medicare-approved amounts after your deductible is met for the year
Medicare Part C (Medicare Advantage) is a private insurance product that covers Medicare Parts A and B, plus extra services.
Most of these plans offer prescription coverage in addition to inpatient and outpatient services. Benefits like dental and vision coverage can be added too.
You can customize your Medicare Advantage plan based on what the company that administers your plan offers and what you want to pay.
Medicare will pay a set amount each month to your Medicare Advantage plan provider to contribute to a share of your coverage.
Medicare Part C plans usually fall into a few different classifications:
- Health Maintenance Organization (HMO):These plans require that you receive nonemergency care from specific providers within your plan’s network.
- Preferred Provider Organization (PPO): These plans allow you to use providers within or outside your network, but youpay less for in-network care.
- Private Fee-for-Service (PFFS): These plans also allow you to see providers within or outside the plan’s network; however, the plan sets rates for what it will pay for its member services and your share.
- Special Needs Plans (SNPs): These are Medicare Advantage plans created for people with certain diseases or conditions. These plans tailor services and coverage to your specific situation.
Medicare Part C costs vary depending on the plan type and insurance provider you choose. The average Medicare Advantage monthly premium is projected to be $18.50 in 2024, but rates can range from $0 to over $400 depending on the plan you choose and where you live.
You can compare various Medicare Advantage plan costs online by clicking here.
Medicare Part D is a plan that offers coverage for prescription medications.
This is an optional Medicare program, but if you don’t enroll when you’re first eligible, you may pay penalties when you do sign up later. Those penalties will apply for as long as you have a drug plan and will be added to the cost of your monthly premium.
Prescription medication coverage must be offered at a standard level set by Medicare. But different plans can choose which medications they list in their drug lists or formularies. Most prescription drug plans group covered medications by:
- formulary, which is a list of prescription medications covered in the plan – typically with at least two choices for each drug class or category
- generic medications that may be substituted for brand-name medications with the same effect
- tiered programs that offer various levels of medications (generic only, generic plus name brand, and so on) for a range of copayments that increase with your medication prices
The cost of Medicare Part D plans depends on which plan you choose and what medications you need. The average Medicare Part D monthly premium is projected to be $55.50 in 2024, but rates can range from $0 to over $150, depending on your chosen plan and your medications.
You can compare the cost of various Medicare prescription drug plans online by clicking here.
Medicare supplement insurance, or Medigap, plans are private insurance products meant to help cover costs not paid for by Medicare parts A, B, C, or D. These plans are optional.
Medigap plans can help cover Medicare expenses like:
- copayments
- coinsurances
- deductibles
A few major changes were made to the Medigap program in 2020.
Medigap plans can no longer be used to pay for the Medicare Part B deductible. This means that two Medigap plans – Plan C and Plan F – stopped being sold to new members as of January 1, 2020. People who already had these plans, however, can keep their coverage.
Medigap plans may not cover all out-of-pocket costs, but you can find the one that best suits your financial and health needs. You have a variety of plans and coverage levels to choose from.
