Medicare 101: Understanding Your Options (Parts A, B, C & D)

Medicare is structured into distinct components, each serving a specific function. Confusion arises when these parts are viewed as interchangeable—they are not.

Part A – Hospital Coverage

Covers inpatient care:

• Hospital stays

• Skilled nursing facilities

• Hospice

Typically premium-free if you have sufficient work history.

Part B – Medical Coverage

Covers outpatient services:

• Doctor visits

• Preventive care

• Durable medical equipment

Requires a monthly premium and has no out-of-pocket cap.

Part C – Medicare Advantage

An alternative to Original Medicare:

• Combines Parts A and B

• Often includes Part D (drug coverage)

• Uses provider networks

Lower premiums, but less flexibility.

Part D – Prescription Drug Coverage

Standalone or included in Advantage plans:

• Covers medications based on formularies

• Costs vary by tier and carrier

Critical for managing ongoing prescriptions.

Supplement vs. Advantage

Two primary strategies:

• Medigap (Supplement): Higher premium, lower out-of-pocket, broad access

• Advantage: Lower premium, network-based, bundled benefits

Conclusion

Medicare is a system, not a single plan. Selecting the right structure determines both cost and access to care.