Created in 1965, Medicare started with just two parts—Part A and Part B. Later on, additional parts—Part C and Part D—were added as the needs of Medicare beneficiaries changed.
It's important to understand that Original Medicare (Part A and Part B) does not cover all of your medical expenses. Learn about other options that are available and why they may be right for you.
Hospital insurance for inpatient stays and more:
- Usually there is no monthly premium for Part A coverage.
- You pay a Part A deductible and coinsurance, which are out-of-pocket expenses, when you receive care. You are responsible for paying these expenses—unless you have a separate health insurance plan to cover them.
Medicare insurance—for doctor services and more:
- Part B is optional coverage.
- You pay a monthly Part B premium.
- For most services, you pay a calendar year Part B deductible and coinsurance—unless you have insurance for those expenses.
Medicare-approved prescription drug coverage:
- Part D is sold only through private organizations, like insurers, are contracted with Medicare.
- Coverage can be purchased either as a "stand-alone" prescription drug plan (PDP) or may be included with a Part C Medicare Advantage plan. Plans that combine medical coverage and prescription drug coverage are called Medicare Advantage Prescription Drug (MA-PD) plans.
- Part C Medicare Advantage (MA) plans replace Original Medicare with coverage offered by private organizations, like insurers, that are contracted with Medicare.
- These plans offer everything covered by Original Medicare Part A and Part B, plus they often include prescription drug coverage and coverage of certain services not paid by Original Medicare.
- Premiums and deductibles vary by plan.
What Medicare doesn’t pay and why many people choose to buy additional coverage
Unless you qualify for a program to help pay your Medicare costs, you will have to pay all these costs yourself. As mentioned earlier, there’s a monthly premium for Part B, which is typically deducted from your Social Security check each month. Both Medicare Part A and Part B have deductibles and coinsurance that you must pay. Each year, these costs are reviewed, and often adjusted, by the federal government.
It’s important to remember that Medicare does NOT cover most prescription drugs and you may need additional prescription drug coverage.