What Medicare plans are and which type covers you

Medicare has four main plan types, and the one you choose determines which doctors you can see, what you pay, and how your prescriptions are covered. Original Medicare (Part A and Part B) is run by the federal government. Medicare Advantage (Part C) is sold by private insurance companies but must cover at least what Original Medicare covers. Medigap (supplemental insurance) works alongside Original Medicare to cover costs that Medicare does not. Prescription drug coverage (Part D) is separate and can be added to any plan type.

You do not have to pick one plan and stick with it forever. You can switch during the annual enrollment period (October 15 to December 7 each year), and you have a window to change plans when you first turn 65 or first become may be able to access for Medicare. Understanding what each plan type actually covers — not just the name — is the only way to know which one fits your situation and budget.

Key Takeaways

  • Original Medicare (Part A and B) is government-run, lets you see any doctor who accepts Medicare, and has no network restrictions, but you pay a deductible and coinsurance for each service.
  • Medicare Advantage plans are sold by private insurers, usually have lower monthly premiums than Original Medicare plus Medigap, but restrict you to in-network doctors and require prior approval for some treatments.
  • Medigap policies cover the deductibles, coinsurance, and copays that Original Medicare leaves you responsible for, but they cost extra and do not cover prescription drugs.
  • Part D prescription drug coverage is mandatory if you take regular medications; joining late without coverage elsewhere results in a permanent penalty added to your premium.
  • You can change plans once a year during open enrollment or when you first turn 65, so your choice now does not lock you in permanently.

Original Medicare: How Part A and Part B work together

Part A covers hospital stays, skilled nursing facility care, hospice, and home health services. Part B covers doctor visits, outpatient care, lab tests, imaging, and medical equipment. Together they are called Original Medicare, and they are administered by the Centers for Medicare & Medicaid Services (CMS), a federal agency.

In Original Medicare, you can see any doctor or specialist in the United States who accepts Medicare — there is no network, no referral requirement, and no prior approval for most services. You pay a yearly deductible for Part B (the amount changes each year), then you pay 20 percent coinsurance for most services after that. Part A has its own deductible for hospital stays, and the amount depends on how long you stay.

Original Medicare does not cover prescription drugs, dental, vision, or hearing aids. That is why many people add a Medigap policy or a Medicare Advantage plan. Original Medicare also does not have an annual out-of-pocket maximum, which means your costs can grow if you have a serious illness or need frequent care.

Medicare Advantage: Private plans that replace Original Medicare

Medicare Advantage plans (also called Part C) are sold by private insurance companies like UnitedHealthcare, Humana, and Anthem. When you join a Medicare Advantage plan, you give up Original Medicare and use the Advantage plan instead. The plan must cover everything Original Medicare covers, but it can add benefits like dental, vision, hearing, and prescription drugs — often at no extra cost.

The trade-off is that Medicare Advantage plans use networks. You must see doctors and specialists in the plan's network, except in emergencies. Many plans require you to pick a primary care doctor who coordinates your care and gives referrals. Some treatments need prior approval from the insurance company before you can have them. If you travel outside your plan's service area, you may not be covered.

Medicare Advantage plans have a yearly out-of-pocket maximum, which means once you hit that limit, the plan pays 100 percent of covered services for the rest of the year. This can protect you if you have a serious illness. Monthly premiums are often lower than Original Medicare plus Medigap, but your total cost depends on how much care you actually use.

Medigap: Supplemental coverage for Original Medicare

Medigap (also called Supplemental Insurance) is sold by private insurers and works only with Original Medicare. It covers the costs that Original Medicare leaves you responsible for: the Part B deductible, coinsurance, and copays. Medigap does not cover prescription drugs, dental, vision, or hearing.

Medigap comes in ten standardized plans labeled A through N. Plan A is the most basic and cheapest. Plan G and Plan N are popular middle-ground options. Plan F was the most comprehensive but is no longer sold to people new to Medicare. Each lettered plan covers the same benefits no matter which insurance company sells it — so a Plan G from Anthem covers exactly what a Plan G from AARP does. The only difference is price.

You have the best chance to buy Medigap without medical underwriting (meaning the insurer cannot deny you or charge more because of your health) during the six-month period starting the month you turn 65 and enroll in Part B. After that window closes, insurers can refuse to sell you a policy or charge higher premiums based on your medical history. Medigap premiums are separate from Medicare premiums and vary by age, location, and plan type.

