The ABCs & D of Medicare

For a lot of new retirees, or men and women who are thinking about retirement in the near future, Medicare is an important issue, but one they might not completely understand. In this short article, we’ll walk you through the basics of Medicare, along with a brief description of each of its major parts.

You may already be familiar with a lot of this information, or have heard or read about it in the news, but understanding what Medicare actually is gives you a good first step towards knowing how and why it can affect your retirement, and whether you need to find other supplemental health insurance. So let’s start with the big question: what is Medicare? Medicare, and a broad sense, is a US government backed program that offers health coverage for people over the age of 65, and certain younger people who qualify as disabled. The program was began in 1965, and was meant to help offset medical costs incurred by senior citizens and those with specific conditions. Medicare actually has four major “parts,” which are referred to as A, B, C, & D. Here is what you need to know about each:

Medicare Part A covers hospital stays.There are certain limits to the length of time that Medicare Part A will cover a hospital visit, and typically patients are responsible for a portion of their hospital bill, especially if the stay lasts for more than three weeks. There are also some situations in which nursing home and other extended care visits could be eligible.

Medicare Part B works as health insurance for normal outpatient visits and expenses. These would include not only doctor’s appointments or visits to health clinics, but also routine tests, and some other forms of standard medical care like prosthetic limbs, crutches, wheelchairs, and so on. Because there are co-pays that apply to Medicare Part B, most seniors also opt for additional supplemental insurance.

Medicare Part C is also known as “Medicare Advantage Plans.” These are insurance plans that are offered by private companies, but approved by Medicare. Typically, they offer extended health care options, like vision and dental, that aren’t traditionally offered under Medicare Part A or Medicare Part B. These plans can have a wide range of costs and benefits, but most are used in conjunction with a Medicare part D option.

Medicare Part D is for prescription medication coverage. While you’ll find a lot of information about Medicare Part D on this site, it’s worth pointing out that these plans are also offered by private insurance companies, but managed and approved by Medicare. Typically designed to cover or supplement the costs of medications seniors need, Medicare Part D can greatly reduce the amount you pay every month for prescriptions.