What Are the Different Parts, and Do I Need Them?
Medicare has four parts. Each covers different aspects of your healthcare:
- Part A Hospital insurance
- Part B Medical insurance
- Part C Medicare Advantage
- Part D Prescription drug coverage
Medicare parts A and B together are known as original Medicare, and Part D is a supplemental drug coverage program. Part C, Medicare Advantage, is an alternative to original Medicare. It provides all of parts A and B, usually Part D, and potentially other benefits. It will be covered in another section.
Medicare Part A: Hospital Insurance
Medicare Part A covers inpatient hospital care, skilled nursing care, hospice care, and some home healthcare services.
You may want to sign up for Medicare Part A as soon as you turn 65, even if you (or your spouse) have health insurance from a job. Some employers require you to take Part A when you’re eligible for it — and they may not cover your healthcare costs if you don’t. Just know that you can’t contribute to a health savings account (HSA) if you have Part A, so you should stop contributing about six months before you apply.
Medicare Part B: Medical Insurance
Medicare Part B covers doctors’ visits, outpatient care, medical equipment, and preventive services, such as annual checkups, glaucoma screenings, mammograms, vaccines, and screenings for various cancers.
You can choose to sign up for Part B after you (or your spouse) stop working or lose health insurance coverage. You have eight months to sign up without paying a penalty. If you have health insurance through an employer, you should check with them to see whether you have to enroll in Part B, since some employers require their employees to take Part B as soon as they’re eligible.
If you don’t have other insurance, you must sign up for Part B as soon as you’re eligible, or you will have to pay a penalty: 10 percent for each year you could have had Part B but didn’t enroll. You have to pay this penalty for as long as you have Part B.
Medicare Part D: Prescription Drug Coverage
Medicare Part D covers the cost of prescription medications and certain vaccines.
Enrollment in Part D is voluntary, but unless you have additional health insurance coverage — from an employer, for example — you’ll likely want to sign up. Part D can help offset the cost of prescription drugs, and delaying your enrollment can result in a permanent financial penalty (an extra 1 percent per month).
