Medicare is a health insurance program overseen by the federal government. When you turn age 65, you are entitled to Medicare as long as you are a U.S. citizen or permanent legal resident of the U.S. who has lived here at least five years.
There are four “parts” to Medicare, and it’s important that you know what each part covers. You’ll hear and read a lot about these, especially Part A, Part B, and Part D. (You’ll hear about Part C, too, but the name “Medicare Advantage” is more commonly used for Part C plans).
In addition to the summary about each part below, you can learn even more about Medicare by requesting or downloading the government’s booklet, Medicare & You, which is published and updated every calendar year. The booklet is free.
What are Medicare’s Four “Parts”?
Part A is coverage for inpatient hospital stays and/or care at a skilled nursing facility. In most cases, people do not have to pay for Part A protection.
Part B is medical coverage for services that include doctor visits, outpatient procedures, preventative screenings, check-ups and other medical services other than inpatient hospital stays and care at skilled nursing facilities. People do have to pay a monthly premium for Part B protection, and that premium is set by the federal government each year.
Part C is a special type of Medicare coverage known as “Medicare Advantage” coverage. These types of plans are offered by various insurance companies under the government’s rules and guidelines. Part C “Medicare Advantage” plans combine the Part A and Part B coverage (and sometimes Part D coverage, too). People who choose Part C plans normally are required to use a network of hospitals, doctors and other providers in order to receive the plans’ maximum coverage. Additionally, as services are received, Part C recipients normally have to pay co-payments, co-insurance and other expenses.
Part D covers prescription drugs. A Part D plan is optional for people who are Medicare-eligible. Part D plans are offered by various insurance companies under the government’s rules and guidelines. People with Part D must pay a monthly premium for this coverage, and the amount of the premium will vary from one company to the next.
What are Medicare Supplements?
Medicare does not cover everything when it comes to health care services. A Medicare Supplement addresses the differences (gaps) between what the hospital or doctor charges and what Medicare is willing to pay. For this reason, Medicare Supplements are also known as Medigap plans.
Because Medicare’s Parts A and B do not cover everything, the government allows qualified insurance companies to offer Medicare Supplement coverage. This type of coverage is optional, and people will pay a monthly premium (set by the insurance company) to get this added protection.
There are numerous supplement plans with varying levels of coverage. The companies that offer supplement plans are not required to offer all of the different ones set by the government. Farm Bureau Health Plans, for example, offers eight of the ten standardized Medicare Supplement plans.
Though it can be confusing with the four “parts” of Medicare (Part A, B, C and D), the supplement plans are also known by alphabetical names. Rather than being known as “parts,” however, they are known as “plans,” and these are the eight Farm Bureau Health Plans offers:
Find out more about Farm Bureau Health Plans Medicare Supplement plans.
Does Medicare cover prescription drugs?
Prescription drugs are covered if you opt to purchase a Part D plan. Purchase of a Part D plan is optional. The monthly premium for a Part D plan is set by each company that offers plans under the rules and guidelines set by the federal government. To get a Part D plan, people must have Medicare Part A and/or Part B.
Not everyone needs a Part D plan. Some people on Medicare don’t need one because they already have other drug coverage, such as through a current or former employer. Enrollment in Part D is voluntary. Although enrollment in a Part D plan is not required, consider enrolling in a plan when you are initially eligible for Medicare.
A late enrollment penalty may be assessed if you decide to join Part D at a later date, unless you have had creditable coverage since you first became eligible for Medicare. This late enrollment penalty will increase your out-of-pocket costs.
Because each person’s prescription drug needs are unique, Medicare has made the process easier by offering an online Plan Finder tool at medicare.gov.
Find out more about Members Health Insurance Part D plans.