This post discusses Medicare Parts A and B, what’s included, what’s not included, and how much each part costs.

Medicare Parts

Here’s a simple description about each part of Medicare.

Part A includes hospital, skilled nursing care, and hospice costs.

Part B covers doctors, surgeries, lab work, imaging, diagnostic studies, equipment, chemotherapy, radiation, dialysis, mental health, and preventive services.

Part D covers prescription drugs—the kind you pick up at a pharmacy and take on your own at home. (Infusions, injections, and other medications that you go to a doctor’s office or clinic to receive fall under Part B.)

You will sign up for Parts A and B through the Social Security Administration of the government. You will buy your Part D coverage for Prescription Drugs directly from a private insurance company.

Is Part A Free?

Because most people don’t pay a monthly premium for Part A, there’s a rumor about it being “free.” But Part A is only “free” if you stay out of the hospital. It’s like this: the most expensive restaurant in my community is free to me—because I don’t eat there. If I were to go there and order a meal, it would not be free. As soon as you need hospital or skilled nursing care, you’ll find out how not free your Part A is.

Part A costs for those who DO NOT have any Medicare Supplement or Medicare Advantage plan to offset expenses are listed in this table. You can see that costs for an extended get ugly. This is just one of the reasons that people choose to limit their risk through a Medicare Supplement or Medicare Advantage policy.

Please note that Part A covers only room and board: the bed, the yummy food, and those cute gowns. Any medical care that you need while in the hospital or skilled nursing facility falls under Part B.

Who Gets Part A for $0 Premium?

Those who are 65 years or older and have worked and paid Medicare taxes for at least 40 quarters during their lifetime (a total of ten years) are entitled to $0 premium Part A. Those with a spouse who meets this criteria also get it for $0. Please note that those who worked for cash under the table and did not pay Medicare taxes on their income will not have those quarters count towards earning Part A.

Disabled workers are entitled to Part A once they have been on disability for two years. People of any age who have End Stage Renal Disease can also get Part A for $0 monthly premium.

Those who have worked and paid Medicare taxes for fewer than 40 quarters pay a premium for Part A as follows: $274 per month for 30 – 39 quarters; $499 per month for fewer than 30 quarters. These are the prices for 2022.

Part B Costs

For Part B, most people will pay a monthly premium of $170.10. It will be higher for high income earners, and low income earners could have some or all of this premium paid by their state’s Medicaid program.

In addition, most people will pay a $233 Part B deductible each year, but the real concern with Part B is the 20% coinsurance amount. There is no cap on this 20%, so an adverse health event could leave you owing a lot of money. No one wants to pay 20% of cancer treatment or 20% of a triple bypass surgery.

This 20% Part B coinsurance is the main financial risk that comes with Medicare and is the reason why most people limit their risk through a Medicare Supplement policy or else a Medicare Advantage Plan.

NOT Included:

  • Prescription drugs
  • Dental, dentures
  • Vision, glasses
  • Hearing, hearing aids
  • Routine foot care
  • Long term care
  • Cosmetic procedures
  • Experimental treatments
  • Acupuncture, chiropracter
  • Alternative health remedies

Not Included in Original Medicare

Original Medicare Parts A and B does not include prescription drug coverage, which is why we have a separate plan for that (Part D). However, drugs are usually included as part of a Medicare Advantage Plan.

Original Medicare also does not include routine care for dental, vision, and hearing, so we have separate plans for those too. (Many Medicare Advantage plans include dental/vision/hearing coverage that ranges from modest to generous, depending on the plan.)

Original Medicare Parts A and B does not include routine foot care, long-term care, cosmetic procedures, experimental procedures, or alternative medicine remedies like acupuncture, supplements, and the like.

Your Medicare Decision

You have three main pathways with Medicare, and you can only have ONE of these at a time.

  1. Keep Original Medicare Parts A and B and pay that 20% coinsurance, plus deductibles and copays.
  2. Keep Original Medicare Parts A and B but add a Medicare Supplement policy (also called MediGap) that will pay the extra costs for you.
  3. Get a Medicare Advantage Plan (also called Part C) from a private, for-profit insurance company that will coordinate all your care. They usually throw in extra benefits like dental, vision, hearing, and some other perks to incentivize you to choose them.

With the first option, your financial risk is high with no cap. With the second and third options, your risk is limited but it’s limited in different ways. We’ll discuss these in the next post: Medicare Supplement vs Medicare Advantage.

Help is free!

I’m Laraine Sookhoo and I’m passionate about helping you understand your Medicare options so you can get the most out of your Medicare benefits. My help is free, so book an appointment to get started!

Book an Appointment