The Parts of Medicare

Medicare is health insurance for people 65 and older. It also can cover some people under 65 with certain disabilities. And it covers people of any age with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant).

Your Medicare coverage choices may include:

• Original Medicare (Parts A and B)
• Medicare Advantage (Part C)
• Medicare Prescription Drug Plan (Part D)

A Medicare Supplement Insurance Plan can be added to cover eligible health care costs that Medicare Parts A and B don’t cover.

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Part A typically covers:

• Inpatient care in a hospital
• Inpatient care in a skilled nursing facility (not custodial or long-term care)
• Hospice care
• Home health care

Part B typically covers:

• Medically necessary doctors' services
• Outpatient care
• Home health services
• Durable medical equipment and other medical services
• Many preventive services

Medicare Advantage plans are an option for your Medicare coverage. They include Medicare Part A, Part B and may include Part D prescription drug coverage.

In general, Medicare Advantage:

• Includes all Part A and Part B benefits and services
• Usually includes Medicare Prescription Drug Coverage (Part D) as part of the plan
• Is run by Medicare-approved private insurance companies, like Aetna
• May include extra benefits and services not covered by Original Medicare

Plan options

The most common types of Medicare Plans are:

• Health Maintenance Organization (HMO) Plans – Provide coverage through a network of doctors and hospitals. Typically, you must use network providers unless it’s an emergency. If you don’t, your care may not be covered.
• Preferred Provider Organization (PPO) Plans – Provide coverage through a network of doctors and hospitals. In a PPO plan, you can see a doctor in or out of network. Typically, it costs more to get care out-of-network.
• HMO Point-of-Service (HMO POS) Plans – Provides coverage through a network of doctors and hospitals. You may be able to see a doctor out of the network for some services. The POS option provides more choice and flexibility. But some services aren't available outside the network of contracted providers.
• Special Needs Plans (SNP) – A special type of Medicare Advantage Plan that provides more focused health care for specific groups of people, such as those who have both Medicare and Medicaid.

There may be other types of Medicare Plans available.

Part D coverage is available on its own or as part of many Medicare Advantage plans. These plans can also be added to:

• Original Medicare (Parts A and/or B)
• Medicare Supplement Plans (Medigap)
• Some Private Fee-for-Service Plans (PFFS)
• Medicare Medical Savings Account Plans (MSA)
• Some Medicare Cost Plans

Drug Coverage Phases

Medicare has four drug coverage phases:

1. Deductible – This is the first phase of a Part D plan. Your deductible is the amount you must pay before Medicare or the plan begins to pay. This amount can change each year. If your plan doesn't have a deductible, then the initial coverage phase starts at once.
   
   
2. Initial Coverage – You pay a copay (set dollar amount) or coinsurance (percentage of the cost). Your plan covers the rest. This amount can change each year.


3. Coverage Gap – After you and the plan have spent enough to reach the initial coverage limit, you enter the coverage gap or “donut hole.” You may be responsible for paying a larger portion of your drug costs, depending upon the plan.
   
   Medicare plans that include prescription drug coverage often offer different levels of coverage during the gap. Once you spend enough to get out of the coverage gap, you automatically get catastrophic coverage.


4. Catastrophic Coverage – You pay a smaller copay or coinsurance than you did during the initial coverage phase or the coverage gap. This lasts until the end of the plan year.

Medicare Supplement insurance plans help you pay for some of the health care costs not covered by Original Medicare (Parts A and B). This includes deductibles and coinsurance. This lets you see doctors and hospitals who accept Medicare. There are no network restrictions.