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Medicare: Understanding the Basics from Part A to Part D
Since 1965, Medicare's two original components have helped cover basic health needs.
The first, known as Part A, focuses on the costs of health care at medical facilities, providing coverage for medically necessary care at hospitals while you're receiving inpatient care. Under some circumstances, it also covers costs for home health services, hospice care, and skilled nursing facilities. However, nursing home costs are covered only for limited purposes and time periods.
Medicare Part B covers the costs of health care outside medical facilities, such as doctors' visits, outpatient procedures, and lab tests. It also helps cover the cost of services related to health care, such as wheelchairs and scooters, oxygen tanks, and ambulance services. In addition to providing coverage for health care needs that qualify as medically necessary, Part B also covers certain preventive-care services, such as screening for heart conditions, diabetes, and certain types of cancer.
In addition to government-provided Parts A and B, Medicare Part C is optional private insurance that Humana (HUM), Aetna (AET), UnitedHealth (UNH), and others provide. Better known as Medicare Advantage Plans, Part C involves paying premiums to those insurers, which then provide coverage for charges that Parts A and B don't pay for. Medicare Advantage Plans vary greatly both in cost and in scope of coverage, so you have to look closely at all your options to make sure they fit what you want from a plan.
Finally, Medicare Part D provides prescription drug coverage. Like Medicare Advantage Plans, Part D plans are offered through private insurance companies, and the coverage that different policies offer can vary widely from insurer to insurer and from plan to plan. In fact, many Part C Medicare Advantage Plans include Part D options within a single package.
Medigap policies can't work with Medicare Advantage Plans. If you have a Medigap policy and join a Medicare Advantage Plan (Part C), you may want to drop your Medigap policy. Your Medigap policy can't be used to pay your Medicare Advantage Plan copayments, deductibles, and premiums.
If you want to cancel your Medigap policy, contact your insurance company. If you leave the Medicare Advantage Plan, you might not be able to get the same Medigap policy back, or in some cases, any Medigap policy unless you have a "trial right."
If you have a Medicare Advantage Plan, it's illegal for anyone to sell you a Medigap policy unless you're switching back to Original Medicare. Contact your State Insurance Department if this happens to you.
If you want to switch to Original Medicare and buy a Medigap policy, contact your Medicare Advantage Plan to see if you're able to disenroll.
If you join a Medicare Advantage Plan for the first time, and you aren’t happy with the plan, you’ll have special rights to buy a Medigap policy if you return to Original Medicare within 12 months of joining.
- If you had a Medigap policy before you joined, you may be able to get the same policy back if the company still sells it. If it isn’t available, you can buy another Medigap policy.
- The Medigap policy can no longer have prescription drug coverage even if you had it before, but you may be able to join a Medicare Prescription Drug Plan (Part D).
- If you joined a Medicare Advantage Plan when you were first eligible for Medicare, you can choose from any Medigap policy.