Parts Versus Plans
What is the difference between Medicare Parts and Medicare Plans? I get this question every day. Imagine a person just starting to learn about Medicare and its confusion.
Now imagine trying to sign up for a Medicare plan without the knowledge of a local expert. It is exceedingly difficult. I have talked with many clients who attempted this once. Consequently, they all tell me, “Never again!”
The first term in Medicare you’ll probably hear is Part A and Part B. Above all, this is also known as Original Medicare. These ‘parts’ cover roughly 80% of your medical costs. For instance, you will be able to receive Part A at no cost as long as you have worked for at least 10 years in the U.S. In addition, those who haven’t will be required to pay a monthly premium for that. Part B comes at a monthly premium no matter what.
However, unlike part A, Part B is not required. I have met many clients who did not sign up for Part B due to the cost. Many have come back to me and said that was a mistake and they regret it. We can sign them up for Part B after they are originally eligible, however, that does come with a lifetime penalty. Part C (Medicare Advantage) is also voluntary. Part D is for prescription drugs.
Medicare Supplement is where Plans come in. Keep in mind, they range from Plan A through Plan K. Each plan has a slightly different benefit structure and monthly premium. For many of my clients they choose Medicare Supplement, Plan G. This is the highest benefit plan. Some clients signed up for Plan F before January 1st, 2020. Plan F is no longer available. This was a great option for many, unfortunately, it is not available for people first entering Medicare after January 1st of 2020.
In conclusion, Parts versus Plans is a confusing topic and it takes time to be able to use them correctly. Oftentimes, even I, an expert Medicare agent use the terms incorrectly. I may call Plan B, and Part G. That is okay. Working with a local Medicare expert can save time and headaches by sifting through all of the different letters and acronyms.