Part D prescription drug coverage and how it connects to your plan

Part D is prescription drug coverage sold by private insurance companies. It is not automatic — you must choose a plan and enroll. If you take regular medications, joining a Part D plan is important because Medicare charges a permanent penalty if you go without coverage and then join later.

If you have Original Medicare, you add a standalone Part D plan. If you have a Medicare Advantage plan, prescription drug coverage is usually included (though some basic Advantage plans do not include it, so you would add a standalone Part D plan separately). Medigap does not include prescription drugs, so if you have Medigap, you must also enroll in Part D.

Part D plans vary widely in which drugs they cover, what you pay at the pharmacy, and which pharmacies are in-network. You can compare plans using the Medicare Plan Finder tool on Medicare.gov. Part D plans change their formularies (the list of covered drugs) every year, so a drug that was covered last year might not be this year, or your copay might increase.

Comparing costs: What you actually pay under each plan type

Your total cost under any plan depends on three things: monthly premiums, what you pay when you use care, and how much care you actually use. A plan with a low premium might have high deductibles and coinsurance. A plan with a high premium might have low or no copays.

Original Medicare has no network restrictions and no prior approval requirements, but you pay 20 percent coinsurance for most services and there is no annual out-of-pocket maximum. If you have a serious illness, costs can be very high. Adding Medigap protects you from those costs but adds a monthly premium on top of your Medicare premium.

Medicare Advantage plans often have lower or zero monthly premiums and include an annual out-of-pocket maximum, which caps your total spending. But you are restricted to in-network doctors, and some treatments need approval first. If you rarely see a doctor, Advantage can be cheaper. If you see many specialists or travel frequently, Original Medicare plus Medigap might cost less overall.

The only way to know which plan costs less for your situation is to list the doctors and medications you use, then compare what each plan type would charge for those specific services. Medicare.gov has a Plan Finder tool that lets you enter your medications and see which Part D plans cover them and at what cost.

When you can change plans and what happens if you miss the important date

You can change Medicare plans during the annual open enrollment period, which runs from October 15 to December 7 each year. Changes take effect January 1. This is the main window for switching between Original Medicare and Medicare Advantage, changing Medigap plans, or switching Part D plans.

When you first turn 65 or first become may be able to access for Medicare, you have a seven-month initial enrollment period to join without penalty. This period starts three months before the month you turn 65 and ends three months after. If you miss this window and do not have other creditable coverage, you pay a permanent penalty on your Part B and Part D premiums for as long as you have Medicare.

If you are in a Medicare Advantage plan and want to switch back to Original Medicare, you can do so during open enrollment. If you switch to Original Medicare outside of open enrollment, you have 63 days to buy a Medigap policy without medical underwriting. After that, insurers can deny you or charge more based on your health.

Frequently Asked Questions

Can I have both Medicare Advantage and Medigap at the same time?

No. Medigap is designed to work only with Original Medicare. If you have a Medicare Advantage plan, you cannot use Medigap. Some people switch from Advantage to Original Medicare specifically so they can add Medigap, but you can only do this during open enrollment or when you first turn 65.

What happens if I do not pick a plan by the important date?

If you miss your initial enrollment period when you first turn 65, you will pay a permanent penalty on your Part B premium (currently 10 percent per year of delay, though the exact amount changes). For Part D, the penalty is 1 percent per month of delay. These penalties stay with you for life, even if you join a plan later.

Do all Medicare Advantage plans cover dental and vision?

No. Some Medicare Advantage plans include dental, vision, and hearing coverage; others do not. You have to check the specific plan's benefits. Plans that include these extras often have higher premiums or higher out-of-pocket costs for other services, so compare the full picture, not just the add-ons.

Can my doctor refuse to see me if I have Medicare?

Doctors can choose not to accept Medicare patients, but if they do accept Medicare, they cannot refuse to treat you because you have it. In Original Medicare, you can see any Medicare-accepting doctor. In Medicare Advantage, you must use in-network doctors, and the plan's network determines which doctors are available to you.

What if I move to a different state?

Original Medicare works in all 50 states, so you can move without changing plans. Medicare Advantage plans are tied to specific service areas, so if you move out of your plan's area, you can switch to a different Advantage plan or switch to Original Medicare. You have 60 days after you move to make a change outside of open enrollment.