There are four different parts of Medicare: Parts A, B, C, and D. While each part is unique and plays an important role in ensuring your health, Parts A and B make up the core components of Medicare. Differentiating between the two can be confusing. Let’s go over the basics of each below.
Medicare Part A
Part A is the mandatory part of Medicare. If you are going to enroll in Medicare, you must enroll in Part A. It largely covers costs associated with inpatient care. These include:
- Inpatient hospital stays
- Skilled nursing facility care
- Hospice care
- Some home healthcare
Part A is also often free for most people. If you or your spouse have paid the equivalent of 40 quarters of taxes, you can receive Part A without paying a monthly premium. If you have paid between 30-40 quarters of tax credits, you will pay $278 monthly for Part A. If you have paid less than 30 quarters, you will pay $506 monthly for Part A.
In general, Medicare will pay for 100% of the costs associated with Part A up until a certain period of hospitalization. Home health insurance is unique because it is paid for by Part A and Part B.
Medicare Part B
Part B is the technically optional but highly recommended part of Medicare. Part B covers outpatient costs. In general, costs covered include those associated with the following:
- Preventive Services
- Outpatient Services
- Tests
- Medical Equipment
Part B’s payment structure is more complicated. First, most people will pay a monthly premium depending on their income. About 93% of people will pay $164.90 per month in 2023. You can expect to pay more monthly if you make more than the average person. Additionally, Part B often will only cover about 80% of costs. You are expected to pay the remaining 20% unless you have a supplemental plan.
To Summarize
In comparing Parts A and B, we find several differences.
- Part A is often free, while Part B usually has a monthly minimum.
- Part A is mandatory, while Part B is technically voluntary.
- Part A covers inpatient care, while Part B covers outpatient care.
While Parts A and B cover many of the necessities in healthcare, neither is perfect. Neither part includes prescription drug coverage.
Understanding whether Part A will be free or what you will be expected to pay will depend on your specific circumstances. Give us a call today so we can help!