Every Part of Medicare: A, B, C, D, And Supplemental Insurances
Updated for September, 2021
Medicare is a massive federal health insurance program developed in the 1960s meant to service the elderly populations in the United States and assist with their healthcare costs as they age. As of 2017, the government spends more than $700 billion every year on Medicare, and more than 55 million citizens—most of them elderly—receive benefits from Medicare.
Knowing the ins-and-outs of Medicare can be confusing. How much will you pay per month? What doctors can you see? How do you enroll? What does each part of the program cover? Let’s answer these questions, starting first with what exactly Medicare is and who it covers.
Unlike Part A, not everyone who has Medicare also has Part B services—largely because there are monthly premiums you will need to pay for Part B.
Where Part A covers healthcare costs concerning inpatient services in hospitals, nursing homes, and other places, Part B covers outpatient services. Services covered by Part B include:
- Visits to specialty doctors
- Preventative services like flu shots, vaccines, or anything that detects an illness “at an early stage”
- Supplies needed to treat medical conditions. These supplies must “meet accepted standards of medical practice”
- Ambulance rides and care
- Getting opinions from another doctor before having surgery
- Participation in clinical research
Unlike Part A, not everyone who has Medicare also has Part B services—largely because there are monthly premiums you will need to pay for Part B. Still, more than 52 million people (above 90 percent of those who could have it) have Part B services as a part of their Medicare plan.
The average premium for someone who made less than $85,000 in a year or $170,000 in a joint filing tax return (according to your last tax filing) is $134 per month, according to the Medicare website. This number can decrease if you’re receiving Social Security benefits or it can increase if you made more than $85,000 in the previous year. There is also a $183 yearly deductible.
These costs may also be higher if you choose to not enroll in Part B services initially but want to enroll in them at a later date. Your premium will be 10 percent higher for every 12 months you aren’t enrolled in Part B.
If after two and a half years (30 months), you decide you want to enroll in Part B services and you’re still making less than $85,000 a year, your premium will jump from what could’ve been $134 a month up to more than $162 a month.
Part B premiums are automatically deducted from Social Security benefits.
At its core, Medicare is a simple system that you automatically qualify for by turning 65, where you pay small premiums to help cover most if not all of your medical costs to help ease the financial burden as you age. But after Part A and B, Medicare can begin to get a little confusing. But don’t worry, because we’re here to break down all the other parts of Medicare to help you choose and understand each plan.
Part C is an option for elderly people already enrolled in Part A and B. Part C is an additional private insurance plan that covers services like vision, dental, and usually prescriptions. (We’ll discuss these more in a moment.)
These plans are called Medicare Advantage plans. You will pay a premium with the private insurance company for the additional services as well as your premium for Part B.
Private plans included in Part C coverage are:
- Health Maintenance Organizations (HMOs)
- Preferred Provider Organizations (PPOs)
- Special Needs Plans (SNPs)
- Medical Savings Accounts (MSAs)
- HMO Point-of Service plans (HMOPOS)
You may add a Part C plan to your existing Medicare coverage because it opens up the kinds of doctors you can visit, the coverage you get, and the prescriptions that are paid. Adding Part C to your plan almost always costs more money, though. Despite this, more than 17 million elderly people enroll in Part C services.
It’s difficult to estimate the average cost of a Part C plan; factors like where you live and how long you’ve had Medicare come into play. But you can visit the Medicare website to get a rough estimate.
The average monthly premium (as of 2017) for prescriptions was $34.
Part D adds prescription drug coverage to your Medicare plan.
Unlike Part A and B, you will need to enroll with a private insurance company approved by Medicare to get your prescriptions. Because of this, there will be a premium on your prescriptions, like Part B.
The average monthly premium (as of 2017) for prescriptions was $34. Some companies will also charge a deductible (no more than $400 in a year), meaning they won’t pay for your prescriptions until the deductible is met. But there are also many insurance companies that offer plans with zero deductible, meaning all you will have to pay is the premium.
This is an extremely beneficial cost for the elderly. Nearly 90 percent of seniors need at least one prescription a month, and more than one-third take five or more prescriptions medications per month.
More than 43 million people have Part D as a part of their plan. Some people don’t have Part D drug coverage because they may be getting it from their Part C Medicare Advantage plan. There is a late-enrollment fee—like Part B—if you choose to enroll in Part D coverage later down the road.
Medigap plans help pay for things like copayments, coinsurance, and deductibles—all things standard Medicare plans don’t cover.
Supplemental Insurance (Medigap)
Here is where private insurance companies start to flood Medicare. As we saw in Part C, there are options to get health insurance from private companies. You pay a premium and/or deductible with those companies on top of your premium for Part B.
You can acquire additional— or supplemental— insurance to help pay many of if not all of the deductibles and extra charges that come with Parts A through D of Medicare. These are called Medigap plans.
Medigap plans help pay for things like copayments, coinsurance, and deductibles—all things standard Medicare plans don’t cover. They also cover some extra services not usually covered by Medicare.
These supplemental plans make it so that you have low out-of-pocket costs while raising your monthly premium. This is different from Part C of Medicare (the Medicare Advantage Plan), which typically has thousands of dollars worth of deductibles with lower monthly premiums. Supplemental plans will also allow you to have a wider range of doctors and services to choose from at the cost of a higher up-front monthly payment.
In order to get any of these following plans, you must have Part A and B of Medicare.
Available Medigap plans are: A, B, C, D, F, G, K, L, M, and N. Each plan covers a varying amount of deductibles, coinsurance payments, copayments, and other medical costs.
The most popular plan is Plan F. Two-thirds of the 13 million-plus people who get Medigap insurance get Plan F. It’s also the most expensive plan, because it covers the most amount of extra payments, including the premiums and coinsurances for part A and B for Medicare, hospital stays for up to 365 days after Medicare doesn’t pay for them anymore, foreign travel insurance, and more.
Enrolling In Medicare
You are automatically eligible for Medicare the day you turn 65 if you are already receiving Social Security or disability benefits.
Typically, you fill out Medicare information—what plan you’re getting, where your Medicare card will be sent to—when you apply for Social Security. You can still be eligible for Medicare if you aren’t eligible for Social Security. If this is the case, you may have a premium attached to Part A of your Medicare coverage.
You can enroll in Medicare over a seven-month period that starts three months before your 65th birthday—so three months before and four months after. This is called the Initial Enrollment Period. If you don’t apply for Part B of Medicare in this time, then there could be late enrollment penalties should you eventually want Part B.
If you choose to receive Medicare before you start to receive Social Security and are within a couple months of turning 65, the process to apply for Medicare is still very easy and can be done by visiting the Social Security website or your local Social Security office.
If you have any questions regarding Medicare, billing, or what plan you currently have, contact the federal Medicare office.