A, B, D, C and the One Big Decision

A, B, D, C. They may not be in alphabetical order but, when it comes to Medicare, it’s easier to understand when they’re in this order.

Medicare, also referred to as “Original Medicare,” is made up of Parts A and B and is run by the US Federal Government. On the other hand, Parts D and C are run by private insurance companies that have been approved by Medicare. Given this fact, you might be tempted to mentally section off the four letters into two parts, A and B in one and D and C in another. However, there’s a reason D is before C and a reason why you’re probably going to want to section the alphabet this way: A, B, and D in one, C in another.

But before I go on, let’s take a quick look into what Medicare is offering with Parts A and B.

      Part A, also known as Hospital Insurance: this covers hospital stays

      Part B, also known as Medical Insurance: this covers outpatient care

If you have A and B, you’re missing prescription drug coverage. Part D covers your prescription drugs.

So, with A, B, and D, you’ve got decent coverage. What’s Part C then? Part C, also known as the Advantage plan, covers the same things as A, B, and D.

What’s the Difference?

For most cases, people either sign up for A, B, a Supplemental Plan, and D or sign up for A, B, and C (which oftentimes includes D). Generally speaking, Advantage plans (Part C) are typically less expensive but may have more out-of-pocket costs and network limitations whereas Supplemental plans (Medigap) are typically more expensive but may have fewer out-of-pocket costs and the freedom to go to any provider that takes Medicare without referrals. The plan that’s right for you depends on both your health needs and financial resources.