Medicare Part A (Hospital Insurance)

Medicare Part A is a fundamental component of Medicare coverage, designed to help pay for inpatient care in hospitals, skilled nursing facility care, hospice care, and some home healthcare services. Most people do not pay a premium for Part A if they or their spouse paid Medicare taxes while working. Understanding the details of Part A can help individuals better prepare for healthcare expenses associated with hospital and inpatient care.

• Coverage for inpatient hospital stays including semi-private rooms, meals, general nursing, and drugs administered as part of inpatient treatment.
• Skilled nursing facility (SNF) care for a limited time following a qualifying hospital stay.
• Hospice care for terminally ill patients focusing on comfort and quality of life rather than curative treatment.
• Home healthcare services like intermittent skilled nursing care and physical therapy for homebound patients under a doctor's care.
• Blood transfusions after the first three pints of blood.

For most people, Part A coverage is premium-free. However, there are cost-sharing requirements:

• Inpatient hospital deductible: $1,632 per benefit period in 2025.
• Hospital coinsurance: $0 for the first 60 days; $408 per day for days 61–90; $816 per "lifetime reserve day" after day 90 (up to 60 days over a lifetime).
• Skilled nursing facility coinsurance: $204 per day for days 21–100 in a benefit period; $0 for days 1–20.
• Hospice care usually has no cost, but a small copayment may apply for prescription drugs and respite care.

Automatic enrollment occurs for individuals who are receiving Social Security or Railroad Retirement Board benefits at least four months before turning 65. Others may need to enroll manually during their Initial Enrollment Period, which starts three months before turning 65 and ends three months after. Special enrollment periods may apply for those who delayed enrollment due to continued employer coverage.

• Inpatient hospital care including operating room services, laboratory tests, X-rays, and rehabilitation services.
• Post-acute care in a skilled nursing facility following a qualifying hospital stay of at least three days.
• Hospice services for terminal illness including medical equipment, supplies, and grief counseling for the patient’s family.
• Limited home health services for patients requiring intermittent skilled care under a physician’s orders.

To qualify for premium-free Part A, an individual must have worked and paid Medicare taxes for at least 10 years (40 quarters) or be married to someone who has. Individuals under 65 may qualify based on disability or diagnosis of End-Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS). Those without sufficient work history may still purchase Part A by paying a monthly premium. While Part A provides broad coverage for inpatient services, it does not cover outpatient services, private-duty nursing, personal care items, or long-term custodial care. It is important to pair Part A with other Medicare coverage like Part B (Medical Insurance) and Part D (Prescription Drug Coverage) to have more comprehensive protection. Beneficiaries should review coverage details annually, especially if their healthcare needs change or if they anticipate hospital or skilled nursing facility care.

Medicare Part B (Medical Insurance)

Medicare Part B covers outpatient medical services such as doctor visits, preventive care, lab tests, and durable medical equipment. It's a critical part of Original Medicare that ensures ongoing access to physicians and healthcare providers outside of hospital settings.

• Doctor office visits, including primary and specialist care.
• Preventive services like annual wellness visits, flu shots, and cancer screenings.
• Outpatient diagnostic tests: blood work, MRIs, CT scans, X-rays.
• Durable Medical Equipment (DME) such as wheelchairs, walkers, and oxygen supplies.

The standard monthly premium for Part B in 2024 is approximately $174.70, although higher-income individuals may pay more. There is an annual deductible (about $240 in 2024), after which patients typically pay 20% coinsurance for most services. Automatic enrollment occurs if you're already receiving Social Security benefits. Otherwise, you must enroll manually during your Initial Enrollment Period (IEP), starting three months before turning 65. If you delay enrolling in Part B and do not have other credible coverage, you'll pay a 10% premium penalty for every 12-month period you were eligible but not enrolled. This penalty is typically permanent. Part B is essential for access to necessary outpatient services and preventive care, reducing long-term healthcare costs by identifying health issues early through routine screenings and diagnostics.

