WHAT DOES MEDICARE COVER?
Most people are familiar with Medicare Part A (inpatient/hospital coverage) and Medicare Part B (outpatient/medical coverage). These two parts combined make up what is often known as “Original Medicare.” In addition to Original Medicare, individuals may also elect to participate in Medicare Part C (Medicare Advantage Plans) and Part D (Prescription Drug Coverage). We detail each part of Medicare below.
MEDICARE PART A – INPATIENT/HOSPITAL INSURANCE
Part A covers services associated with inpatient hospital care, such as an overnight hospital stay, skilled nursing facility, or psychiatric hospital. This includes charges for the hospital room, meals, and nursing services. Part A also covers hospice care and home health care.
MEDICARE PART B – MEDICAL INSURANCE
Part B covers medical services provided by physicians (inpatient, outpatient, or in-office care). In addition, it covers laboratory tests, physical therapy/rehabilitation services, and ambulance services. What some may not realize, is that Medicare Part B also covers 100% of the cost of many preventative services, including an annual wellness visit.
MEDICARE PART C – MEDICARE ADVANTAGE
A Medicare Advantage plan is a private healthcare plan that contracts with Medicare to provide Part A and Part B benefits. These plans cover all of the services that Original Medicare covers, except for hospice care. In addition to covering Part A & B benefits, these plans may offer extra coverage for services not covered by Original Medicare, such as vision, hearing, and dental. Most also offer prescription drug (Part D) coverage.
There are several types of Medicare Advantage plans, including Health Maintenance Organizations (HMO) plans, Preferred Provider Organization (PPO) plans, Private Fee-for-Service (PFFS) plans, and Special Needs plans (SNPs). You can choose to enroll in either Original Medicare or a Medicare Advantage plan. If you enroll in a Medicare Advantage plan, you generally pay a monthly premium in addition to your Part B premium. Medicare Advantage coverage is voluntary, but if you decide to join a plan, keep in mind that some plans cover more than others.
MEDICARE PART D – PRESCRIPTION DRUG COVERAGE
All Medicare beneficiaries are eligible to join a Medicare prescription drug plan offered by Medicare-approved private companies or insurers. Although these plans vary in price and benefits, they all cover a broad number of brand name and generic drugs available at local pharmacies or through the mail. As with Part C, coverage is voluntary, and plans will vary in price and prescriptions they cover.
WHAT IS NOT COVERED BY MEDICARE PARTS A & B (ORIGINAL MEDICARE)?
Now that we have answered the question “what does medicare cover;” it is important to acknowledge what Original Medicare does not cover. Some medical expenses are not covered by either Part A or Part B. These expenses include your Part B premiums, deductibles, coinsurance/copayments, prescription drugs, dental care, hearing aids, eye care/glasses, and custodial care (at home or in a nursing home). Medicare Part C may cover some of these expenses, or those enrolled in Original Medicare can purchase a supplemental Medigap insurance policy to help you cover what Medicare does not.
Hopefully, you this has helped answer the question”what does medicare cover?” As this information may change, we recommend visiting Medicare.gov for up-to-date information regarding Medicare coverage.
Author: Alexis Hudgins, CFP® | Financial Planning Advisor
Written: February 21, 2023