Medicare 101: A Guide

If you're new to Medicare, it can feel overwhelming at first. But don’t worry—understanding Medicare isn’t as complicated as it may seem! Here’s a simple breakdown of the four key parts of Medicare—Parts A, B, C, and D—to help you get started.

What is Medicare?

Medicare is a federal health insurance program primarily for people who are 65 or older. However, younger individuals with certain disabilities or specific health conditions, such as End-Stage Renal Disease (ESRD), may also qualify. Medicare is divided into different "parts," each covering specific healthcare services and work together to provide you with medical coverage. Let's take a closer look at what each part covers.

Medicare Part A: Hospital Insurance

Medicare Part A is often referred to as "hospital insurance." This part helps cover:

• Inpatient hospital stays

• Skilled nursing facility care (for recovery after a hospital stay)

• Hospice care

• Some home healthcare services

Most people don’t pay a monthly premium for Part A if they or their spouse have worked and paid Medicare taxes for at least 10 years. However, you may be responsible for a deductible and coinsurance when using these services.

When you might use Part A: If you’re hospitalized or need care in a skilled nursing facility after an illness or surgery, Medicare Part A helps cover many of the costs.

Medicare Part B: Medical Insurance

Medicare Part B is known as "medical insurance." It helps cover:

• Doctor visits

• Outpatient care

• Preventive services (like flu shots and screenings)

• Lab tests

• Medical equipment (like walkers or wheelchairs)

Unlike Part A, you typically pay a monthly premium for Part B. The standard premium in 2024 is $174.70, though it could be higher if your income is above a certain threshold. Additionally, Part B has an annual deductible and you may also pay 20% of the cost of most services after you've met that deductible.

When you might use Part B: Anytime you visit your doctor, need a medical test, or require outpatient treatments like physical therapy.

Medicare Part C: Medicare Advantage Plans

Medicare Part C, also called Medicare Advantage, offers an alternative way to get your Medicare coverage through private insurance companies. These plans work similarly to employer-provided health plans and offer HMOs and PPO based plans. They often have a network of doctors and hospitals, and you may need to use these providers to receive the lowest costs. Medicare Advantage plans must cover everything that Original Medicare covers, but many plans also offer additional benefits, such as:

• Simplicity of having one card for your medicare insurance instead of 1-3 cards

• Prescription drug coverage included

• Some dental, vision, and hearing benefits

• Free gym memberships is often included

• Wellness services and over-the-counter drug allowances

However, Medicare Advantage plans do come with some potentially large downsides that are important to consider:

• Network Restrictions: Most plans (especially HMOs) require you to use doctors and hospitals within a network. Going outside the network may result in higher costs or no coverage, limiting your choice of providers.

• Referral Requirements and potential denials: Some plans require referrals to see specialists, adding an extra step to accessing care (Original Medicare and supplement plans does not require referrals).

• Cost Sharing: While premiums may be low, you may face copayments, coinsurance, and deductibles for services like doctor visits, hospital stays, or outpatient procedures. These costs can add up, especially for frequent medical needs.

• Limited Availability of Extra Benefits: Extra benefits (like dental, vision, or hearing) vary by plan and often change every year, and the coverage for these services may be limited or have high out-of-pocket costs.

• Geographic Limitations: Many Medicare Advantage plans are regional, meaning that coverage is often limited to your specific service area. If you move or travel frequently, your coverage may not be as accessible compared to Original Medicare, which is accepted nationwide.

• Plan Changes every year: Unlike Original Medicare and supplement plans, Medicare Advantage plans can change their benefits, provider networks, and premiums each year. You’ll need to review your plan annually during Medicare’s Open Enrollment to make sure it still meets your needs.

When you might choose Part C: If you want additional benefits beyond Original Medicare or want to consolidate your healthcare into one plan and don’t mind the limits of their networks, a Medicare Advantage plan might be for you.

If you want to sign up for a prescription drug plan, we can help you find a plan that fits your specific needs. Call us at 405-215-9656 or email at julie@asksma.org

Medicare Part D: Prescription Drug Coverage

Medicare Part D helps cover the cost of prescription drugs and is available through private insurance companies. You can add a Part D plan to your Original Medicare (Parts A and B) or choose a Medicare Advantage plan that includes drug coverage.

