Medicare Parts Breakdown 2025: Costs & Coverage Guide for Original, Advantage, and Drug Plans

Medicare consists of four distinct parts, each designed to cover specific healthcare needs at varying costs. Parts A and B form the foundation known as Original Medicare. Part C, or Medicare Advantage, offers an alternative with additional benefits, while Part D focuses on prescription drug coverage.

Designed primarily for individuals aged 65 and older, as well as certain younger people with disabilities or health conditions, Medicare provides essential health insurance through its four parts. Knowing the coverage and costs associated with each can help you maximize your benefits.

Part A: Hospital Insurance Coverage & Costs in 2024

Part A covers inpatient hospital stays, hospice care, limited skilled nursing facility services, and some home health care. Most beneficiaries qualify for premium-free Part A, but if not, monthly premiums range from $278 to $505.

Key 2024 costs for inpatient hospital care include:

• $1,632 deductible per benefit period
• No coinsurance for days 1-60 after deductible
• $408 daily coinsurance for days 61-90
• $816 daily coinsurance for days 91-150 using lifetime reserve days
• Full cost coverage beyond 150 days

For skilled nursing facilities:

• No coinsurance for days 1-20
• $204 daily coinsurance for days 21-100
• Full costs beyond day 100

Home healthcare services are covered at no cost, except durable medical equipment requires 20% coinsurance after meeting the Part B deductible. Hospice care is mostly covered with minimal copayments for prescriptions and inpatient respite care.

Part B: Medical Insurance Coverage & Costs in 2024

Part B covers outpatient services such as doctor visits, preventive care, emergency room visits, and diagnostic tests. The standard monthly premium in 2024 is $174.70, with income-based adjustments.

After a $240 deductible, beneficiaries typically pay 20% coinsurance for covered services. Some services, including clinical lab tests, home health care, and annual depression screenings, have no out-of-pocket costs.

Additional copayments or coinsurance may apply for outpatient mental health services and hospital outpatient care.

Part C: Medicare Advantage Plans - Coverage & Costs

Medicare Advantage (Part C) plans must cover all services included in Original Medicare but often provide extra benefits such as prescription drugs, dental, vision, hearing, fitness programs, and telehealth services.

Unlike Original Medicare, Part C plans generally do not cover clinical trials, hospice care, or organ transplant costs. Many plans also offer additional perks like transportation to medical appointments, acupuncture, home safety devices, and caregiver support.

Costs vary widely by plan and location, including premiums, deductibles, copayments, and coinsurance. Staying within the plan’s network usually reduces expenses.

Part D: Prescription Drug Coverage & Costs

Part D helps cover medications not included in Original Medicare. Most Medicare Advantage plans include Part D coverage, but standalone Part D plans are also available.

Each plan has its own formulary—a list of covered drugs categorized into tiers based on cost:

• Tier 1 ($): Generic drugs
• Tier 2 ($$): Preferred brand-name drugs
• Tier 3 ($$$): Non-preferred brand-name drugs
• Tier 4 ($$$$): Specialty drugs

Choosing the Right Medicare Plan for You

Your ideal Medicare plan depends on your healthcare needs and budget. If you require multiple medications, a Part D plan with comprehensive coverage and low deductibles may be best. Your options vary by location, with many plans available at different price points to fit your lifestyle.

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