Medicare is broken into four parts of health insurance coverage. Medicare Part A is the portion that helps pay for hospital care in addition to hospice, skilled nursing facilities and home-health-care technicians.
Typically, Medicare Part A enrollees do not pay for this portion of coverage because they paid Medicare taxes through employment. Part A is sometimes called “premium-free Part A.”
Individuals who do not qualify for premium-free Medicare Part A may qualify to purchase it. In order to purchase Part A coverage, an applicant must be at least 65 years old, entitled to or enrolling in Part B coverage and a U.S. citizen or legal resident. Disabled individuals under 65 may also purchase Part A coverage if their coverage ended because they returned to work.
Medical Service Coverage
Medicare Part B is used to cover medical necessities such as outpatient care, doctors’ services and other health-care-related services. Preventative medical services also are covered by Medicare Part B, such as prostate exams, mammograms and routine physicals.
Unlike Medicare Part A, all covered individuals pay a monthly premium for Medicare Part B. Anyone over the age of 65 who does not enroll in Medicare Part B upon becoming eligible is required to pay a late fee when finally registering.
Medicare Advantage Plan
Medicare Part C, also known as Medicare Advantage Plan, is offered by private insurance companies that have been approved by Medicare. These plans are like traditional health insurance plans, such as an HMO or PPO, and provide both hospital and medical coverage in one plan. Part C coverage may also include services such as vision, dental, hearing or health and wellness coverage for an additional charge. In addition, most Medicare Part C plans also include prescription drug coverage.
Each insurance company receives a monthly payment from Medicare, and it must abide by the rules established by Medicare. However, the private insurance companies can charge varying out-of-pocket expenses, and the rules for treatment are different among them as well. For instance, some plans may require a referral for treatment by a specialist and others may not.
Prescription Drug Coverage
Medicare Part D is the prescription drug coverage portion of Medicare. Part D is managed by an insurance company or other private Medicare-approved company. Prescription drug coverage is added to the other Medicare parts to complete coverage. If at the time of eligibility–typically 65 years old–an individual does not elect to obtain prescription drug coverage and does not have another source of viable coverage, a late fee will be assessed.