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Understanding Medicare Parts A to D

When thinking about health care costs in retirement, it's important to understand how Medicare works. We looked at Medicare options and other factors and how they affect annual health care costs for retirees and summed it up in a new research paper. One finding: The plan you choose can make a significant difference in your annual health care costs.

Read on for answers to your Medicare questions and help understanding Medicare options!

Parts of Medicare


PART
A

COVERS

Hospital care costs.

THE BASICS

Part of Traditional Medicare run by the U.S. government.

YOU SHOULD KNOW

It's free at 65 if you or your spouse have worked (and paid taxes) for 10 years.*


PART
B

COVERS

Outpatient & doctor visits.

THE BASICS

Part of Traditional Medicare run by the U.S. government.

YOU SHOULD KNOW

It's not free. Monthly premiums are set annually. You also might have a co-pay.


PART
C

COVERS

Hospital & physician costs.

THE BASICS

Also known as Medicare Advantage offered by private insurance companies.

YOU SHOULD KNOW

Most plans have an out-of-pocket max. They also may cover dental, hearing, and vision costs.


PART
D

COVERS

Prescription costs.

THE BASICS

Can be added to Traditional Medicare (A+B) or Medicare Advantage (C).

YOU SHOULD KNOW

Costs will vary depending on the plan you choose and prescriptions you need.


MEDI
GAP

COVERS

Out-of-pocket costs, such as co-pays and deductibles.

THE BASICS

Can be added to Traditional Medicare (A+B) but not Medicare Advantage (C).

YOU SHOULD KNOW

You can get Medigap later, but you might pay more for services.

What are the most popular plans?

What to consider …

Your health status

If you have health issues, consider a plan with more coverage.

Your costs

Make sure you understand the different deductibles, co-pays, coinsurance, and maximum out-of-pocket costs that come with the plans you're considering.

Your travel plans

If you want to travel internationally, consider either a Medicare Advantage plan or a Medigap plan that offers foreign travel benefits.

Your preferred doctor

Find out if your favorite health care provider or network accepts the plan you want to choose.

Employer-sponsored health care

If you're still working, your spouse has employer-sponsored benefits, or you have retiree health benefits, consider how the plans work together.

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