Question: I’m confused about the letters people use when they refer to Medicare. They seem to be talking about different things. Can you explain what people are talking about?
Answer: Medicare is confusing and the government hasn’t made it easy, but I think I can help simplify this for you.
Medicare is composed of four parts: A, B, C and D.
- Part A is your hospital insurance.
- Part B is your medical insurance—physicians and healthcare providers, outpatient care, home health care, durable medical equipment and many preventive services.
- Part C is what most people know as Medicare Advantage plans.
- Part D is your prescription drug coverage (PDP).
Notice that all of the above begin with “Part.” When someone uses that term, they are referring to one of the four parts of Medicare.
When someone uses the term “Plan” followed by a letter, they are referring to a Medicare Supplement (Medigap) plan. Medigap plans (or policies) are standardized and must have specific benefits, so that you can compare them easily. Unfortunately, Medicare has made it confusing by designating them with letters which causes confusion for many.
The bottom line is that if someone is using the term “part”, they are referring to one of the four parts of Medicare. If they use the term “plan” or “policy” in combination with a letter, they are referring to one of the standardized Medicare Supplement “plans” or “policies.”
Medicare has more than its share of confusing aspects, but hopefully this will clarify one “part” of it.