Does the alphabet soup of Medicare make your head spin? This video will begin to make sense of it.

When Medicare was created, Parts A and B were all that existed. Today, Parts A and B are the only parts that Americans are required to sign up for.

-Foundation for Financial Wellness

Video Transcript:

In this lesson, we are going to breakdown the basics of Medicare and the enrollment process. This is often a topic that can feel confusing for a lot of folks. Part A, Part B, Part C, Part D, Medicare Advantage – What does it all mean? And, why are so many former athletes and aging actors trying to sell me something on TV commercials?! Today, our goal is to provide some clarity and peace of mind on the basics.

At its core, Medicare is a federally backed insurance plan for Americans who are 65 and older. 

We initially sign up for Medicare during a seven-month window surrounding our 65^th birthday. After the initial sign up, we can make changes to our plan annually during the open enrollment window which is at the end of each calendar year.

When Medicare was created, Parts A and B were all that existed. Today, Parts A and B are the only parts that Americans are actually required to sign up for.

Part A is premium free when you enroll in Medicare. It covers hospital and in-patient charges and has deductibles, co-pays, and benefit limits.

Part B does has a monthly premium associated with it. As of this recording, Part B costs $170 a month and covers items like doctor visits, lab tests, and preventative care. It has deductibles, co-pays, and benefit limits as well. For most items, the co-pay is 20% of the negotiated price.

The price for Parts A and B is fixed regardless of age or where you live in the country.

Now, Parts C and D came along a little later, and it was there to address some benefit deficiencies that were in Parts A and B. 

Today, Part C is referred to as Medicare Advantage and can cover items like dental, vision, hearing care, transportation to medical appointments, and even meals. It can also help reduce or even eliminate co-pays and deductibles on Parts A and B. Of course, the premiums will differ based on age and where you live, and the desired benefits, so you can really tailor a plan that makes sense for you.

Now Part D is the portion that covers some or all prescription drug costs. Like Medicare Advantage, it comes with a monthly premium, and it’s not required.

Both Medicare Advantage and Part D are provided by private insurance companies and are signed up for during the Medicare enrollment period.

OK, now a quick review for you to decide if you have any decisions to make or actions to take.

Medicare Part A – It’s required. There’s no premium and covers hospitalization and in-patient services.

Part B – It’s required, $170 a month as of today premium [and] covers doctor visits, labs, preventative care.

Medicare Advantage goes through private insurance companies. Premiums vary [and is] meant to round out or tailor Parts A & B.

And then Medicare Part D goes through private insurance companies. Premiums vary [and] covers some or all of your prescriptions.

As always, don’t forget to take advantage of your private counseling session. Remember it’s included, it’s private and confidential, and it’s always with one of our Certified Financial Wellness Counselors. To schedule your counseling session, simply click on the “Request Counseling” button.