Understanding "original Medicare" and its parts

When you become eligible for Medicare, typically at age 65, you'll encounter a world of options. The first and most fundamental concept to grasp is "Original Medicare." This refers to the program managed directly by the federal government, and it forms the basis of healthcare coverage for millions of Americans.

Parts A and B: the core of original Medicare

Original Medicare is divided into two primary parts: Part A (Hospital Insurance) and Part B (Medical Insurance).

Medicare Part A helps cover inpatient care in a hospital, skilled nursing facility care, hospice care, and home health care. Most people don't pay a monthly premium for Part A if they or their spouse paid Medicare taxes through employment for a specified period (typically 10 years or 40 quarters).

Medicare Part B helps cover medically necessary services (like doctors' visits, outpatient care, durable medical equipment, and many preventive services) and supplies. Most people pay a monthly premium for Part B, which is often deducted directly from Social Security benefits. This premium can vary based on your income.

It's important to remember that Original Medicare (Parts A and B) does not cover everything. For example, routine dental care, vision care related to glasses or contacts, hearing aids, and most prescription drugs are generally not covered.

How original Medicare works

With Original Medicare, you can typically go to any doctor, hospital, or supplier that accepts Medicare. There are no networks to worry about. After you meet certain deductibles, Medicare pays its share of the approved amount, and you pay your share (your coinsurance or copayment).

For example, if you have a doctor's visit, after you meet your Part B deductible, Medicare may pay 80% of the Medicare-approved amount, and you would be responsible for the remaining 20%. This 20% coinsurance for Part B services has no annual out-of-pocket limit under Original Medicare, which is a significant consideration for many people.

What original Medicare doesn't cover: gaps and options

The most notable gaps in Original Medicare are prescription drug coverage and the lack of an out-of-pocket spending limit. To address these, beneficiaries often choose to add additional coverage:

• Medicare Part D (Prescription Drug Coverage): This is separate insurance offered by private companies approved by Medicare. Part D plans help cover the costs of prescription drugs. You choose a plan based on your specific medication needs and pay a monthly premium for it.
• Medicare Supplement Insurance (Medigap): These private policies help pay for some of the out-of-pocket costs that Original Medicare doesn't cover, like deductibles, copayments, and coinsurance. Medigap plans are standardized, meaning a plan with the same letter (e.g., Plan G) offers the same basic benefits regardless of the insurance company.

Alternatively, some people choose a [Medicare Advantage](/medicare-advantage) Plan (Part C). These are all-in-one plans offered by private companies approved by Medicare. Medicare Advantage plans cover all Part A and Part B services and often include prescription drug coverage (Part D) and extra benefits like dental, vision, and hearing. However, these plans typically have networks of doctors and hospitals you must use.

Understanding the foundational structure of Original Medicare with its distinct Parts A and B is the first step toward building a comprehensive healthcare plan that fits your needs. It allows you to then explore Part D, Medigap, or Medicare Advantage with a clearer picture of what each option adds to your coverage.