Medicare part A B C D are the different parts of the Medicare plan. They came into existence at different times. Medicare provides coverage for mostly older Americans, 65 and older. It pays for most of the costs of hospitalization and other medical care.
The Medicare came into existence as part of the Social Security Act of 1965. President Lyndon B. Johnson signed it into law on July 30, 1965. At this time, there was only Medicare, not parts A B C D.
With the enactment of the Medicare law, many people became eligible for Medicare. You are eligible if you paid into social security during your working life. You also must meet minimum work amount requirements.
Medicare is strongly associated with Social Security. If you were looking for Social Security A B C D, know that there is no Social Security A B C D, but Medicare Part ABCD.
The Parts of Medicare
- Part A – Hospital Insurance
- Part B – Medical Insurance
- Part C – Medicare Advantage
- Part D – Prescription Coverage
Part A – Hospital Insurance
Everyone who is eligible for Medicare receive Medicare Part A benefits automatically. Part A initially covered inpatient hospital care and skilled nursing facility care. Today, home health care and hospice facility care are also included. Most people do not have to pay a premium to get Part A.
Part A does not cover long-term or custodial care. Long-term or custodial care are not covered in any Medicare part A B C D.
Part B – Medical Insurance
There was a short coming in the original Medicare plan. It only covered the hospital costs. It did not cover medically necessary services like doctor’s services, diagnostic tests and outpatient care.
Medicare Part B added coverage for medically necessary services. Physical therapy and some preventive screenings are also covered.
Part B is optional and you must pay a premium. If you are still working, your employer’s insurance may cover this part. Otherwise, you will have to pay a premium to receive this coverage.
Medicare Supplement or MediGap Policies
Medicare part A B C D does not cover everything. There are holes or “gaps” in the Medicare part A and B coverage. This is the reason for Medicare Supplement Insurance (sometimes called MediGap).
The MediGap plans are standardized by the government. They are not sold or administered by the government. You must go to a private insurance company to receive this coverage.
Medicare Supplemental Insurance is only available if you are receiving benefits from Part A and B. Not if you have chosen Medicare part C.
Part C – Medicare Advantage
There was a move in 1997 to “privatize” Medicare. The passage of the Balanced Budget Act of 1997 added C to Medicare part A B C D. You now have the option to enroll in Medicare part C. Part C allows you to have your Medicare benefits administered through private health insurance plans.
There is an advantage to these plans. You can receive more coverage beyond parts A and B. Part C plans with prescription drug benefits are known as “Medicare Advantage” (MA) plans.
The difference between Part C and the combination of Part A and B, is that you pay the premium to private insurer. The insurer provides your benefits not the government.
Medicare Advantage is not Medicare Supplemental (MediGap) insurance. The difference is that MediGap insurance is in addition to Medicare part A and B. Whereas Part C includes Parts A and B, and can include extra coverage.
Medicare Advantage pays instead of Medicare. MediGap insurance pays after Medicare pays.
Part D – Prescription Coverage
Medicare Part D is last part of the Medicare part A B C D alphabet. It is the Medicare program which covers prescription drugs. It went into effect on January 1, 2006. Anyone with Part A or B is eligible for Part D.
Part D is optional, requires a premium, and is offered through private companies. Private companies providing this coverage are annually certified, and approved, by the Centers for Medicare & Medicaid Services. You pay the premium directly to the private company and not to the government.
Summary
Medicare started out as hospital insurance. Later, medical coverage was added to the hospital coverage. Then, part C was added for private insurance companies. Finally, drug coverage was added. As a result, it became Medicare Part A B C D.