Taking care of your health shouldn’t require you to jump through hoops.
That’s why we’re here to explain what you need to know about Medicare. So if you’ve been wondering, “What is the difference between Medicare Part A and B?”, we can help you out.
The main difference is coverage, but there’s also a difference in costs. Once you understand how it all works, you’ll be in a much better place to compare plans and decide what works best for you—the A/B package, an alternative program, or both.
Let’s get to it!
What is Medicare Part A?
Medicare Part A covers inpatient procedures and hospitalizations. This includes hospital stays, home care, nursing home services, and hospice.
This Medicare program will cover more than just the procedures and operations you’ll undergo in an inpatient setting. It’ll also take care of your meals and bed while you’re hospitalized.
What is Medicare Part B?
Medicare Part B covers outpatient procedures, like visits to the doctor’s office, medical equipment, diagnostic tests, and outpatient mental health services. In theory, the combination of Medicare Part A and B would cover everything you need, since you’d get both inpatient and outpatient coverage. In reality, though, it isn’t that simple.
There are plenty of things that aren’t covered by either of these Medicare Parts, which is why you can also go for supplemental insurance or something called Medicare Advantage. We’ll talk more about these options later on.
What About Dental Coverage?
One major thing both Medicare Part A and Part B fail to cover is routine dental visits. We all know how important tooth and gum health is, so getting dental coverage isn’t a bad idea.
There are some special circumstances where you can get Medicare Part A to cover emergency dental procedures or operations that happen during a hospitalization. To check whether an upcoming procedure might get covered under Part A, you should talk to a Medicare insurance expert or liaison.
In general, though, if you want dental coverage, you can still get it. For example, you can enroll in a Medicare Advantage program that includes dental care. Medicare Advantage is a private version of Medicare, and it comes with its own set of costs and benefits.
You can also get supplemental insurance specifically to cover dental care or other things Parts A and B miss, like coverage for chronic conditions. Visit this page to learn more about the parts of Medicare and how people are supplementing their basic care.
What is the Difference Between Medicare Part A and B in Terms of Cost?
Because both Part A and Part B belong to the same federal Medicare system, you might think that they would come with the same costs. This isn’t true. If you’ve only studied up on one set of fees, it’s time to learn how the other set differs.
1. Premiums
Premiums are the monthly fee you pay to the insurance company whether or not you’ve used any benefits that month. These are generally much lower than the costs you would pay for any doctor’s or hospital bills, but you should still factor them into your budget.
Most people on Medicare Part A don’t actually pay a premium. This is something called Premium-Free Part A, and you can qualify for a few different reasons. If you’ve been working and paying taxes leading up to your Medicare Part A coverage, the premium-free option will likely apply to you.
Medicare Part B, in contrast, does have a premium that you’ll have to pay, even if you’ve been working and paying taxes. This amount you’d pay for the Medicare Part B premium depends on your income. If it’s higher, you’ll pay a higher premium.
2. Deductibles
A deductible is the amount of money you’ll have to pay out of pocket before Medicare (or whatever insurance source you’re using) steps in to help you out with the costs. When you’re comparing Medicare to private insurance plans, the circumstances of your life can help you know what kind of deductible to look out for.
Lower deductibles are usually paired with higher premiums. If you know you tend to rack up high medical bills, this trade-off could be worth it. On the other hand, if you don’t foresee very high bills in the future and you’re looking to save more money now, a high-deductible, low-premium combination might work better for you in the short term.
The Medicare Part A deductible is higher than the Part B deductible (currently, about $1400 vs. almost $200, respectively), which reflects the often-higher costs of inpatient procedures compared to outpatient procedures.
But this doesn’t mean Part A is always more expensive in the end. Remember that you could get Part A for zero premiums, and for the full picture, you’ll also need to factor in coinsurance.
3. General Coinsurance
You might know this concept as copays, the amount you have to pay even when insurance covers most of a medical bill. Coinsurance is pretty much the same thing, but it’s usually calculated in terms of percentages rather than set amounts. Medicare Part A doesn’t use percentages, but the amounts aren’t super fixed either, so the out-of-pocket expenses are still called coinsurance.
Confused? Don’t worry—we’ll walk you through it.
4. Part B Coinsurance
Let’s start with Medicare Part B since that’s simpler. The usual coinsurance is 20 percent of every Medicare-approved amount of your bill. This means even after you’ve paid the deductible amount on your own, you’ll still pay a little bit on every bill after that.
Don’t be afraid to go to annual wellness visits and get tested for mammograms and prostate cancer screenings, though. Certain services like these will be exempt from deductibles and coinsurance.
Some insurance companies have out-of-pocket maximums, but Medicare Part B does not, so your 20 percent coinsurance could keep adding up indefinitely. If you’re expecting a lot of bills, this might be something to watch out for.
5. Part A Coinsurance
Medicare Part A has a different system. At first, you’ll pay no coinsurance.
But if you’re hospitalized for over 60 days in a benefit period, there will be a coinsurance amount. And over 90 days, you’ll dip into your 60 “lifetime reserve days,” which don’t replenish at a new benefit period. For certain inpatient psychiatric services, you’ll get 190 lifetime reserve days.
Lifetime days come with higher coinsurance. So if you know you’ll need to save up some for more expensive hospital stays in the future, you might want to just pay without insurance after those 90 days.
Look Out for Your Health!
We want you to be informed so you can feel your best and save money. Knowledge and understanding will help you make the right choices for your future. So next time you wonder about things like, “What is the difference between Medicare Part A and B?”, you’ll already have a bit of background information to work from.
And for more tips to help you take care of your health, check out the rest of our site!