Medicare Part C (Medicare Advantage)

Medicare Part C, commonly known as Medicare Advantage, is a comprehensive alternative to Original Medicare, provided by private insurance companies approved by Medicare. These plans bundle Part A (hospital insurance) and Part B (medical insurance) coverage, and many also include Part D (prescription drug coverage). Medicare Advantage Plans often offer additional benefits not covered by Original Medicare, such as vision, dental, hearing, fitness memberships, over-the-counter allowances, and wellness programs.

• All-in-one plans that combine hospital, medical, and often drug coverage.
• Extra benefits such as dental cleanings, eye exams, hearing tests, fitness programs, and transportation to medical appointments.
• Plans operate on network systems like HMOs (Health Maintenance Organizations) or PPOs (Preferred Provider Organizations).
• Many plans offer $0 premium options, although the standard Part B premium must still be paid.
• Out-of-pocket maximums protect against catastrophic health expenses.
• Some plans include worldwide emergency coverage when traveling.

Medicare Advantage Plans vary in cost based on the insurer and region. While premiums can be as low as $0, copayments, coinsurance, and deductibles apply. In 2024, the average Medicare Advantage premium is projected to be about $18 per month. All plans set an annual maximum out-of-pocket limit for services, capping expenses to protect beneficiaries from excessive costs. Additional services like vision and dental may have separate copayments or limits on coverage. Enrollment is available during the Initial Enrollment Period, which starts three months before turning 65 and extends three months after. Additionally, individuals can switch or enroll during the Annual Enrollment Period (October 15 - December 7). Special Enrollment Periods (SEPs) allow changes outside these windows due to life events like moving, loss of other coverage, or qualifying for Medicaid.

• HMO Plans: Require use of network providers and a primary care doctor for referrals.
• PPO Plans: Allow use of out-of-network providers at a higher cost; no referrals needed.
• Private Fee-for-Service (PFFS) Plans: Set their own provider payment terms; flexibility in choosing providers who accept the plan’s terms.
• Special Needs Plans (SNPs): Target individuals with specific diseases or dual eligibility for Medicare and Medicaid.

• Pros: One-stop coverage, additional benefits, fixed out-of-pocket limits, potential for lower costs, and preventive services.
• Cons: Limited to network providers, potential referral requirements, regional availability, and possible changes in plan benefits each year.

To be eligible, you must be enrolled in both Medicare Part A and Part B and reside in the plan's service area. Unlike Medigap plans, Medicare Advantage does not require medical underwriting except for individuals with End-Stage Renal Disease (ESRD), though rules have changed and many plans now accept ESRD beneficiaries. When choosing a Medicare Advantage Plan, it is essential to evaluate the provider network, out-of-pocket costs, and coverage benefits. Confirm that your preferred doctors and hospitals are in-network and that your prescription medications are included if the plan offers drug coverage. Also, keep in mind that benefits can change annually, so it’s important to review plan documents carefully during open enrollment periods to ensure the plan still meets your healthcare needs.

Medicare Part D (Prescription Drug Coverage)

Medicare Part D provides prescription drug coverage to help beneficiaries manage the costs of their medications. These plans are offered by private insurance companies approved by Medicare. Part D can be added to certain other Medicare plans and helps cover the costs of both brand-name and generic prescription drugs. Each plan has its own list of covered drugs, called a formulary, and a network of participating pharmacies. Part D is designed to ensure that beneficiaries have access to a wide range of necessary medications, enhancing their overall healthcare management.

• Helps cover the cost of prescription medications for chronic and acute conditions.
• Available through standalone Prescription Drug Plans (PDPs) or integrated into some Medicare Advantage plans (MAPDs).
• Each plan has a formulary, categorizing drugs into different "tiers" with varying costs based on brand or generic status.
• Plans must cover at least two drugs in each therapeutic category and class to ensure adequate coverage options.
• Access to a nationwide network of approved retail and mail-order pharmacies, ensuring flexibility and convenience.
• Coverage for commonly used vaccines, like shingles and flu shots, under Part D drug benefits.

