Medicare 101: Do You Need All 4 Parts?

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Medicare is the United States’ health insurance program. You become eligible for it when you turn 65.

Medicare has four parts.

Part A covers the costs of being in a medical facility. You automatically receive Part A at no cost upon enrollment. If you’re hospitalized, your deductible is $1,216. If your stay lasts longer than 60 days, you pay a portion of each day’s expenses.

Part B covers doctor visits, tests, and procedures. You’re required to enroll in Part B if you don’t have coverage from another source, like an employer’s plan. Part B charges a monthly premium and a deductible, and if you don’t enroll or have other coverage, you pay a penalty. Once you meet your deductible, you pay 20% of Medicare-approved service costs. Most preventative services are free.

Parts A and B do not cover long-term care, which is worth considering since roughly 70% of people over 65 will need it.

Part C, or Medicare Advantage, is an alternative to Medicare. It normally includes all of Parts A and B and a prescription drug plan. Private insurance companies administer Part C and collect your Medicare payment from the government. There may be an extra premium charged, as well.

Part D is prescription drug coverage. It’s required unless you have a prescription drug plan from another source. The monthly premium depends on your income, and it may include a yearly deductible. A gap called the doughnut hole kicks in after you and your plan spend $2,850, and it does not close until after you spend $4,500 out of pocket.

Many people enroll in supplemental Medigap insurance to cut down on the sizable bills they may incur with parts A, B and D.

Read more: Medicare 101: Do You Need All 4 Parts? – Video | Investopedia
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Medicare 101: Do You Need All 4 Parts?

 

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