Medicare Coverage Basics: The Four Parts

Medicare is divided into four distinct parts, each covering different healthcare services. Part A (Hospital Insurance) helps cover inpatient hospital care, skilled nursing facility care, hospice care, and some home health services. Most beneficiaries don't pay a premium for Part A if they or their spouse paid Medicare taxes while working.

Part B (Medical Insurance) covers certain doctors' services, outpatient care, medical supplies, and preventive services. Unlike Part A, Part B requires a monthly premium. Part C (Medicare Advantage) combines Parts A and B coverage and often includes prescription drug coverage and additional benefits like vision and dental care. Part D (Prescription Drug Coverage) helps cover the cost of prescription medications and is offered by private insurance companies approved by Medicare.

Hospital and Medical Services Coverage

Medicare Part A covers essential hospital services including semi-private rooms, meals, general nursing, drugs as part of your inpatient treatment, and other hospital services and supplies. Coverage also extends to skilled nursing facility care following a hospital stay, though limitations apply. For hospice care, Medicare covers pain relief, symptom management, and support services for those certified as terminally ill.

Under Part B, Medicare beneficiaries receive coverage for outpatient care including doctor visits, lab tests, diagnostic screenings, and preventive services. Preventive services include yearly wellness visits, flu shots, diabetes screenings, and mammograms. Part B also covers durable medical equipment like wheelchairs, walkers, and oxygen equipment when deemed medically necessary by a healthcare provider.

Medicare Advantage vs. Original Medicare

When choosing Medicare coverage, beneficiaries have two main options: Original Medicare (Parts A and B) or Medicare Advantage (Part C). Original Medicare allows you to see any doctor that accepts Medicare, without referrals, but often has higher out-of-pocket costs without a cap on annual expenses. Supplemental insurance (Medigap) can help cover these costs.

Medicare Advantage plans, offered by private companies like UnitedHealthcare, Humana, and Aetna, combine Parts A and B coverage and typically include Part D prescription coverage. These plans often provide additional benefits not covered by Original Medicare, such as dental, vision, and hearing services. However, they usually restrict you to network providers and may require referrals for specialists.

Below is a comparison of leading Medicare Advantage providers:

  • UnitedHealthcare - Extensive provider networks with AARP partnership
  • Humana - Strong customer satisfaction ratings with wellness program focus
  • Aetna - Competitive premiums with CVS Health integration benefits
  • Blue Cross Blue Shield - Wide geographic coverage with varying regional benefits

Prescription Drug Coverage Options

Medicare Part D helps cover prescription medications through stand-alone prescription drug plans (PDPs) or as part of Medicare Advantage plans. These plans, offered by private insurance companies like Cigna and Express Scripts, vary in cost, covered medications, and pharmacy networks.

Each Part D plan has a formulary (list of covered drugs) organized into tiers, with lower tiers having lower copayments. The formulary may change, but your plan must notify you when it does. Understanding the coverage gap (donut hole) is important - this is the temporary limit on what your drug plan will cover. While the coverage gap has narrowed significantly due to healthcare legislation, beneficiaries should still be aware of potential increased out-of-pocket costs during this phase.

What Medicare Doesn't Cover

Despite its comprehensive nature, Medicare doesn't cover everything. Notable exclusions include most dental care, eye exams related to prescribing glasses, dentures, cosmetic surgery, acupuncture, hearing aids, and routine foot care. Long-term care (also called custodial care) is perhaps the most significant gap in Medicare coverage.

For services not covered by Medicare, beneficiaries have several options. Medicare Supplement Insurance (Medigap) policies, sold by private companies like Mutual of Omaha, help pay some remaining costs. Many Medicare Advantage plans offer additional benefits beyond Original Medicare. For dental, vision, and hearing care specifically, standalone insurance plans are available through companies like Delta Dental and VSP.

Conclusion

Understanding what Medicare covers is essential for making informed healthcare decisions. Original Medicare provides solid hospital and medical coverage, while Medicare Advantage plans offer additional benefits with network restrictions. Prescription drug coverage helps manage medication costs, but beneficiaries should be aware of coverage gaps and exclusions. To maximize your benefits, review your coverage annually during open enrollment, consider supplemental insurance for gaps, and stay informed about preventive services covered at no additional cost. By understanding your Medicare coverage options, you can better protect your health and financial well-being.

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This content was written by AI and reviewed by a human for quality and compliance.