Here’s an overview of what each of the 10 Medigap plans covers:
| Medigap plan | Coverage |
|---|---|
| Plan A | Medicare Part A coinsurance and the costs of 365 days’ worth of care after Medicare benefits are exhausted, Part B coinsurance or copayments, the first 3 pints of a blood transfusion, and hospice care coinsurance or copayments |
| Plan B | Medicare Part A coinsurance and the costs of 365 days’ worth of care after Medicare benefits are exhausted, Part B coinsurance or copayments, the first 3 pints of a blood transfusion, hospice care coinsurance or copayments, and your Part A deductible |
| Plan C | Medicare Part A coinsurance and the costs of 365 days’ worth of care after Medicare benefits are exhausted, Part B coinsurance or copayments, the first 3 pints of a blood transfusion, hospice care coinsurance or copayments, skilled nursing facility coinsurance, your Part A deductible, your Part B deductible*, and foreign travel exchanges up to 80% |
| Plan D | Medicare Part A coinsurance and the costs of 365 days’ worth of care after Medicare benefits are exhausted, Part B coinsurance or copayments, the first 3 pints of a blood transfusion, hospice care coinsurance or copayments, coinsurance for skilled nursing facilities, your Part A deductible, and foreign travel exchanges up to 80% |
| Plan F | Medicare Part A coinsurance and the costs of 365 days’ worth of care after Medicare benefits are exhausted, Part B coinsurance or copayments, the first 3 pints of a blood transfusion, hospice care coinsurance or copayments, coinsurance for skilled nursing facilities, your Part A deductible, your Part B deductible*, Part B costs that your provider charges beyond what Medicare allows (excess charges), and foreign travel exchanges up to 80% |
| Plan G | Medicare Part A coinsurance and the costs of 365 days’ worth of care after Medicare benefits are exhausted, Part B coinsurance or copayments, the first 3 pints of a blood transfusion, hospice care coinsurance or copayments, coinsurance for skilled nursing facilities, your Part A deductible, Part B costs that your provider charges beyond what Medicare allows (excess charges), and foreign travel exchanges up to 80% |
| Plan K | Medicare Part A coinsurance and the costs of 365 days’ worth of care after Medicare benefits are exhausted, 50% of Part B coinsurance or copayments, 50% of the cost of the first 3 pints of a blood transfusion, 50% of hospice care coinsurance or copayments, 50% of coinsurance for skilled nursing facilities, 50% of your Part A deductible – with an out-of-pocket limit of $7,060 for 2024 |
| Plan L | Medicare Part A coinsurance and the costs of 365 days’ worth of care after Medicare benefits are exhausted, 75% of Part B coinsurance or copayments, 75% of the cost of the first 3 pints of a blood transfusion, 75% of hospice care coinsurance or copayments, 75% of coinsurance for skilled nursing facilities, 75% of your Part A deductible — with an out-of-pocket limit of $3,530 for 2024 |
| Plan M | Medicare Part A coinsurance and the costs of 365 days’ worth of care after Medicare benefits are exhausted, Part B coinsurance or copayments, the first 3 pints of a blood transfusion, hospice care coinsurance or copayments, coinsurance for skilled nursing facilities, 50% of your Part A deductible, and foreign travel exchanges up to 80% |
| Plan N | Medicare Part A coinsurance and the costs of 365 days’ worth of care after Medicare benefits are exhausted, Part B coinsurance or copayments, the first 3 pints of a blood transfusion, hospice care coinsurance or copayments, coinsurance for skilled nursing facilities, your Part A deductible, and foreign travel exchanges up to 80% |
Apart from Medicare, the U.S. government provides another option for healthcare coverage called Medicaid. This program is for people with a low income, allowing them to get medical care at no cost or with a minimal fee.
Many of the benefits of Medicaid differ depending on your state of residence. Some, however, are consistent across the board. These include laboratory services, inpatient and outpatient care, nursing, and home health services, health screenings and treatment for children, and certain family planning services like birth control.
In many cases, if you’re eligible for Medicaid, you won’t have to pay anything for eligible services. Sometimes, a small fee may apply.
Learn more about the differences between Medicare and Medicaid and how to qualify for Medicaid.
What are the 3 types of Medicare?
There are four types of Medicare. They are Original Medicare (Parts A and B), Medicare Advantage (Part C), Part D, and Medigap.
How do I know my Medicare type?
You can compare your area’s different Medicare coverage options and decide which one suits you best on Medicare.gov.
Sifting through the many types of Medicare plans can take time and effort. But these options give you more choices regarding coverage and the cost of your healthcare.
When you’re first eligible for Medicare, review all its parts to find the best fit for you and avoid penalties later.
Medicare plan options and costs are subject to change each year.