Understanding How Medicare Works

Most people who qualify for Medicare automatically get Part A coverage without having to pay a premium. Part A mainly includes inpatient hospital care, skilled nursing facility care, and home health care after a hospital stay.

Part B covers your medically necessary doctors’ services, outpatient care, and other certain items and services (such as durable medical equipment). A premium for Part B is generally deducted from your Social Security check each month to help pay the cost of this coverage.

Medicare Parts A and B are often referred to as “Original Medicare.”

You have the option to join a Part C plan instead of Original Medicare. This coverage is provided by a private health plan called a Medicare Advantage (MA) plan. These health plans are contracted with and approved by Medicare to care for you. The coverage includes everything covered under Part A and Part B, except hospice care (original Medicare continues to cover hospice care). Often, the plans include Part D prescription benefits as well. The MA plans may also include additional benefits not available with Original Medicare, such as vision care, gym membership, dental care, and more. The type and scope of supplemental benefits vary by plan and in certain cases, members may need to use doctors in the plan’s network in order to obtain covered benefits.

If you join a Part D plan, it can help lower your prescription drug costs that are not covered by Medicare. Part D is an extra plan provided by private insurance companies approved by Medicare. This coverage is available as a stand-alone plan that you add to your Original Medicare coverage. A Part D plan may be included in a Medicare Advantage plan.

Part A and Part B do not cover 100% of your medical and hospital costs. Like some other health insurance coverages, you may be required to meet a deductible and then may require you to pay a portion of the cost of your care (depending on the services). Original Medicare also does not provide coverage for prescription drugs. For this, you need a stand-alone plan that may charge an additional monthly premium. In some instances, you may have Medicaid, military retiree, or employer or union coverage that pays some or all of the costs that Original Medicare.

As a Medicare-eligible person, you will likely need and use a combination of Original Medicare and Medicare Supplemental Coverage (also known as Medigap), depending on your health. This coverage can help pay for expenses like copays and other out-of-pocket costs that Original Medicare does not cover. Private insurance companies offer these plans and set their own prices for coverage. This coverage could require an additional monthly premium.

A Medicare Advantage plan (also referred to as Medicare Part C) includes all the healthcare benefits you are entitled to under Original Medicare and may also include coverage like vision, hearing, dental and prescription drug coverage, or over-the-counter supply allowances. Certain MA plans may cover you for costs only with providers within the plans’ networks and may charge additional premiums and/or other out-of-pocket costs (depending on the particular plan). Medicare Advantage plans have a yearly limit on what you would pay out of pocket for services. Once you reach that limit, you pay nothing for the care provided under Part A and Part B. Medicare Advantage plans can, however, choose not to cover the costs of services that are not medically necessary under Medicare. Medicare Advantage plans contract with the government to provide coverage to you, so you still have Medicare, but you don’t need to use your Medicare card when you obtain medical services. You will present an insurance member card instead.