Understanding your Medicare options

Original Medicare is run by the federal government. It has two parts:

Part A (Hospital Insurance) covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. Most people don't pay a monthly premium for Part A if they or their spouse paid Medicare taxes while working.

Part B (Medical Insurance) covers doctor visits, outpatient care, preventive services, durable medical equipment, and some home health care. Part B has a monthly premium.

With Original Medicare, you can see any doctor or go to any hospital that accepts Medicare — no network restrictions, nationwide. The main tradeoff: Original Medicare doesn't cap your out-of-pocket spending, which is why many people add additional coverage.

Medicare Advantage plans are offered by private insurance companies approved by Medicare. They provide all the same coverage as Original Medicare (Parts A and B), usually with added benefits.

Most Medicare Advantage plans include prescription drug coverage (making them "MAPD" plans). Many also offer dental, vision, hearing, fitness benefits, and more — often with lower monthly premiums.

The tradeoff: most plans use a network of doctors and hospitals. You may need referrals for specialists, and care outside the network may cost more or not be covered. Plans are also area-specific, so your options depend on where you live.

Medicare Advantage plans must cover everything Original Medicare covers, and most include an annual out-of-pocket maximum — a cap on how much you spend each year.

Medigap policies help pay some of the costs that Original Medicare doesn't cover — like copayments, coinsurance, and deductibles. They're sold by private insurance companies.

Medigap plans are standardized. Each plan is identified by a letter (A, B, C, D, F, G, K, L, M, N). Plans with the same letter offer the same benefits, regardless of which company sells them. This makes it easier to compare prices.

Important: Medigap works with Original Medicare only. If you have a Medicare Advantage plan, you don't need (and generally can't use) Medigap.

Many people choose Medigap because it makes their costs more predictable. Combined with Original Medicare, it also provides the freedom to see any doctor who accepts Medicare.

The best time to buy a Medigap policy is during your Medigap Open Enrollment Period — the 6 months starting when you're 65 or older and enrolled in Part B. During this period, companies can't charge you more or deny coverage based on health conditions.

Medicare Part D helps cover the cost of prescription drugs. It's offered by private insurance companies approved by Medicare.

If you have Original Medicare, you can add a standalone Part D plan to get drug coverage. If you have Medicare Advantage, drug coverage is usually included in your plan.

Part D plans have a formulary — a list of covered medications. Different plans cover different drugs, so it's important to check that your medications are covered before choosing a plan.

Costs can include a monthly premium, annual deductible, copayments or coinsurance, and a coverage gap (though the coverage gap has been significantly reduced in recent years).

Special Enrollment Periods (SEPs) — You can normally make changes to your Medicare coverage during certain times of year (like the Annual Enrollment Period, October 15 – December 7). But if you qualify for a Special Enrollment Period, you can make changes at other times too. Common qualifying events include moving to a new area, losing other coverage, or qualifying for Medicaid.

Low-Income Subsidy (LIS / Extra Help) — If you have limited income and resources, you may qualify for Extra Help paying your Part D prescription drug costs. This can significantly reduce your premiums, deductibles, and copayments for medications.

Dual Special Needs Plans (D-SNPs) — These are Medicare Advantage plans designed specifically for people who qualify for both Medicare and Medicaid. They coordinate benefits from both programs and often include additional services tailored to your needs.