Medicare is a complex system of medical benefits. These benefits aim to help retired individuals have improved access to healthcare and insurance. But, understanding Medicare can be complex in its own right. Therefore, individuals planning their retirement need to familiarize themselves with all the parts of Medicare. This will ensure that you get the best healthcare coverage for your health and your budget.

There are 4 parts to Medicare. Below we will explain Parts A, B, C, and D.

Medicare Part A

This part generally helps you pay for inpatient services at a hospital or facility, such as nursing homes or hospice units. For most people, Part A is premium-free if you or your spouse worked and paid Medicare taxes for at least 10 years. Part B is optional, but you must enroll if you want coverage and to avoid late enrollment penalties.

Medicare Part B

This part covers two types of health services: medically necessary and preventive. Medically necessary services are services that are essential to diagnose or treat a medical condition. Preventive services are health coverage that helps to prevent or detect illness. A premium of $174.70 is standard, although higher-income beneficiaries may pay more. Some preventive services are covered without co-pays, but co-pays may apply for other services.

Medicare Part C

This is also known as the Medicare Advantage Plan. These plans bundle Parts A, B, and D, and most also include Part D prescription drug coverage. And, all benefits are bundled under a single plan with a private insurance company. This plan is excellent if you are looking for more coverage options. Or if you take prescription drugs and require dental, hearing, or vision coverage. Premiums are set by the insurer and can vary widely depending on the plan and location.

Medicare Part D

Part D is the Medicare prescription drug benefit and is an optional benefit for those who want coverage for prescription drugs. You must have Part A or Part B to enroll in Part D, though some Medicare Advantage (Part C) plans include prescription coverage automatically. 

Understanding Medicare can seem complicated. But, it is essential to know the differences to be able to find the right plan for you. To learn more about Medicare coverage specific to you, visit medicare.gov and be sure to talk to your financial advisor about planning for the cost of the extra coverage cost you will need to factor into your retirement plan.