Medicare Overview: What is Covered by Parts A, B, C & D?

Introduction to Medicare

Medicare is a health insurance program most commonly used for people 65 and older and people under the age of 65 with certain disabilities. Additionally, Medicare provides health coverage for individuals that are 65 and older, under 65 and have been receiving Social Security Disability Insurance (SSDI) benefits for 24 months, or under 65 with End-Stage Renal Disease (ESRD). The Centers for Medicare & Medicaid Services (CMS) is the federal agency that manages Medicare and is funded through sources like Social Security and Medicare taxes deducted from annual income, through premiums that people with Medicare pay, and in part by the federal budget.¹ Considering Medicare is in part funded by the federal government, it’s required by law under the Medicare Secondary Payer Statute (MSP) to take Medicare's Hospital Insurance and Medical Insurance Trust Funds’ interest into consideration for MSP provisions, giving Medicare rights as a “Secondary Payer.”² Both of Medicare’s Trust Funds are funded differently. According to Medicare, Medicare’s Hospital Insurance Trust Fund (Medicare Part A) is financed by employees and employers’ payroll taxes and income taxes on Social Security benefits. The Medical Insurance Trust Fund (also called a Supplemental Medical Trust Fund) is financed through funds authorized by Congress, like general tax revenue, and through premiums from people enrolled in Medicare Part B and prescription drug coverage. More information on Medicare Secondary Payer can be learned in Ametros’ blog ‘What is Medicare Secondary Payer?’ Medicare is composed of different parts that help cover specific services, including Parts A, B, C, and D. Once an individual becomes Medicare-eligible and enrolls, they can either choose their Medicare benefits from Original Medicare, including Part A & B, or can choose a Medicare Advantage Plan (also known as part C), as an alternative plan to Original Medicare.³

Part Overview

Part A	Part B	Part C	Part D
Hospital Insurance	Medical Insurance	Medicare Advantage Plan	Prescription Drug Coverage
Institutional Services (hospital, skilled nursing, hospice, some home health care) Available without a premium if fully enrolled beneficiary	Professional services, i.e.: physician, DME, outpatient hospital and preventative services Available with a premium	Offered by private insurance companies that include Part A and Part B Separate enrollment for this type of coverage	Prescription drugs to be covered outside of hospital stays Separate enrollment for this type of coverage

Learn about each part in further detail below.

What’s Covered by Each Part?

Original Medicare

Many beneficiaries choose to receive parts A & B plan benefits through Original Medicare, which is also commonly known as the traditional fee-for-service (FFS) program accessible directly through the federal government. With the fee-for-service payment model, healthcare providers are paid by the government, insurance companies or third-party payers, or individuals, and is based on the number of services ordered to the patient. If someone is enrolled in Original Medicare, an individual can also join a separate Part D (prescription coverage) as a stand-alone plan offered through a private insurance company and can add Medicare supplemental insurance, also known as Medigap.

With Original Medicare:

It includes Part A (hospital insurance) and Part B (medical insurance), and Part D (prescription coverage) plan can be joined separately
The beneficiary goes directly to the doctor or hospital when they need care, and will typically not need a referral to see a specialist
The beneficiary is responsible for a monthly premium for Part B (after the deductible is met, they pay 20% of the Medicare-approved amount for Part B covered services)
There is also no yearly limit on what the beneficiary pays out-of-pocket, and they can purchase supplemental coverage

What is Medicare Supplemental Insurance (Medigap)?

Medigap is health insurance sold by private insurance companies that is added in addition to fill in gaps in Original Medicare (Part A & Part B). It helps pay for the beneficiaries share of costs for Medicare covered services including, deductibles, copayments, and coinsurance.

