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Parts of Medicare
Medicare Part A
This is coverage for Hospitalization, skilled nursing, home healthcare and hospice.
Most people receive this for zero cost if you have worked more than 40 quarters and paid taxes toward
Medicare. If you do not have the 40 quarters of work history, depending on your work history, you will
pay between $274 per month and $299 per month. Enrollment into part A is automatic for those
collecting social security If you are collecting social security most people are automatically enrolled into
Part A at age 65.
Medicare Part B
Medicare Part B helps cover medical services such as doctor visits, medical testing,
durable medical equipment, vaccines, and certain other injections and infusions administered by your
doctor, as well as other medical services not covered under Medicare Part A.
Medicare Prescription Drug Plans (Part D)
A Medicare Prescription Drug Plan (Also known as Part D) is coverage for your prescription drugs. These
plans may only be purchased through private insurance companies as there is not a Federal insurance
program for prescription insurance coverage. You may purchase a standalone plan or an Advantage
Plan that includes prescription drug coverage. In addition to your monthly premium paid and based on
your annual income, you may be assessed for an additional monthly dollar amount by Medicare called
IRMAA (Income Related Monthly Adjustment amount.
There are multiple stages to Prescription Drug plans which will impact how much you pay for your
prescriptions throughout the year. The stages are:
Deductible
This is the amount you pay before the plan starts to pay. Some plans do not have a
deductible.
Initial Coverage
In this stage you pay your copayment and/or coinsurance until the total drug costs paid
by both you and your plan reach $4430 (for 2022). You then move on to the Coverage Gap.
Coverage Gap
During this stage you will pay 25% of the plans cost for generic and name brand drugs
until your out- of- pocket costs total $7050 (for 2022). At this time, you will enter the catastrophic
stage.
Catastrophic Coverage
After your yearly out-of-pocket costs for prescription drugs reaches $7050 (for
2022) you will pay 5% of the cost or $3.95 for generic drugs and $9.85 for brand name drugs (for 2022).
Whichever price is greater. Please note there is not any out-of-pocket maximum for drug coverage.
Part D Penalty
Although this is a voluntary program, if you do not purchase a drug plan during your
initial enrollment into Medicare or did not have creditable coverage through an employer past age 65
(even if you do not take any prescription drugs), a late enrollment penalty of 1% per month will be
added to your monthly premium and generally stays with you for life. The 1% penalty is based on the
national average price of prescription plans which is currently $33.37 for 2022. When the national
average price increases, your penalty will too as it is based on 1% of the national average.
Medicare Supplement plans (Medigap plans)
Medicare Supplement Insurance (also known as Medigap) plans are sold by private companies and help
cover some or most of what Original Medicare does not including copays, coinsurance and deductibles.
They may also provide coverage for foreign travel. Generally, these plans do not offer coverage for
hearing, dental or vision. You may see any Doctor in the United States as long as they accept Medicare.
Medicare Advantage Plans (Part C)
A Medicare Advantage Plan (otherwise known as Part C or MA plans) are plans that are sold and
managed by private companies. They combine the benefits of Original Medicare Part A and Part B plus
may include additional benefits such as hearing, vision, dental, gym membership, home delivered meals
and Over-the-counter allowances. These plans have maximum out of pocket limits to protect you from
massive out of pocket expenses. Many of these plans also include prescription drug coverage.
Advantage plans do not require you to answer any medical questions in order to enroll. You also have a
“trial right”. Meaning any time within the first twelve months of enrollment into an Advantage plan,
you may return to Original Medicare even if there is not an available enrollment period. You must be
enrolled in Original Medicare Part A and Part B and continue to pay your Part B Premium to be enrolled
in an Advantage plan. These plans work on networks, some HMO and some PPO. Using in-network
Doctors will ensure the lowest out of pocket costs for you.