The Difference Between Medicare Part A and Part B

If you’re new to Medicare- either signing up because you’re turning 65, have a qualifying disease, or qualify through Social Security disability- you’re probably trying to understand all of the terminology. There are lots of different parts to Medicare insurance, different ways to get plans, and important dates to remember. We’re here to help!

This article will cover the differences between Medicare Part A and Part B. Be sure to check out our articles for answers to other common Medicare questions.

How to Sign Up for Medicare When You Turn 65

Medicare Insurance if You Work Past 65

Medicare Insurance Hierarchy of Needs

Why are there so many different parts to Medicare?

Your healthcare services are made up of different products and services that all come together to keep you healthy and thriving. The different Medicare Parts contain different services so that it’s easier to understand the rules that apply to each. Here are the most common:

  • Part A (Hospital Coverage) – hospital stays, skilled nursing facilities, home health care, hospice, surgeries, tests, and more
  • Part B (Medical Coverage) – doctors’ fees, mental health, ambulance, medical equipment, preventative care, outpatient tests, chemo, dialysis, and more
  • Part C (Medicare Advantage) – private insurance plans that take the place of Part A and Part B
  • Part D (Prescription Coverage)– prescription drugs
  • Part F (Supplemental or Medigap Coverage)- private insurance plan without most copays or coinsurance costs

Why are there so many different parts to Medicare?

Your healthcare services are made up of different products and services that all come together to keep you healthy and thriving. The different Medicare Parts contain different services so that it’s easier to understand the rules that apply to each. Here are the most common:

Part A (Hospital Coverage) – hospital stays, skilled nursing facilities, home health care, hospice, surgeries, tests, and more

Part B (Medical Coverage) – doctors’ fees, mental health, ambulance, medical equipment, preventative care, outpatient tests, chemo, dialysis, and more

Part C (Medicare Advantage) – private insurance plans that take the place of Part A and Part B

Part D (Prescription Coverage)– prescription drugs

Part F (Supplemental or Medigap Coverage)- private insurance plan without most copays or coinsurance costs

Do I have to sign up for Part A when I turn 65?

No, but you should. Part A has no premium for most beneficiaries, so there aren’t many reasons not to sign up. Unless you have to pay for Part A, you can sign up at any time, but again, you should take advantage of this coverage you’ve been paying for your whole working  life.

Do I have to sign up for Part B?

Yes. Failure to sign up for Part B at the time you become eligible will result in a penalty that you have to pay for the life of your Part B plan. (This penalty doesn’t apply if you have credible coverage from your place of employment with over 20 employees.) Don’t delay or accidentally miss your sign up period.

What is “Original Medicare”?

Original Medicare is made up of Part A and Part B. It’s called “Original” because it covers the basics, and is not private insurance like Part C or Part F. It’s run by the government to cover many costs you incur when you need healthcare services. You are responsible for Part B premiums, and for paying the remainder of bills that Part A and Part B don’t cover. Copays and coinsurance will apply if you don’t have supplemental coverage. Original Medicare generally covers 80% of Medicare approved services, leaving you to pay the other 20% and no cap on how much you can/will pay for the year.

How much does Medicare Part A and Part B cost?

The good news is that Part A has no premiums for most people. You’ve been paying into the Medicare system your whole working life for this reason. As long as you or a spouse has paid in for 40 quarters, you won’t owe anything in Part A premiums.

Part B has a monthly premium set by Medicare based on your income. You may pay more than the standard amount if you’re a high earner. Part B also sets a standard deductible and coinsurance for all beneficiaries.

For questions about special circumstances, deductibles, and more, read our entire article about Medicare Costs in 2020.

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For any other questions about the different Medicare parts, enrollment periods, or other topics, feel free to give us a call. We’ve been helping clients like you for over 15 years (with no cost to them!). We’d love to educate you about your choices.

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