All Medigap Plans Cover:

Part A coinsurance and hospital costs, up to an additional 365 days after Medicare benefits used
Part A hospice care coinsurance or copayments
Part B coinsurance or copayments

Additional Benefits (available with some plans):

Skilled Nursing Facility coinsurance
Part A and/or B deductible(s)
Part B excess charges
Foreign travel emergency costs
OOP limits

Medicare Part A (Hospital Insurance)

Part A acts as Hospital Insurance and encompasses treatment in hospitals, skilled nursing facility (SNF) care, and some hospice and home health care. CMS details the certain conditions beneficiaries must meet to get these benefits including, being 65 or older, being under 65 with disabilities, or having End-Stage Renal Disease. Most people don't need to pay a premium for Part A because it’s already paid for through their payroll taxes.⁴

Commonly Covered Medicare Part A services

Inpatient hospital care

This is care that refers to any medical care that requires admission into a hospital that is accepted by Medicare by a physician’s order. According to Medicare, to be considered inpatient you’re expected or more nights of medically necessary care issued by your doctor, and the hospital needs to admit you. As an inpatient, Medicare Part A covers inpatient hospital services, where the patient typically only covers a one-time deductible for the first 60 days in the hospital.⁵

Skilled nursing facility (SNF) care

Medicare details SNF care as post-hospital care that is provided at a SNF and can only be safely given by, or under the supervision of professionals including, skilled nursing, therapy staff, or technical personnel. Skilled nursing care provides services such as administration of medications, wound care, physical and occupational therapy, tube feedings and more.⁶

Home health care

This is care that includes a wide range of health care services that can be given in the comfort of the beneficiary’s home for an illness or injury. It is usually less expensive, more convenient and just as effective as the care that can be given in a hospital or skilled nursing facility (SNF). Some home health care services may include wound care for sores or surgical wounds, intravenous or nutrition therapy, injections, or the monitoring of serious illnesses. It’s important to note that home health care is not meant to be a long-term service covered by Medicare, but long enough to treat the injury or illness. Typically, Medicare will not provide coverage for beneficiaries that need home health care more than part-time, unless a doctor declares the service to be medically necessary.⁷

Hospice care

This is care that is also known as end-of-life care that focuses on the quality of life rather than curing a disease. A physician may make a referral for hospice care if treatment is no longer working or the patient or patient’s family wants to stop them. A hospice team may include a doctor, nurse, social worker, counselor or home health aide. Various services included in hospice care are doctor services, nursing care, medical equipment, medical supplies, and prescription drugs.⁸

Medicare Part B (Medical Insurance)

Part B helps covers two main types of services including, medically necessary services like doctors' services, outpatient care, and preventative services. It also helps provide coverage for some other medical services that Part A doesn't cover, including, durable medical equipment, ambulance services, mental health services, and partial hospitalization. Most people pay a monthly premium for Part B. It helps pay for these covered services and supplies when they are medically necessary services that are received by a licensed health professional.⁹

Commonly Covered Medicare Part B services

Home health care services

Services that are covered if you are homebound and need skilled nursing or therapy to assist with recovery (see detailed description in Part A above).

Preventative Services

This is health care including screenings and counseling that helps prevent illnesses (like the flu), or detects illnesses at an early stage, when treatment will be most effective. Medicare covers services like Glaucoma tests, Diabetes screenings, depression screenings, flu shots and lung cancer screenings, and much more. Typically, the beneficiary is covered by Medicare for these types of services and has no cost if health care provider accepts assignment.¹⁰

Mental health services

Mental health services may provide coverage for partial hospitalization. You must meet certain requirements and your doctor confirms that you would need inpatient treatment in other circumstances.¹¹

Therapy services

This type of service includes outpatient physical, speech, and occupational therapy services that are provided by a therapist that is Medicare-certified.