Costs vary by plan, but typical expenses include a monthly premium, annual deductible, copayments, and coinsurance. In 2024, the maximum deductible allowed is $545. After the deductible is met, you pay a copayment or coinsurance for each prescription. Once total prescription costs exceed an initial coverage limit, beneficiaries enter the "coverage gap" (donut hole), where they pay a higher share until reaching catastrophic coverage. Catastrophic coverage significantly lowers costs for the remainder of the year.

Enrollment opportunities include:

• Initial Enrollment Period (IEP): Begins three months before and ends three months after your 65th birthday.
• Annual Enrollment Period (AEP): October 15 to December 7 each year, during which you can switch, drop, or enroll in plans.
• Special Enrollment Periods (SEPs): Triggered by qualifying events such as moving out of a plan’s service area, loss of credible drug coverage, or eligibility changes due to Medicaid qualification.

• Deductible Phase: Beneficiaries pay the full cost of drugs until meeting their deductible amount.
• Initial Coverage Phase: Plans pay their share of drug costs, and you pay a copayment or coinsurance for covered drugs.
• Coverage Gap (Donut Hole): After reaching a certain spending threshold, you pay 25% of drug costs for brand-name and generic medications.
• Catastrophic Coverage Phase: After out-of-pocket costs hit the catastrophic limit, you pay much lower coinsurance or copayments.

Failing to enroll in a Medicare drug plan when first eligible without other creditable coverage results in a late enrollment penalty. This penalty adds 1% of the national base premium for each full month you went without coverage, and it is added to your monthly premium permanently.

Individuals must be enrolled in Medicare Part A and/or Part B to join a Part D plan and must reside within the plan's service area. Enrollment is not subject to medical underwriting, ensuring access to drug coverage without concern for pre-existing conditions.

When selecting a Part D plan, it’s crucial to evaluate the plan’s formulary to ensure your medications are covered and check if your preferred pharmacies are in-network. Plans can vary significantly in premium costs, coverage options, and cost-sharing structures. Additionally, formularies and pharmacy networks can change annually, making it important to review your coverage options during the Annual Election Period each year. Individuals with limited income and resources may qualify for the Extra Help program, which reduces or eliminates Part D costs, including premiums, deductibles, and copayments. Staying proactive and reviewing your options regularly can help ensure you maintain affordable and comprehensive drug coverage tailored to your specific health needs.

Medigap (Medicare Supplement Insurance)

Medigap policies are standardized plans offered by private insurers to help cover out-of-pocket costs not paid by Medicare, such as deductibles, copayments, and coinsurance. These plans are labeled A through N, each providing a different combination of benefits. Medigap policies offer greater predictability in healthcare costs and are ideal for individuals seeking additional financial protection. These plans are especially beneficial for those who travel frequently within the U.S., as they are widely accepted wherever Medicare is accepted.

• Standardized plans labeled A through N, offering varying levels of coverage.
• Freedom to choose any doctor or hospital that accepts Medicare patients, nationwide.
• Guaranteed renewable policies, as long as premiums are paid on time.
• No network restrictions, offering flexibility and convenience for healthcare access.
• Some plans offer high-deductible options to lower monthly premium costs.
• Certain plans cover emergency healthcare services when traveling outside the U.S.

Premiums for Medigap policies vary based on factors like age, gender, location, tobacco use, and the insurer’s pricing method (community-rated, issue-age-rated, or attained-age-rated). In 2025, the high-deductible versions of Plans F and G have an annual deductible of $2,870. Plans K and L have out-of-pocket limits of $7,220 and $3,610, respectively. Once these limits are met, the plans pay 100% of covered services for the remainder of the year. Keep in mind that Medigap premiums are in addition to your Medicare Part B premium.

