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Medicare Basics

How Does Medicare Work?

Once you know the basics, Medicare becomes easier to understand. Learn about the fundamentals to get a better understanding of what you can expect from your Medicare coverage with Blue Cross and Blue Shield of Illinois.

A senior woman with gray hair is sitting comfortably in a chair, reading a book with a dog resting on her lap.

Medicare is a national health insurance program administered by the federal government. It is not part of the health insurance marketplace. 

Most Americans join Medicare at age 65. Younger people can also join if they have end-stage renal disease (ESRD) and need dialysis or a kidney transplant. It has four parts.

The Four Parts of Medicare

Medicare is made up of four parts. Each Medicare part (designated by a letter) covers specific types of services and costs.
 

Part A is insurance for hospital expenses

Part A helps pay for:

  • Inpatient hospital care
  • Skilled nursing facility care after a hospital stay
  • Some home health care and hospice services

Learn more about Medicare Part A


Part B is insurance for medical services

Part B helps pay for:

  • Doctor’s office visits and services
  • Most outpatient care
  • Home health care
  • Durable medical equipment
  • Many preventive services

Learn more about Medicare Part B

Part C covers all the benefits of Part A and Part B with added benefits

Part C is also called Medicare Advantage. Part C is offered through private insurers approved by Medicare, such as Blue Cross and Blue Shield of Illinois.

Part C offers additional benefits, such as prescription drug coverage (Part D). Depending on the insurance plan, Part C may also include:

  • Dental, hearing and/or vision services
  • Health, wellness and fitness programs
  • Provider networks to help manage costs
  • A preloaded flexible spending card to help reduce your out-of-pocket expenses for covered dental, vision and hearing services

Learn more about Medicare Part C

 

Part D is prescription drug coverage

If you’re looking for an insurance plan that helps you cover some out-of-pocket expenses for prescription drugs, like copays or coinsurance, consider a Part D plan. Part D is offered by private companies contracted by Medicare.

Learn more about Medicare Part D

 

Medicare Supplement complements Original Medicare

Medicare Supplement Insurance Plans are identified by the letters A, B, C, D, F, G, M and N. Each insurance plan covers different costs that Original Medicare doesn’t cover.

Learn more about Medicare Supplement Insurance

 

Tools and Resources

Helpful Tools and Resources

Understanding Your Medicare Choices

Unsure about Medicare options? Our guide can help. Learn about different plans, get clear answers and make an informed decision.

Download Our Decision Guide