Medicare Basics: Understanding Your Coverage
Medicare is federal health insurance primarily for people age 65 and older, as well as certain younger individuals who qualify. The guide explains the different parts of Medicare, how they fit together, and what to consider when choosing coverage.
Original Medicare
Medicare at a Glance
Medicare has four parts. Medicare Supplement Insurance (Medigap), works alongside Original Medicare (Parts A and B).
Part A
Helps cover inpatient hospital care, skilled nursing facility care, hospice care and some home health services.
Hospital Insurance
Part B
Helps cover doctor visits, outpatient care, preventive services and medically necessary services.
Medical Insurance
Part D
Helps cover the cost of prescription medications through standalone plans or many Medicare Advantage plans.
Prescription Drug Coverage
Medigap
Optional private coverage that helps pay certain Original Medicare out-of-pocket costs. Not a Medicare part.
Medicare Supplement Insurance
Part C
Private plan alternative to Original Medicare. Provides Part A & Part B coverage, often with prescription drug and other benefits.
Medicare Advantage
A Few Important Details
Medicare Costs
Many people qualify for premium-free Part A, but most pay a monthly Part B premium. Deductibles, coinsurance and other out-of-pocket costs can apply.
Prescription coverage
Part D plans have their own covered-drug lists (formularies), pharmacy networks and cost-sharing rules. Your medications and preferred pharmacies can make a substantial difference in costs.
Medicare Advantage
These private plans use provider networks (like an HMO) and plan-specific rules. Many include prescription coverage and additional benefits. Annual out-of-pocket limits for covered Part A and Part B services can increase costs.
Medigap
Medigap works with Original Medicare and has separate premiums. Enrollment timing matters because obtaining coverage later may involve medical underwriting, although certain guaranteed issue rights may apply.