Medicare basics
Types of Medicare plans
Original Medicare is Parts A and B. Medicare Advantage is another way to receive those benefits, Part D provides drug coverage, and Medigap helps with certain out-of-pocket costs.
- Part A
- CoversInpatient hospital, skilled nursing, hospice, some home health
- PremiumMost people pay none
- Part B
- CoversDoctor visits, outpatient, home health, preventive services
- PremiumMonthly, varies by income
- Part C
- CoversPart A and B services; many plans add benefits and most include Part D
- PremiumVaries; you still pay the Part B premium
- Part D
- CoversPrescription drugs
- PremiumVaries; a late penalty may apply after a coverage gap
| Part | Covers | Premium |
|---|---|---|
| Part A | Inpatient hospital, skilled nursing, hospice, some home health | Most people pay none |
| Part B | Doctor visits, outpatient, home health, preventive services | Monthly, varies by income |
| Part C | Part A and B services; many plans add benefits and most include Part D | Varies; you still pay the Part B premium |
| Part D | Prescription drugs | Varies; a late penalty may apply after a coverage gap |
Part A: hospital insurance
Medicare Part A is also known as hospital insurance. It primarily covers inpatient hospital care, skilled nursing facility care, hospice care and some home health services. Most people do not pay a premium for Part A.
Part B: medical insurance
Medicare Part B, also known as medical insurance, covers a range of medical services and supplies including doctor visits, outpatient care, home health care and certain preventive services. Part B requires a monthly premium, which can vary based on income. Part A and Part B together are referred to as Original Medicare.
Part C: Medicare Advantage
Medicare Part C is also called Medicare Advantage. Private plans must cover the medically necessary services Original Medicare covers, but their provider rules and cost sharing vary. Many offer extra dental, vision or hearing benefits, and most include Part D prescription drug coverage.
Medicare pays private companies a fixed amount each month for a member's care. Plan premiums vary, and you must continue paying the Part B premium. Your budget, where you live, your medical needs, prescriptions and doctor preferences should all be considered before selecting a Medicare Advantage plan.
Part D: prescription drug coverage
Medicare Part D helps cover prescription drug costs. It is included in many Medicare Advantage plans, and standalone Part D plans are available with Original Medicare. A late-enrollment penalty may apply if, after your first eligible period, you go 63 days or more without Part D or other creditable drug coverage. The penalty generally continues for as long as you have Part D.
How Medicare Advantage plans are structured
If you choose a Medicare Advantage plan, the next question is what kind. The three structures below differ mainly in how much freedom you have to choose providers.
Health Maintenance Organization plans (HMO)
A Health Maintenance Organization uses a network of doctors and hospitals. You may need to select a primary care doctor and get referrals for certain specialists, depending on the plan. Non-emergency out-of-network care is generally not covered, so check the plan's current rules and provider directory before receiving care.
Preferred Provider Organization plans (PPO)
A Preferred Provider Organization generally lets members use in-network providers at lower cost and seek covered care out of network at higher cost. Out-of-network providers must be eligible and willing to treat you under the plan's terms. Costs and service areas vary, so review the plan documents rather than assuming nationwide access.
Special Needs Plans (SNP)
Special Needs Plans are Medicare Advantage plans limited to people who meet specific eligibility criteria. Categories include certain people who have both Medicare and Medicaid, live in an institution or have a qualifying chronic condition. Availability and eligibility vary by plan and location.
Medicare Supplement Insurance (Medigap)
Medigap helps pay specified out-of-pocket costs for services covered by Original Medicare. For many Part B services, you usually owe 20% of the Medicare-approved amount after the Part B deductible; Part A has different deductibles and coinsurance. What the policy pays depends on its plan letter, so you may still owe deductibles, copayments or costs for services the policy does not cover. Most Medigap policies work with providers nationwide who accept Medicare; Medicare SELECT policies may require a network for non-emergency care.
Medigap uses standardized plan letters, each with a different set of benefits. The required basic benefits within the same letter are the same no matter which company sells the policy, although not every insurer offers every letter. Part D prescription plans are not included with Medigap policies sold today, so you will need a separate Part D plan if you want drug coverage. Premiums can change over time, but switching is not guaranteed. Outside your one-time six-month Medigap Open Enrollment Period, an insurer may use medical underwriting, charge more or decline an application unless a guaranteed-issue right or another state protection applies.
CSG can compare Medigap options from the insurers it represents without charging you a separate service fee. Ask which carriers are included. See when you can make changes, or ask us to run the comparison.
Medicare Supplement questions
- What is Medicare Supplement Insurance (Medigap)?
- Medigap is private insurance that helps pay some out-of-pocket costs for services covered by Original Medicare. For many Part B services, you usually owe 20% of the Medicare-approved amount after the Part B deductible; Part A has different deductibles and coinsurance. What a Medigap policy pays depends on its plan letter, and you continue to owe any deductibles, copayments or non-covered costs the policy does not pay.
- How are Medigap plans different from each other?
- Medigap uses standardized plan letters, each with a different set of benefits. Within the same letter, the required basic benefits are the same no matter which company sells the policy. Not every insurer offers every letter, and premiums, pricing methods, discounts and service can differ.
- Do Medigap plans include prescription coverage?
- No. Part D prescription plans are not covered with Medigap plans, so you will need a separate Part D plan as well.
- Should I re-shop my Medicare Supplement plan?
- Medigap premiums can change over time, so comparing current prices may be useful. But your Medigap Open Enrollment Period is a one-time six-month window, not an annual event. Outside it, a new insurer may use medical underwriting, charge more or decline the application unless you have a guaranteed-issue right or another state protection. Keep your current policy until a replacement is approved.
- What is the difference between Medicare Advantage and a Medicare Supplement?
- A Medicare Advantage plan is another way to receive Part A and Part B benefits through a private plan; many offer extra benefits and most include drug coverage, while provider and cost-sharing rules vary. A Medigap policy works alongside Original Medicare to pay specified costs, and most policies work with providers nationwide who accept Medicare. Medigap policies sold today do not include Part D, so drug coverage is separate.
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