What’s the Difference Between Medicare Part A and Part B?
June 14, 2025
For people 65 an older, the Medicare federal health insurance program offers coverage to help pay for essentials like doctor visits, hospital stays and surgeries. While qualifying for Medicare coverage is a cause for celebration, many seniors find it extremely challenging to understand their options and get the coverage that’s best for them.
Medicare has several “parts,” some of which may you may be automatically enrolled in when you qualify, and others that you must choose to sign up for. To begin with, it’s important to understand the difference between Medicare Part A and Part B.
Simply put:
Part A (Hospital Insurance) helps cover inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care.
Part B (Medical Insurance) helps cover:
- Services from doctors and other health care providers
- Outpatient care
- Home health care
- Durable medical equipment like wheelchairs, walkers, hospital beds, etc.
- Many preventive services like screenings, vaccines, and yearly “wellness” visits
How does Medicare work?
Most people only need to sign up for Part A and Part B once. You can also choose which way you want to get your Medicare health coverage: either Original Medicare or a Medicare Managed Care Plan (also known as Medicare Advantage Plan). If you choose Original Medicare, you’ll also decide if you want prescription drug coverage (Part D) and a medical supplement plan.
Is Medicare free?
Contrary to what many people think, Medicare is not free. Part A is sometimes called “premium-free Part A” because the premium in $0 if you have been working for at least 40 quarters or 10 years, and paying your Medicare taxes.
However, there is a monthly premium for Part B. The amount is based on your income and it can change from year to year. For 2024, the premium is $174.70 each month (or higher depending on your income).
There are also Part A and Part B deductibles. You’ll usually pay 20% of the cost for each Medicare-covered service or item. However, Medicare Part A and Part B each have deductibles that must be met before this 20% co-pay kicks in.
When it comes to enrolling in Medicare, the earlier the better.
We advise clients to sign up for Medicare when they are first eligible in order to avoid a gap in coverage and/or late enrollment penalties. For most people, eligibility starts three months before they turn 65 and ends three months after they turn 65.
If you are celebrating your 65th birthday in the next few months, go to www.ssa.gov and sign up online for Medicare Parts A and B (you’ll need to create a secure “my Social Security” account if you don’t already have one.) Still working? Here are two things to note:
- If you have health insurance from an employer, you only need to sign up for Medicare Part A.
- However, if the company you work for has less that 20 employees, you must also enroll in Part B.
If you’re new to Medicare, learn how to get the coverage you need.
An experienced Medicare agent will give you the guidance you need to make educated decisions about the type of coverage that’s right for you. With over 20 years of experience, we promise you an honest and eye-opening conversation about how Medicare works and what your choices are. And we never charge for our services. Contact Bruce today to schedule a complimentary consultation.
Did you go to the pharmacy in January and discover your prescription medications cost more? Judging by the number of calls we received from clients over the past few weeks, you were not alone.
Medicare covers most major medical needs for those 65 and older. However, some services – including vision, dental and hearing – fall outside the program’s scope.
The 2024 Medicare Annual Enrollment Period ended on December 7. If you switched from one Medicare Managed Care Plan (also known as Medicare Advantage Plan) to another or changed your stand-alone prescription drug coverage (Medicare Part D), your changes will go into effect January 1, 2025.
Medicare Open Enrollment is happening now! Through December 7, 2024, those currently enrolled in Medicare can change their Medicare Managed Care Plan (also known as Medicare Advantage Plans) or stand-alone prescription drug coverage. All changes are effective January 1, 2025.
You are reviewing your latest Medicare Explanation of Benefits statement and notice you’ve been billed for a service that does not look familiar. It may simply be the result of a misunderstanding on your part about your benefits. However, it may also be fraud or abuse.
The benefits of Medicare begin when you turn 65. But what happens if you are still working past age 65 and have no plans to retire? If your workplace offers health insurance, do you still need to get Medicare? Is there a downside if you don’t? The first step in exploring Medicare enrollment is to have a conversation with your company’s human resources department before your 65th birthday. Make sure you find out what you will need to do in terms of your health insurance coverage.
The Consolidated Omnibus Budget Reconciliation Act – known as COBRA – offers a way for workers and their families to maintain their employer-provided health insurance during situations such as job loss, a reduction in hours worked, transition between jobs, divorce, and other life events. COBRA is a valuable lifeline for many. But if you are nearing age 65 and plan to enroll in Medicare, there are some things you need to know before you decide to elect COBRA coverage in order to avoid gaps in coverage – and potentially costly penalties.
