Medicare Part A: Hospital Insurance

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

Medicare Part A is free for most people.

Medicare Part B: Medical Insurance

Part B of Medicare covers medically necessary outpatient sevices and treatments you receive at a doctor’s office, hospital, or clinic. Doctor visits are covered under Medicare Part B and so is preventive care. There is an annual deductible of $185 for Part B medical services. After you have met your deductible Medicare only covers 80% of Part B medical expenses.

You pay a monthly premium to Medicare for your Part B coverage. The standard Part B premium for 2019 is $135.50, but you may pay more if your income is above a certain amount. When Medicare becomes your primary insurance it is essential to sign up Part B. If you want to apply for a Medicare supplement you have to be enrolled in Part A and Part B of Medicare.

Medicare Part C: Medicare Advantage

Part C of Medicare refers to Medicare Advantage Plans (MA Plans). These plans are offered by private insurance companies approved by Medicare. When you enroll in a MA Plan your receive your health care from the insurance company not Medicare. Advangtage Plans offer the same benefits as Original Medicare Part A and Part B but they can apply different rules, cost and restrictions than Medicare does. For example they can require you to get a referral before seeing a specialist.

Medicare Advantage plans have provider networks (HMO or PPO).  If you want to go to a doctor or hospital that is not in the network you could be responsible for all cost unless it is an emergency. When you travel out of state you may be out of network.  Medicare Advantage Plans must include a limit on your out-of-pocket expenses for Part A and Part B services. The maximum out-of-pocket cost for HMO plans in 2019 is $6,700. If you use out of network providers your out of pocket cost may be higher.

Most Medicare Advantage plans include Part D prescription drug coverage. These plans can offer additional benefits that Medicare does not cover such as dental, vision and hearing.  The benefit levels for these extra benefits can vary among MA Plans. If you enroll in a Medicare Advantage Plan you must continue to pay your Medicare Part B premium.

Medicare Part D: Prescription Drug Coverage

Part D of Medicare is the prescription drug benefit that covers outpatient prescription drugs. Part D is offered by private companies that have contracts with the government to offer this coverage. You pay a monthly premium to an insurance company for your Part D plan. You will either pay a copay or a percentage of the drug’s cost. Each Medicare prescription drug plan has a list of covered drugs, called its formulary.  Medicare drug plans place medications in their formulary into Tiers 1-5. The lower the tier, the less you pay for the medication.

Unless you have creditable drug coverage you should enroll in a Part D plan when you first go on Medicare. If you delay enrollment you will have to pay a late enrollment penalty. There are more than 25 prescription drug plans offered in Alabama for 2019.