Part D plans cover both brand-name and generic drugs. Each plan has its own list of covered medications, called a formulary, and different cost-sharing structures, such as copayments and coinsurance. One important note is the Part D late enrollment penalty: If if you don’t enroll when first eligible and go 63 days or more without drug coverage, a penalty of 1% of the national average Part D premium for every month without coverage is added to your premium. This penalty is permanent and lasts as long as you have Part D, so it’s important to enroll in a plan when you’re first eligible to avoid the extra cost.

Key Points About Part D:

• You must choose and enroll in a Part D plan separately if you stay with Original Medicare.

• It’s important to check each plan’s formulary to ensure your medications are covered.

• Part D premiums vary by plan, and you’ll also pay a portion of the costs for your medications.

When you might need Part D: If you take prescription medications or think you might in the future and are not enrolled in a Medicare Advantage plan, then enrolling in a Part D plan can help protect you from high drug costs and want to avoid the Part D late enrollment penalty. Note: you cannot have a part d prescription plan if you have a medicare advantage plan.

If you want to sign up for a prescription drug plan, we can help you find a plan that fits your specific needs. Call us at 405-215-9656 or email at julie@asksma.org

Medicare Supplement Plans: AKA Medigap

Medicare Supplement plans, work alongside Original Medicare (Parts A and B) by helping to cover out-of-pocket costs like copayments, coinsurance, and deductibles that Medicare doesn’t cover overing nearly complete coverage. These plans can help reduce your healthcare expenses, offering more predictable medicare expenses. Some of the pros of supplement plans include:

1. freedom to see any doctor or specialist who accepts Medicare nationwide,

2. no need for referrals,

3. the ability to keep your coverage when traveling within the U.S

4. added foreign travel coverage.

However, supplement plans doesn’t cover prescription drugs, so you’ll need a separate Part D plan for medications.

If you want to sign up for a Medicare supplement plan, we can help you find a plan that fits your specific needs. Call us at 405-215-9656 or email at julie@asksma.org

How Do These Parts Work Together?

• Original Medicare is made up of Part A and Part B. These are the foundation of Medicare, covering hospital and medical care. However, Original Medicare doesn’t cover everything, such as prescription drugs, dental, vision, or hearing care.

• Medicare Advantage (Part C) combines Parts A and B and usually includes prescription drug coverage. It’s a one-stop option for your Medicare coverage but has its downsides.

• Part D is prescription drug coverage and can be added to Original Medicare if you need help covering medication costs.

• Medicare Supplement Plans work with Original Medicare to help cover the gaps that Original Medicare doesn’t cover. These plans cover the costs like copayments, coinsurance, and deductibles that Medicare doesn’t pay and greatly reduce your out-of-pocket expenses for a more financially stable, headache-free medical coverage.

Do I Need All the Parts?

Not necessarily and you actually can’t have all of them! Most people will have Parts A and B as their basic coverage. Most people choose one of two routes:

1. They stay with Original Medicare and choose to add a Medicare supplement plan to limit their out-of-pocket expenses as well as a Prescription drug plan to cover their prescription costs. Note that you do not have to add a Medicare supplement or a prescription drug plan, but most people do.

2. You can then choose to add on a Medicare Advantage plan (Part C) which often includes a prescription drug plan.

Note that with either option, you have to continue paying your Medicare Part B monthly premium of $185 (in 2025).

Wrapping it Up

Medicare may seem complex, but once you understand how the different parts work, it becomes much easier to navigate. Part A covers hospital stays, Part B covers doctor visits, Part C bundles your benefits into one plan, Part D helps with drug costs and Medicare Supplement plans help cover the costs Part A and Part B don’t cover. Whether you’re just turning 65 or helping a loved one understand their options, knowing the basics of Medicare’s parts is a great place to start!

If you have more questions or need help picking the right plan, feel free to reach out to me. I'm here to make the process easy and help you find the best coverage for your needs.

Still have questions? Give us a call at 405-215-9656.