Medicare 101

Original Medicare, Parts A and B, covers about 80% of your health care costs after age 65. To fill the remaining 20%, you can choose between Medicare Advantage and Medicare Supplemental Insurance (Medigap). With a Medigap policy, you’ll need to add a Part D prescription drug plan to cover prescription costs.

Part A Generally Covers.png
Part B Generally Covers.png

Medicare Advantage Plans, Also Known as Part C

Medicare Advantage plans bundle Parts A and B along with additional benefits. Many private insurance carriers contract with Medicare to offer these Part C plans. The plans are required to meet or exceed the benefits under Original Medicare. Medicare Advantage plans must also limit your total annual out-of-pocket Medicare costs, and many plans include extra benefits such as routine dental and vision coverage. When you enroll in a Medicare Advantage plan, the plan administers all of your Medicare benefits for covered services. Original Medicare cannot be billed for any health care services you receive while on a Medicare Advantage plan. However, you must continue paying your monthly Medicare Part B premium when using a Part C plan.

 
Medicare Advantage Plans.png
 

Medicare Supplement Insurance (Medigap) Policies

Medigap policies offer coverage through private insurance carriers and fill the gaps in coverage by Original Medicare. You must have Original Medicare to enroll in a Medigap policy, and you cannot have coverage through a Medicare Advantage plan. Medigap policies can help pay the deductibles, copayments, and coinsurance that Original Medicare charges you for some items and services. Medigap policies allow you to visit any doctor who accepts Medicare and new patients. For each medical visit, Original Medicare pays its portion first, and then the Medigap policy pays its share. Any remaining balance is your responsibility. There are 10 standardized Medigap policies with lettered names. Each letter covers costs in different ways. Via Benefits provides the details of each policy when you start shopping.

 
Medigap_Graphic.png
 

Part D Prescription Drug Plans (Part D)

Private insurance carriers contract with Medicare to offer Part D plans. To get Medicare drug coverage, you must join a plan approved by Medicare that offers Medicare drug coverage. Plans vary in cost and drugs covered. There are two ways to get drug coverage:

  • Medicare Prescription Drug plan (Part D): These plans add drug coverage to Original Medicare, some Medicare Cost plans, some Medicare Private Fee-for-Service (PFFS) plans, and Medicare Medical Savings Account (MSA) plans.

  • Medicare Advantage plans with prescription drug coverage (MAPD): MAPD plans bundle Medicare Part A (hospital insurance), Medicare Part B (medical insurance), and prescription drug coverage (Part D) in a single plan. You must have Part A and Part B to join a Medicare Advantage plan.

Part D is an optional benefit, but Original Medicare offers limited prescription drug coverage and does not cover most medications you take at home. While coverage is optional, you may be charged a late enrollment penalty. The late enrollment penalty is an amount added to your Medicare Part D monthly premium.

You may owe a late enrollment penalty if, for any continuous period of 63 days or more after your Initial Enrollment Period is over, you go without one of these:

  • A Medicare Prescription Drug plan (Part D)

  • A Medicare Advantage plan (Part C)

  • Another Medicare health plan that offers Medicare prescription drug coverage

  • Creditable prescription drug coverage