Understanding Different Types of Medicare Plans

Medicare is a government-funded health insurance program designed for individuals aged 65 and older, as well as younger people with disabilities or End-Stage Renal Disease. Managed by the Centers for Medicare & Medicaid Services, it offers various coverage options to meet diverse healthcare needs.

Medicare comprises four main parts, explained briefly below.

Part A
Often called Original Medicare, Part A helps cover inpatient hospital stays, skilled nursing facility care (excluding long-term care), home health services, and hospice care. The costs are administered by the federal government.

Part B
Part B extends coverage to outpatient services and general medical care. It includes:

Medically necessary services
Essential diagnostics, treatments, and services that meet medical standards.

Preventive services
Vaccinations, screenings, and wellness visits aimed at early illness detection and prevention.

Additionally, Part B covers clinical research, durable medical equipment, ambulance services, mental health outpatient and partial hospitalization, second opinions, and some outpatient prescriptions.

Part C
While Original Medicare covers many costs, some beneficiaries choose a Medicare Advantage Plan, also known as Part C or private Medicare plans. These are offered by private insurers approved by Medicare, providing all Part A and Part B benefits plus extra coverage such as dental, vision, hearing, and wellness programs.

Medicare pays a fixed monthly fee to these private providers, who must follow Medicare’s regulations.

Part D
This component offers prescription drug benefits. Private companies sell Part D plans either as standalone options for those with Original Medicare or bundled with Medicare Advantage. Each plan has a formulary listing covered medications. If a drug isn't included, alternatives include paying out-of-pocket, requesting an exception, or appealing the decision.

Some medicines, like those for weight management or over-the-counter drugs, are not covered by Medicare by law.