The optimal time to enroll is during your six-month Medigap Open Enrollment Period, which starts when you are 65 or older and enrolled in Medicare Part B. During this period, you have a guaranteed right to buy any Medigap policy offered in your state, regardless of your health status or pre-existing conditions. After this period, insurers may use medical underwriting to decide if they want to offer you a policy and at what price. Some states have additional open enrollment periods or protections for beneficiaries under 65.

• Plan G: Provides comprehensive coverage, including Part A deductible, Part B excess charges, and skilled nursing facility care coinsurance, excluding only the Part B deductible. A high-deductible version is available with a $2,870 deductible in 2025.
• Plan N: Offers lower premiums but requires copayments for doctor visits and emergency room visits, and does not cover Part B excess charges.
• Plan K: Covers 50% of out-of-pocket costs, with an annual limit of $7,220 in 2025, offering basic coverage at lower premiums.
• Plan L: Covers 75% of out-of-pocket costs, with an annual limit of $3,610 in 2025, providing a balance between premium savings and coverage.
• Foreign Travel Emergency: Some Medigap plans (like C, D, F, G, M, and N) cover 80% of the cost of emergency care received outside the U.S., after meeting a $250 annual deductible, up to a $50,000 lifetime limit.

To purchase a Medigap policy, you must be enrolled in both Medicare Part A and Part B. Medigap policies are not available to individuals enrolled in Medicare Advantage Plans. Some states extend Medigap policy offerings to individuals under 65 who qualify for Medicare due to disability or End-Stage Renal Disease (ESRD), but availability and options vary by state. Policies do not cover services like long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.

When selecting a Medigap policy, consider your healthcare needs, travel habits, and budget. Premiums for the same plan letter can vary significantly between insurance companies, so comparing prices is essential. Medigap policies do not include prescription drug coverage; if you need drug coverage, you should enroll in a separate Medicare Part D plan. Additionally, some insurers offer discounts for non-smokers, married couples, or electronic payment enrollments. Reviewing your healthcare needs annually will help ensure your Medigap policy continues to offer the protection and flexibility you require.

Special Needs Plans (SNPs)

Special Needs Plans (SNPs) are a type of Medicare Advantage plan specifically designed for individuals with certain diseases or characteristics. These plans tailor their benefits, provider choices, and drug formularies to best meet the specific needs of the groups they serve. SNPs ensure coordinated care and often include specialized networks and care management programs to enhance healthcare outcomes.

• Tailored for individuals with chronic or disabling conditions, those eligible for both Medicare and Medicaid, or those residing in institutions.
• Coordinated care models that include specialized provider networks and case management services.
• Prescription drug coverage is included in all SNPs (integrated Part D coverage).
• Focused on managing and treating chronic conditions effectively through coordinated care teams.
• Customized benefit packages, including preventive services and wellness programs.

Costs vary based on the plan and service area. Many SNPs have low or even $0 monthly premiums, but enrollees must continue to pay the standard Medicare Part B premium. Cost-sharing (like copayments and coinsurance) can be lower for services that are highly utilized by the target group. Medicaid may also cover some or all cost-sharing for individuals eligible for both Medicare and Medicaid. Enrollment is open to individuals who meet the specific eligibility criteria for the SNP type:

• Chronic Condition SNPs (C-SNPs): For those with severe or disabling chronic conditions like diabetes, heart disease, or chronic lung disorders.
• Dual Eligible SNPs (D-SNPs): For individuals eligible for both Medicare and Medicaid benefits.
• Institutional SNPs (I-SNPs): For those living in an institution like a nursing home or who require nursing care at home.

Special Enrollment Periods are available throughout the year for those who newly qualify for an SNP.

• Specialized care coordination services tailored to members' specific health needs.
• Integrated care for medical, behavioral, and long-term support services.
• Access to a network of providers who specialize in treating the SNP's target condition or population.
• Comprehensive prescription drug coverage built into the plan with coverage tailored to common medications for the condition.

