Our simplest explanation for Medicare.

*Medicare is a group of insurance plans that work together. It is not one plan. 

 

1. Part A & Part B: Original Medicare

Who: Most people get both of these.

What is it: Part A is technically called "hospital insurance", but it covers a lot of things that aren't in a hospital and it doesn't cover a lot of things that are in a hospital. It is usually free. Part B is technically called "medical insurance" or "Supplementary Medical Insurance", but it doesn't cover a lot of things and isn't free (everyone pays a premium that is usually paid through Social Security). 

Bottom line: Medicare A & B (a.k.a. Original Medicare) only covers 80% of your healthcare costs. You really, really, really need to get more than just Medicare A & B or you will be...well, let's just say, get more. 

2. Part C: Medicare Advantage & Part D: Medications

Who: Everyone should get one of these. 

What is it: Original Medicare only covers a portion of costs, so you'll need some additional coverage that comes through Medicare C or Medicare D. There are a lot of pros and cons you should consider when selecting between Medicare C or D.

Bottom line: You should get one of these if you can afford it. If you can't, then you really need to get some of the other types of assistance available to you. 

More on Part C & Part D

2a. Part C: Medicare Advantage

Who: If you want a plan with a cheaper premium that feels similar to your old health insurance.

What is it: Part C (a.k.a. Medicare Advantage or MAP) is one way to go about covering what Original Medicare doesn't cover. Part C functions similarly to the insurance you may have had with your former employer.  

Pros: These plans are more comprehensive and the premiums are affordable.

Cons: The main downside is that you have to go to doctors that are in their network and this can sometimes be limiting. 

The other downside is that deductibles and copays can quickly ratchet up costs. 

Bottom line: Cheaper, comprehensive premiums, with less doctor flexibility. 

2b. Part D & Medigap

Who: If you are a snowbird (a Northerner who moves to a warmer Southern state in the winter) or want a lot of flexibility in which doctor you can go to, then this is likely the better option for you.

What is it: We recommend you go with Part D (a.k.a. Medication) and a Medigap plan. Part D covers your medications and Medigap covers the remaining gaps that A, B, and D have in terms of coverage.

Pros: 90% of doctors take this kind of Medicare package.

Cons: Part D and Medigap are complicated and it requires some time to work through the specifics of your plan.  The premiums can cost more. 

Bottom line: More flexibility in selecting doctors, potential higher premiums, and more complicated to set up.

2c. Other Add-Ons or situations

You may have a unique situation. If you get TRICARE, RRB, COBRA, HSA, FEHBP, Medicaid, SSI, or SSDI, then you will have other considerations to factor in. 

If you are under the age of 65 you will also have other factors to consider.