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Whether your 65th birthday is on the horizon or decades away, it’s critical to understand the different parts of Medicare! This government-sponsored program will play a role in your future health care and retirement decisions. In this guide, we’ll dive into the key aspects of Medicare, including Part A, B, C, and D. We will examine how each Part impacts your healthcare.
Part A
Original Medicare. It comprises two components. In general, Part A covers inpatient hospital care, skilled nursing facility costs, hospice, lab tests, surgery, and some home health care services. Keep in mind that although very few beneficiaries must pay Part A premiums out of pocket, annually adjusted standard deductibles still apply.
Many pre-retirees frequently receive warnings that Medicare covers only a maximum of 100 days of nursing home care, provided certain conditions are met. Part A is the one with these provisions. Under the current Part A rules, you would pay $0 for days 1-20 of care in a skilled nursing facility (SNF). During days 21-100, a $204 daily coinsurance payment may be required of you.
Knowing the limitations of Part A, some people look for other choices when it comes to managing the costs of extended care.
Part B
Part B covers physicians’ fees, outpatient hospital care, certain home health services, durable medical equipment, and other offerings not covered by Medicare Part A.
However, Part B does come with costs that adjust annually. The premiums vary, according to the Medicare recipient’s income level, but the standard monthly premium amount is $174.70, and the yearly deductible is $240 for 2024. Our tax planning approach includes an annual review of your tax returns to prepare for the costs associated with Medicare Parts B and D. This process is particularly crucial as you approach the age of Medicare eligibility or if you are already enrolled in Medicare.
Part C
Sometimes called “Medicare Part C,” Medicare Advantage (MA) plans are often viewed as an all-in-one alternative to Original Medicare. MA plans are offered by private companies approved by the federal government. Although these plans offer standardized minimum coverage, the amount of additional protection varies drastically from one person to the next. This is due to unique provider networks, premiums, copays, coinsurance, and out-of-pocket spending limits. In other words, comparing prices and services offered by different vendors may be the best way to find a MA plan that works for you.
Part D
Part D covers prescription drug plans. While Medicare Advantage plans often offer prescription drug coverage, insurers also sell federally standardized Medicare Part D plans as a standalone product to those with Medicare Part A and/or Part B. Every Part D plan has its own list (i.e., a “formulary”) of covered medications. Visit Medicare.gov to explore the formulary of approved drugs for your Part D plan as well as their prices, organized by tier.
