Medicare is confusing, with a ton of rules and dates, inclusions, exclusions, and exceptions. But for those who are 65 years of age or who meet certain qualifying conditions, it’s essential to understand its key parts to maximize their benefits and features.

Let’s start with how it’s structured. Medicare includes four parts: A, B, C, and D.

Parts A and B are called Original Medicare. Part A covers hospital stays and Part B covers doctor visits.

In a bit more detail, Part A pays for hospital stays and follow-up costs associated with those stays. It also covers various outpatient medical services, such as home healthcare and physical therapy.

Part B pays for doctor visits and other medical care administered on an outpatient basis. It may also include the costs of medical equipment/devices and tests.

Original Medicare doesn’t pay all of your medical costs. If you elect Original Medicare — that’s Parts A and B — you should still expect to pay out-of-pocket costs, including copayments and deductibles. Additionally, prescription drugs, vision care, dental care, and hearing services are not covered by Original Medicare, so you may want to consider other options for covering those services.

For instance, you can purchase Medicare supplement insurance and a standalone Medicare Part D plan that helps pay for prescription drugs. Otherwise, you can purchase a Medicare Advantage Part C plan.

Part C, called Medicare Advantage, is an option offered by private insurance companies. It generally provides all of the coverage in Original Medicare and adds — usually — Part D prescription drug coverage, along with dental, vision, and hearing services. While Part C covers many items not addressed in Original Medicare, it may restrict your choice of medical providers and treatment options.

Part D is standalone prescription drug insurance. Most Part D plans require that you pay a premium, and you must sign up for coverage at age 65 or else be subject to penalties if you sign up for it later.

While Original Medicare is the same across the U.S., Parts C and D plans vary according to state, region, and county. Make sure you understand what’s available where you reside to maximize your coverage and benefits. Coverage, costs, deductibles, premiums, copays, and coinsurance vary by plan, so it’s important that you confirm these prior to selecting a plan.

Keep in mind that your choices aren’t permanent. As your healthcare needs change, you can change your plan, too, at least once each year during Open Enrollment from October 15 to December 7.

For more information, speak with a financial professional or visit the Medicare website, at Medicare.gov

Contact First Financial’s Investment & Retirement Center by calling 732.312.1534 to speak with professionals who can help steer your finances in the right direction. You can also email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

We’d also like to invite you to attend an upcoming virtual seminar on Understanding Medicare on Wednesday, July 24^th at 6pm. Register today!

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