Medicare is a rite of passage for American seniors. It’s a valuable source of insurance at a time when our income and health can be uncertain or unstable. The majority of us are automatically eligible for Medicare around the time we retire — at age 65. However, Medicare has options and choices, and these may not be clear upon first glance.

Putting the Pieces Together

Medicare is made up of many parts, so it’s important to educate yourself and learn Medicare-related terminology. Hospital insurance, which is referred to as Part A, is most valuable when we need long-term care for medical purposes. If you or your spouse worked for more than 10 years and had Medicare taxes taken from your income, you usually won’t pay a premium for this portion of your Medicare benefits, although there are copays and deductibles.

Medical insurance, Part B, is separate and covers your doctor visits, medical supplies, and some therapies. It may even cover smoking or alcohol cessation programs. You’ll pay a premium for Part B of $135.50 up to $460.50, the latter is if your income is greater than $500,000. The Centers for Medicare and Medicaid Services has a chart that fully explains both Part A and Part B premiums, deductibles, and copays.

Part C is where things begin to get confusing and when resources such as the Medicare Plan Finder or licensed insurance agent comes in handy. An agent is helpful when you have questions but aren’t comfortable searching for information on the internet. Part C is private insurance offered by private insurers such as Humana, and it goes beyond Original Medicare, which is Parts A and B combined.

Adding further to the perplexity of Parts A, B, and C is prescription drug coverage, which is another separate benefit. This is Medicare Part D and is perhaps the most difficult to decipher out of all other parts combined. Part D has four distinct phases each calendar year, and there is no single plan out of the possible 15-plus options that cover all drugs.