The Basics of Medicare

There are four parts of Medicare. Knowing how each works can give you more confidence as you start your Medicare journey.

The Basics of Medicare

The Four Parts of Medicare

Medicare consists of four Parts — A, B, C, and D. Each part helps cover specific services.

Original Medicare (Parts A and B)

Original Medicare is the coverage most people think of when they use the term Medicare. It consists of Medicare Part A (hospital coverage) and Part B (medical coverage).

Part A (hospital coverage) includes:

• Inpatient care in a hospital
• Care at a skilled nursing facility after a hospital stay
• Home health care that is ordered by your doctor

Most people do not pay a premium for Medicare Part A. Because of this, you should consider enrolling in Medicare Part A when you turn 65, even if you plan to keep working. But first, find out if your workplace offers a Medicare plan for retirees.

Want to know more about Medicare Part A?

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Part B (medical coverage) includes:

• Services from health care providers outside of a hospital
• Outpatient care, including emergency room, lab, and other services
• Durable medical equipment like walkers, diabetes supplies and other needs prescribed by your doctor
• Preventive services, including a one-time “Welcome to Medicare” preventive provider visit. Plus some vaccines, health screenings and more

Most people pay a monthly premium for Medicare Part B. This is usually deducted from your Social Security benefit. You’ll have a limited time to enroll in Medicare Part B when you retire. After that, you may have to pay a late enrollment penalty.

If you are covered by a High Deductible Health Plan and have a Health Savings Account, signing up for either Part A or Part B while still employed may prevent you from adding funds to your HSA, so make that decision carefully.

Want to know more about Medicare Part B?

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The Other Parts of Medicare

Coverage that goes beyond Original Medicare

In 2003, private health insurers were approved by Congress to offer Medicare benefits. Their plans are known as Medicare Advantage plans, or Medicare Part C. Medicare was also expanded to include a prescription drug benefit called Part D.

Part C and Part D help you avoid some of the out-of-pocket costs Original Medicare doesn’t cover. And they can help make it easier to coordinate your care. So it’s good to consider these valuable options as you start thinking about Medicare.

These important parts of Medicare are provided by companies with a Medicare contract, such as Blue Cross and Blue Shield of Illinois.

Part C (Medicare Advantage Plans)

Medicare Advantage bundles your Original Medicare benefits – plus some important extras – in a convenient all-in-one plan.

These Medicare Advantage plans:

• Usually include Part D prescription drug coverage
• May include additional benefits such as vision, dental, and hearing coverage
• May have a $0 or low monthly premium
• Place a limit on your out-of-pocket costs not covered by Original Medicare each year
• May offer a dedicated network of doctors and hospitals in your area. Some give you the flexibility to choose your own doctors.

You may enroll in Medicare Part C and Part D only during certain periods, including when you first become eligible for Medicare.

Want to know more about Medicare Advantage? Check out these helpful articles:

Part D (Prescription Drug Coverage)

Medicare Part D helps cover the costs of outpatient prescription drugs. It may also pay for some services that Original Medicare does not cover.

Medicare Part D prescription drug coverage is:

• Not included with Original Medicare
• Provided by companies with a Medicare contract, such as Blue Cross and Blue Shield of Illinois
• Available as a standalone plan – or may be included with a Part C Medicare Advantage plan

To be eligible for Part D prescription drug coverage, you must qualify for Part A and/or be enrolled in Part B. If you don’t enroll in Part D when you are first eligible, you may have to pay a penalty if you decide you want this important coverage later.

Want to know more about Medicare Part D? Check out these helpful articles:

Medicare Supplement Insurance Plans

Another option for additional coverage and savings

Medicare Supplement Insurance Plans (also known as “Medigap”) are designed to fill some of the gaps in Original Medicare coverage. They help cover your portion of the out-of pocket costs Original Medicare does not pay.

With a Medicare Supplement Insurance Plan, you have the freedom to choose your doctors, hospitals, and other providers. And you can enroll in a Medicare Supplement Insurance Plan without waiting for a specific enrollment period.

You can enroll in Medicare Supplement Insurance Plans at retirement after you have enrolled in Medicare Part A and Part B.

Medicare Supplement Insurance Plans do not include prescription drug coverage, so many people pair it with a standalone Part D prescription drug plan.

Blue Cross and Blue Shield of Illinois offers a range of Medicare Supplement Insurance Plans to fit a variety of needs.

Understanding the A, B, C & D of Medicare is an important start to your Medicare journey. Stay with Blue^SM for more information and important insights every step of the way.