As with any health insurance, Medicare changes from year to year. However, the changes in Medicare’s prescription drug coverage for 2025 seem to have created more confusion than in years past. The Inflation Reduction Act (IRA) of 2022 Signed into law in 2022, the IRA went into effect beginning January 1, 2025. There was a lot of publicity around how the law would impact Medicare prescription drug coverage, and members received information via mail and email. Here are three of the biggest changes for 2025: 1. There is a $2,000 out-of-pocket maximum. Those with Part D plans through traditional Medicare and Medicare Managed Care Plans (Medicare Advantage Plans) with prescription drug coverage won't pay more than $2,000 over the calendar year in out-of-pocket costs for their prescription medications. There is a $590 annual deductible on most plans. Once you reach the $2,000 maximum you will pay $0 for Tiers 1, 2, 3, 4, and 5 drugs as long as they are in the formulary. (If a medication is not in the formulary, your doctor can apply for an exception.) The only cost you will incur is your monthly premium. Note that the $2,000 maximum includes your deductible, copays and what your insurance pays for. The IRA also eliminated the Prescription Drugs Coverage Gap – known as the “donut hole.” 2. Plan premiums are higher. It’s not unusual for monthly premiums to increase from year to year. However, all prescription drug plans are higher for 2025 because of the IRA – and in some cases the increases are sizable. The good news is that many people will see a significant drop in expenses because of the cap on out-of-pocket costs, as well as the elimination of the coverage gap. 3. You may be paying more for medications. The IRA resulted in changes to the prescription drug tiers as well, with certain medications moving from one tier to another in the formularies. Tiers are locked in for 2025, so it’s important to work with your pharmacist to determine the most cost-effective options. When reviewing your plans for 2026, keep in mind that each insurance company can change the formularies from one plan to another. Understanding your plan is a must. We tell our Medicare clients this all the time: when you receive your “Annual Notice of Change" (ANOC) document in September, you must read it carefully! It is surprising how many people simply toss these notices in a drawer or in the trash without reading them. Your ANOC contains detailed information about any changes in coverage and costs that will be effective in the following year. And if you are unhappy with the benefits your plan is offering – or unsure about what the changes will mean for you – THAT is the time to speak with an experienced Medicare agent who can offer guidance. Why? Because the Medicare Annual Enrollment Period (AEP) begins in mid-October. Those currently enrolled in Medicare will have the opportunity to change their current Medicare Managed Care Plans (Medicare Advantage Plans) or stand-alone prescription drug coverage. Navigating the Medicare maze can be challenging. Whether you are new to Medicare or exploring other plan options, it can be overwhelming to figure out which coverage is best for you. But you don’t have to do it on your own. With over 20 years of experience, we promise you an honest and eye-opening conversation about how Medicare works and a clear understanding of what your choices are. And we never charge for our services. Call Bruce or Marcia at 973-628-0694 to schedule a complimentary consultation.
We’ve summarized the basics of Parts A, B, C, and D to help you understand how Medicare works. Part A: Hospital Insurance Part A helps cover inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care. Part A is sometimes called “premium-free Part A” because the premium in $0 if you have been working for at least 40 quarters or 10 years, and paying your Medicare taxes. If you have health insurance from an employer, you only need to sign up for Medicare Part A. However, if the company you work for has less that 20 employees, you must also enroll in Part B. Part B: Medical Insurance Part B helps cover the costs of services from doctors and other health care providers, including outpatient care, home health care, durable medical equipment, and many preventive services like screenings, vaccines, and yearly wellness visits. There is a monthly premium for Part B. The amount is based on your adjusted gross income and it can change from year to year. For 2025, the minimum monthly premium is $185 each. The Part B deductible for 2025 is $250 for the calendar year. If you did not sign up for Part B and are planning to retire, you will need to provide Social Security with a form completed by your company confirming that you are no longer covered under their health plan. Part C: Medicare Managed Care Plan /Medicare Advantage Part C – also known as a Medicare Managed Care Plan or Medicare Advantage Plan – offers an alternative to Original Medicare (Parts A and B). These plans are run by private insurance companies approved by Medicare. Medicare Advantage Plans provide coverage for hospital stays and medical services. You need to be enrolled in Medicare Part A and B to purchase a plan (Medicare Advantage plans do not replace Part A and B.) Many plans offer additional benefits such as vision, hearing, dental, or wellness programs. Medicare Advantage Plans differ in their costs, benefits, and network restrictions. Some have a $0 premium, others charge up to $150 a month. We advise clients that the key consideration in purchasing a plan is ensuring that your doctors are in the network. Part D: Prescription Drug Coverage Part D helps cover the costs of prescription medications. This optional coverage is administered by private insurance companies that contract with Medicare. If you are enrolling in Original Medicare and/or a Supplement (Medi-Gap) Insurance plan, you will need to purchase a standalone Part D prescription drug plan at same time. Complete this step whether or not you are currently taking medication! Otherwise, you may have to pay a lifetime penalty should you need coverage down the road. While there are some exceptions, most Medicare Advantage plans include a prescription drug plan. We’ve explained the 2025 changes to Part D coverage in our March blog. Get the answers and the coverage you need. The Medicare landscape is constantly changing and so are your healthcare needs. Whether you are new to Medicare or exploring your plan options, working with an experienced Medicare agent can help you avoid confusion and – the frustration of not getting answers to your questions. With over 20 years of experience, we promise you an honest conversation about how Medicare works and what coverage might be best for you. We are never too busy to take your call or help resolve your issues, and we never charge for our services. Call Bruce or Marcia at 973-628-0694 to schedule a complimentary consultation.
