Understand the parts of Medicare: A, B, C, D
Original Medicare: Parts A and B
Medicare Part A covers:
- Inpatient care in hospitals, skilled nursing facilities, and hospice care
- Home healthcare
Most people don’t need to pay a Part A monthly premium because they contributed into Social Security.
Medicare Part B covers:
- Doctors’ services
- Other outpatient care
You pay a monthly premium for Part B based on income. The purchase of Part B is optional, but you may face a late enrollment penalty if you do not sign up when you are first eligible for Medicare.
Medicare Parts A and B do not cover:
- Custodial care (help with bathing, dressing, eating, and using the bathroom) unless it is part of skilled nursing or hospice care
- Long-term care
- Orthopedic shoes
- Most prescription drugs
- Syringes or insulin, except insulin used with an insulin pump
- Care you receive while traveling outside the United States
Medicare Advantage: Part C
Medicare Part C, also known as Medicare Advantage, is offered by private insurers. Medicare Advantage plans may:
- Simplify your coverage, with only one plan and one card
- Offer more benefits than Original Medicare
- Have different copays and coinsurance than Original Medicare
- Offer limits on out-of-pocket costs for some services
- Provide Part D prescription drug coverage (see below)
- Use provider networks, which means that you will generally have lower costs if you use doctors and hospitals within the plan’s network
- Charge a monthly premium in addition to the Part B premium
Prescription Drug Coverage: Part D
Medicare Part D is offered by private insurers for prescription drugs not covered under Medicare Parts A or B. Part D is optional, but you may face a late enrollment penalty if you do not sign up when you are first eligible for Medicare. There are two ways to get Part D coverage:
- As a stand-alone Medicare prescription drug plan
- As part of a Medicare Advantage plan
Your drug benefit includes two stages.
In Stage 1, your prescription copays and coinsurance count toward your $5,030 coverage limit. And if you're like 85% of BCBSRI Medicare Advantage members in 2022, you won't reach that limit, remaining in Stage 1 all year.
If you do exceed the Stage 1 coverage limit, your benefit would enter the Stage 2 coverage gap, otherwise known as the “donut hole.” Only about 15% of members entered Stage 2 in 2022. In Stage 2, you would be responsible for 25% of your drug costs up to $8,000 for the year.
It is not likely that you will exceed the Stage 2 limit. But if you do, and you have a BCBSRI Medicare Advantage plan, BCBSRI will pay the remainder of your drug costs, which means you would pay $0 for the rest of the year. (This is a change from previous years, when you would have been responsible for 5% of what was known as catastrophic coverage.)
Medicare Supplement (Medigap)
Medicare Supplement plans offer coverage that fills the gaps in Original Medicare (Parts A and B). These Medigap plans are offered through private insurers. Medigap plans may cover part or all of the deductibles, copays, and coinsurance under Original Medicare. They offer the flexibility of being able to go to any Medicare participating provider. With Medigap plans, you:
- Must have Original Medicare (Parts A and B)
- Must continue to pay the Part B monthly premium
- Cannot be enrolled in a Medicare Advantage plan
- Can enroll in a Medicare Part D prescription drug plan separately