Ambulance Services

Ambulance services provide emergency and trauma transportation when someone needs to be transported to a hospital, skilled nursing facility for medically necessary services, and being transported in another vehicle could endanger health.¹²

Durable Medical Equipment (DME)

This is equipment for medical purposes that is built to withstand long term and repeatable use, as well as for patients to use in their home. Some of the items DME Medicare covers are walkers, canes, wheelchairs and scooters, and nebulizers. It’s important to note that Medicare will only provide DME coverage if the beneficiary’s doctors and DME suppliers are enrolled in Medicare.¹³

Medicare Part C (Medicare Advantage Plan)

This type of plan offers a comprehensive package of health benefits as an ‘all-in-one’ alternative to Original Medicare, and the benefits are offered by a private insurance company contracted with Medicare. Some plans may have lower out-of-pocket costs than Original Medicare and may have a wider network of providers available to beneficiaries. These plans include your Part A (hospital) and Part B (medical) benefits, and oftentimes also include Part D (prescription drug coverage). Some plans also include extra coverage for routine vision care, hearing aids, routine dental coverage and more. In order to join into a Medicare Advantage Plan, the beneficiary must have Medicare Part A and Part B. These "Packaged" plans include Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance), and usually Medicare prescription drug (Part D). Medicare states that, ‘Medicare Advantage Plans must cover all of services that Original Medicare covers.’ However, a MAP does not need to provide coverage for the costs of services that aren’t medically necessary for the injury or illness. Additionally, a MAP can determine whether you need a referral for specific services and can charge different out-of-pocket costs. If unsure about whether a certain service is covered or not the beneficiary should ask their provider in advance.¹⁴

Medicare Part D (Prescription Drug Coverage)

Part D plans also known as Prescription Drug Plans (PDP) is an optional benefit offered to everyone who has Medicare, are run by private insurance companies that follow rules set by Medicare and help provide coverage for brand-name prescription and generic drugs. You must have Part A and Part B to join a Prescription Drug Plan. There are two ways to get prescription drug coverage according to Medicare, either 1) through Medicare Prescription Drug Plan (Part D) or 2) Medicare Advantage Plan Part (C). Medicare states:

Medicare Prescription Drug Plan (Part D). These plans (sometimes called "PDPs") add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) .

Medicare Advantage Plan (Part C) (like an HMO or PPO) or other Medicare health plan that offers Medicare prescription drug coverage. You get all of your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.” You must have Part A and Part B to join a Medicare Advantage Plan.¹⁵

Prescription Drug Plans include both brand-name prescription drugs and generic drug coverage, and most Medicare drug plans have an individual list of drugs that are covered under the plan, called a formulary. In order to help people with different medical conditions get the prescription drugs they need; the formulary contains at least two drugs that are most commonly prescribed in each category and class. According to CMS, it’s important to note:

For 2019 and beyond, drug plans offering Medicare prescription drug coverage (Part D) that meet certain requirements also can immediately remove brand name drugs from their formularies and replace them with new generic drugs, or they can change the cost or coverage rules for brand name drugs when adding new generic drugs. If you’re taking these drugs, you’ll get information about the specific changes made to generic drug coverage afterwards.¹⁶

CMS explains that if the beneficiary is using a drug that isn’t on their plan’s drug list, they will have to pay full price instead of a copayment, unless they qualify for a formulary exception. All Medicare drug plans have negotiated to get lower prices for the drugs on their drug lists, so using those specific drugs will generally save the beneficiary money.¹⁶ If the beneficiary has an injury and receives a workers’ comp settlement, Ametros’ services can also help provide additional discounts and savings on treatments and prescription drugs.

Quick Coverage Recap

Medicare Part A	Medicare Part B	Medicare Part C (Medicare Advantage Plan)	Medicare Part D (Prescription Drug Plan)
Inpatient Hospital Care Skilled nursing facility (SNF) care Hospice Some Home Health Services	Physician Services Outpatient Care Durable Medical Equipment Preventative Services	*Cover items in Part A and B, and often Part D and… Routine Vision Care Dental Coverage Hearing Coverage (hearing aids)	Brand-name Prescription Drugs Generic Drug Coverage

Have Questions About Medicare Plans and Coverage?

If an injured party is trying to determine which plan is right for them, Ametros can put the individual in touch with one of our trusted partners for advice and to answer their questions.