Making Sense of Medicare, Part 1 – The 5 Pieces

With Medicare open enrollment around the corner (starting October 15th), now is a good time to review your coverage and consider any changes. Below is a post from a few years back covering the basics of Medicare.

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Medicare is a confusing topic to navigate, in part because there are so many choices. In the first part of this series, I will discuss the various parts of Medicare. Next week I will discuss the cost of putting these pieces together.  

There are 5 pieces to Medicare.  

1. Part A – Hospital Insurance  

2. Part B – Medical Insurance 

3. Part C – Medicare Advantage (“all in one”) 

4. Part D – Prescription Drugs 

5. Supplemental Coverage (“Medigap”) 

There are 2 main ways to put these pieces together: 

#1 Original Medicare – This includes Part A and Part B. You can also add Part D and Supplemental Coverage for more comprehensive coverage. Part C is not included in this option.

#2 Part C (also known as Medicare Advantage) - is an “all in one” alternative to Original Medicare. You pay one premium, and the plan includes Part A, Part B, and usually Part D.  

When I walk clients through the options, it typically comes down to five main questions.  

1. What type of care are you currently getting?  

2. Do you have doctors that you do not want to leave? 

3. Do you plan to travel a lot in retirement?  

4. How much are you willing to pay in monthly premiums?  

5. Can you absorb expensive out-of-pocket costs? 

The answers to those questions will get you most of the way there. For the last bit, The Center for Medicare & Medicaid Services puts out a great brochure on the differences between the two options to help consumers make a more informed decision.  

For more information on the costs of these parts of Medicare, see part 2.

Happy Planning,

Alex 

This blog post is not advice. Please read disclaimers.