Eligibility varies based on the type of SNP:

• C-SNPs require a diagnosis of the qualifying chronic condition.
• D-SNPs require dual eligibility for both Medicare and Medicaid.
• I-SNPs require residence in a qualified institution or require nursing care at home.

All SNP members must be enrolled in both Medicare Part A and Part B and live in the plan’s service area. When considering an SNP, review the provider network and care management benefits carefully. Not all providers accept SNP plans, so ensure your preferred doctors and specialists are in-network. Pay attention to the plan’s drug formulary to make sure it covers your medications. Individuals with changing health needs or eligibility status should re-evaluate their plan options during open enrollment or if they qualify for a Special Enrollment Period. SNPs offer a highly specialized option for those who qualify, providing significant support in managing complex or chronic health conditions.

Medicare Savings Programs (MSPs)

Medicare Savings Programs (MSPs) are state-administered programs designed to assist individuals with limited income and resources in paying for their Medicare costs. These programs play a vital role in reducing financial barriers to healthcare access by covering expenses such as premiums, deductibles, coinsurance, and copayments. MSPs are essential for supporting low-income Medicare beneficiaries and can automatically qualify individuals for Extra Help with Medicare Part D prescription drug costs, providing further financial relief.

• Assists with Medicare Part A and/or Part B premiums, deductibles, coinsurance, and copayments.
• Leads to automatic qualification for Extra Help (Low-Income Subsidy) for Medicare Part D prescription drug coverage.
• Federally guided but state-administered, with some variations depending on local programs and resources.
• No fees for applying or participating in MSPs.
• Programs use income and asset testing to ensure support reaches the most financially vulnerable individuals.
• Eligibility reviews typically occur annually to maintain continued benefits.

• Qualified Medicare Beneficiary (QMB) Program: Covers Medicare Part A and Part B premiums, deductibles, coinsurance, and copayments. Beneficiaries are protected from balance billing by healthcare providers.
• Specified Low-Income Medicare Beneficiary (SLMB) Program: Helps pay only Medicare Part B premiums, making healthcare more affordable.
• Qualifying Individual (QI) Program: Similar to SLMB but with funding limitations; applications are accepted on a first-come, first-served basis each year.
• Qualified Disabled and Working Individuals (QDWI) Program: Covers Medicare Part A premiums for certain disabled individuals who have returned to work and lost their premium-free Part A coverage.

MSPs cover costs that would otherwise pose financial strain on low-income Medicare beneficiaries. There are no premiums, deductibles, or enrollment fees for the MSP itself. Federal guidelines suggest 2025 income limits around 135% of the federal poverty level (FPL) for SLMB and 120% FPL for QMB programs, but some states with more generous Medicaid programs may offer higher thresholds. Assets are evaluated but typically exclude primary residences, one vehicle, burial funds, and personal belongings.

Applications for MSPs are processed through the state Medicaid office or a designated local agency. There are no restricted enrollment periods, allowing year-round applications. Required documents generally include proof of Medicare enrollment, income verification (pay stubs, Social Security benefit statements), and resource verification (bank statements, investment records). Upon approval, MSP enrollees are often automatically enrolled in the Extra Help program, which provides additional savings on Part D drug costs.

Eligibility is based on both income and assets:

• Income limits vary by program and are calculated as a percentage of the federal poverty level.
• Resource limits typically include savings and investments but exclude certain assets like a home or car.
• Applicants must be enrolled in or eligible for Medicare Part A.
• U.S. citizenship or lawful presence and residency in the state where the application is filed are also required.

Medicare Savings Programs serve as a critical financial safety net for low-income Medicare beneficiaries, reducing healthcare cost burdens and improving access to necessary services. Each state may have slightly different rules and income/resource limits, so it’s advisable to check with local agencies for the most up-to-date information. Assistance from State Health Insurance Assistance Programs (SHIPs) and non-profit organizations can simplify the application process. Regular annual reviews are important because changes in income or resources can affect eligibility and benefit levels. Staying informed and proactive ensures continued access to these vital benefits.