Key Takeaways

• Medicare has multiple parts, each covering different aspects of healthcare, and understanding them is essential for making informed choices.

• Costs, coverage, and eligibility vary, so reviewing your options based on your healthcare needs can help you avoid unexpected expenses.

Understanding Medicare’s Different Parts

Medicare isn’t a one-size-fits-all program. It’s divided into multiple parts, each serving a unique purpose. Whether you’re new to Medicare or looking to make changes, knowing what each part covers can help you make smarter choices about your healthcare.

Medicare Part A: Hospital Insurance

Medicare Part A primarily covers hospital-related services. If you need inpatient care, Part A helps pay for your stay and essential services.

What It Covers:

• Inpatient hospital stays

• Skilled nursing facility care (following a hospital stay)

• Hospice care for terminally ill patients

• Limited home health care services

• Some rehabilitation services in skilled nursing facilities

• Blood transfusions after the first three pints

What You Pay:

• Most people don’t pay a monthly premium if they’ve worked and paid Medicare taxes for at least 10 years.

• In 2025, the inpatient hospital deductible is $1,676 per benefit period.

• Coinsurance applies for extended hospital stays beyond 60 days.

• If hospitalized for more than 90 days, lifetime reserve days come into effect, but they are limited.

Medicare Part B: Medical Insurance

Part B helps cover outpatient services, doctor visits, and preventive care. It plays a crucial role in keeping your health in check.

What It Covers:

• Doctor visits and outpatient care

• Preventive services, including screenings and vaccines

• Emergency room visits

• Durable medical equipment (like wheelchairs and oxygen supplies)

• Mental health services, including counseling and therapy

• Medically necessary ambulance services

What You Pay:

• In 2025, the standard monthly premium is $185.

• The annual deductible is $257.

• Once the deductible is met, you usually pay 20% of the Medicare-approved amount for services.

• Some services, like preventive screenings, may be covered at no cost if they meet Medicare guidelines.

Medicare Part C: Medicare Advantage Plans

Medicare Advantage, also known as Part C, is an alternative to Original Medicare. These plans bundle Part A and Part B benefits and may include extra services.

What It Covers:

• Everything covered under Part A and Part B

• Many plans offer additional benefits like dental, vision, and hearing coverage

• Prescription drug coverage may be included

• Some plans provide wellness programs and gym memberships

• Transportation assistance for medical appointments may be available

What You Pay:

• Costs vary widely based on the plan you choose.

• Copayments, coinsurance, and out-of-pocket limits differ from Original Medicare.

• Medicare Advantage plans have an annual maximum out-of-pocket limit, protecting you from excessive costs.

Medicare Part D: Prescription Drug Coverage

Part D provides prescription drug coverage to help manage medication costs.

What It Covers:

• Prescription medications categorized into different tiers

• Coverage varies based on formularies (lists of covered drugs)

• Protection against high out-of-pocket costs with a new $2,000 cap on drug expenses in 2025

• Coverage gap (‘donut hole’) has been eliminated, improving cost predictability

What You Pay:

• Monthly premiums vary by plan.

• The maximum deductible in 2025 is $590.

• Once the deductible is met, copays or coinsurance apply based on the medication tier.

• Catastrophic coverage phase begins after hitting the $2,000 out-of-pocket limit, reducing further expenses.

Enrollment Periods: When to Sign Up

Understanding Medicare’s enrollment windows is crucial. Missing deadlines can lead to penalties and gaps in coverage.

Initial Enrollment Period (IEP):

• A 7-month window around your 65th birthday (3 months before, the month of, and 3 months after).

• Ideal time to enroll in Parts A and B if you don’t have other coverage.

General Enrollment Period (GEP):

• Runs from January 1 to March 31 each year.

• For those who missed their IEP. Coverage starts in July.

Medicare Open Enrollment:

• From October 15 to December 7, you can switch or modify your plan for the next year.

Special Enrollment Periods (SEPs):

• Available for specific life events like retiring after 65 or losing employer coverage.

Out-of-Pocket Costs and Coverage Gaps

Medicare isn’t free, and some expenses can catch you off guard. Here’s what to keep in mind:

• Part A coinsurance applies after 60 days in the hospital.

• Part B has a 20% coinsurance after meeting the deductible.

• Part D has copays and coinsurance based on drug tiers.

• Medicare Advantage plans set different out-of-pocket maximums.

• Extra costs may arise if you use providers outside of Medicare’s approved network.

• Delaying Part B enrollment without creditable coverage results in a permanent late penalty.

How Medicare and Other Insurance Work Together

If you have other health coverage, Medicare coordinates benefits:

• Employer Coverage: If you’re still working at 65, your employer’s plan may pay first, with Medicare covering the rest.

• Medicaid: Helps cover Medicare costs for low-income individuals.

• Veterans Benefits: VA benefits and Medicare work separately; using both strategically can maximize coverage.

• TRICARE: Military retirees with TRICARE must have Part B to keep their coverage.

Choosing the Right Medicare Plan for Your Needs

Selecting the best Medicare coverage depends on several factors:

• Health Needs: Consider whether you need frequent doctor visits or specific treatments.

• Budget: Factor in premiums, deductibles, and out-of-pocket costs.

• Provider Access: Ensure your preferred doctors and hospitals accept the plan.

• Drug Coverage: Check if your medications are covered under Part D or Medicare Advantage.

• Travel Needs: If you travel frequently, consider plans that offer nationwide or international coverage.

Making Sense of Your Medicare Choices

Understanding Medicare’s different parts is key to making informed decisions. Each part plays a specific role in your healthcare, so reviewing costs, coverage, and enrollment periods is essential. If you’re unsure about your options, getting in touch with a licensed agent listed on this website can help you choose the best plan for your needs.