What you need to know about Parts A, B, C and D
When making your Medicare selections, you have what sometimes seems like a dizzying array of choices.
But as complicated as all that sounds, there’s a single key choice at the core of all your decision-making. Will you go with the Original Medicare plan, which is run by the federal government and consists of Parts A and B, or a Medicare Advantage plan (also called Part C) that is offered by a private insurer and approved by Medicare?
Medicare Part A — Your Hospital Coverage
You likely won’t have to pay a monthly premium for Medicare Part A, thanks in part to all the payroll taxes you paid while you were employed. You must, however, pay a yearly deductible before Medicare will cover any hospitalization costs. For 2011, the Part A deductible is $1,132.
The Costs of Part A and B
As a fee-for-service health plan, Original Medicare enables you to see any doctor or hospital that accepts Medicare.
Medicare will pay a share. usually 80 percent, of the "Medicare-approved amount," which is the cost Medicare determines is "reasonable" for the care you
received, given where you live.
To better predict your out-of-pocket costs, be sure to ask both Medicare and your doctor’s billing department about fees and coverage.
Part A pays about 80 percent of your Medicare-approved, inpatient costs for the first 60 days you are hospitalized. If you have a longer hospital stay, you will have to pay a larger share of the costs. (That’s where it helps to have supplemental insurance .)
If you are a U.S. citizen or permanent resident and have not worked long enough to qualify for Medicare, and can't qualify through a spouse, you may be able to buy Part A coverage.
Medicare Part B — Your Medical Coverage
Part B is optional, and you may want to opt out of Part B if you still have health insurance through an employer, union, your spouse, etc. Part B requires that you pay a monthly premium to Medicare (the standard rate for 2011 is $115.40), and there is a small deductible ($162 in 2011) that must be reached before Part B begins paying for services. People with higher incomes — above $85,000 annually for an individual or $170,000 for a couple — pay higher rates.