Medicare Parts and Coverage: Choosing Your Path
Choosing between Original Medicare and Medicare Advantage—and selecting supplemental coverage—is one of the most important healthcare decisions you'll make. This lesson breaks down your options so you can choose wisely.
Decision 1: Original Medicare or Medicare Advantage?
Original Medicare (Parts A + B)
How It Works
- Federal program administered by CMS
- See any doctor who accepts Medicare
- No networks, no referrals
- You pay deductibles and coinsurance (20% for Part B)
Part A Details (Hospital)
What's Covered:
| Service | Coverage | Your Cost |
|---|---|---|
| Hospital stay (days 1-60) | Full | $1,632 |
| Hospital stay (days 61-90) | Full | $408/day coinsurance |
| Hospital stay (days 91-150) | Lifetime reserve | $816/day |
| Skilled nursing (days 1-20) | Full | $0 |
| Skilled nursing (days 21-100) | Full | $204/day |
| Home health | Full | $0 |
| Hospice | Full | $0 |
Part B Details (Medical)
What's Covered:
- Doctor visits and services
- Outpatient surgery
- Durable medical equipment
- Preventive services (many free)
- Lab tests and X-rays
- Mental health services
- Ambulance services
Your Costs:
- Annual deductible: $240 (2026)
- Coinsurance: 20% of approved amount
- No out-of-pocket maximum
The Gap in Original Medicare
20% coinsurance with no limit is the problem.
Example: $100,000 surgery
- Your 20% share: $20,000
- With no cap, costs can be devastating
Solution: Medigap (Medicare Supplement) insurance
Medigap (Medicare Supplement)
What Is Medigap?
Private insurance that fills the "gaps" in Original Medicare:
- Deductibles
- Coinsurance
- Copayments
Standardized Plans
Plans are labeled A through N. Same benefits across companies, but different prices:
| Plan | Part A Deductible | Part B Deductible | Part B Coinsurance | Foreign Travel |
|---|---|---|---|---|
| A | No | No | Yes | No |
| B | Yes | No | Yes | No |
| D | Yes | No | Yes | Yes |
| G | Yes | No | Yes | Yes |
| K | 50% | No | 50% | No |
| L | 75% | No | 75% | No |
| M | 50% | No | Yes | Yes |
| N | Yes | No | Yes (copays) | Yes |
Most Popular: Plan G
- Covers everything except Part B deductible ($240/year)
- Best value for most people
- Average cost: $150-300/month depending on location and age
When to Buy Medigap
Medigap Open Enrollment:
- 6 months starting when you're 65+ AND enrolled in Part B
- Guaranteed issue (can't be denied)
- No health questions
Medigap and Drugs
Medigap does NOT include drug coverage. You need Part D separately.
Medicare Advantage (Part C)
How It Works
- Private insurance approved by Medicare
- Replaces Original Medicare (A + B)
- Usually includes drug coverage (Part D)
- Network-based (HMO, PPO, etc.)
Types of Advantage Plans
| Type | Network | Referrals Needed | Out-of-Network |
|---|---|---|---|
| HMO | Strict | Yes | Not covered |
| PPO | Flexible | No | Partial coverage |
| PFFS | Any provider | No | Any accepting terms |
| SNP | Special populations | Varies | Varies |
What's Often Included
- Hospital and medical coverage
- Prescription drugs
- Dental (usually basic)
- Vision (routine exams, glasses allowance)
- Hearing (exams, some aids)
- Fitness programs (SilverSneakers, etc.)
Cost Structure
| Cost | Typical Range |
|---|---|
| $0-100/month (plus Part B) | |
| Deductible | $0-500 |
| PCP copay | $0-20 |
| Specialist copay | $20-50 |
| Hospital/day | $200-400 |
| Out-of-pocket max | $3,000-8,850 |
Advantage Pros
- Lower premiums
- Out-of-pocket maximum (Original Medicare has none)
- Extra benefits included
- Simplified coverage (one card)
Advantage Cons
- Network restrictions
- Prior authorization requirements
- May need referrals
- Can't use Medigap
- Plans change annually
- Travel limitations
Part D: Prescription Drug Coverage
When You Need It
- With Original Medicare: Separate enrollment required
- With Medicare Advantage: Usually included (MA-PD plans)
How Part D Works
Phases of Coverage (2026):
| Phase | You Pay | Notes |
|---|---|---|
| Deductible | Up to $545 | Some plans have $0 |
| Initial Coverage | 25% | Until $5,030 total drug costs |
| Coverage Gap | 25% | Donut hole (mostly closed) |
| Catastrophic | 5% | After $8,000 out-of-pocket |
Choosing a Part D Plan
Consider:
- Are your drugs covered? (Check formulary)
- What tier are your drugs on?
- Is your pharmacy in-network?
- What's the monthly premium?
- What's the annual deductible?
Use Medicare Plan Finder: Enter your drugs and pharmacy at medicare.gov/plan-compare
Comparing Your Options
Scenario 1: Healthy, Rarely Uses Healthcare
Consider: Medicare Advantage (HMO)
- Low/no premium
- Basic coverage sufficient
- Out-of-pocket max protects against catastrophe
Scenario 2: Multiple Chronic Conditions
Consider: Original Medicare + Medigap G + Part D
- See any specialist without referral
- Predictable costs
- Maximum flexibility
Scenario 3: Specific Doctors/Hospitals Important
Consider: Depends on network
- Check if providers accept Original Medicare
- Check if in Advantage plan networks
- Flexibility of Original Medicare often wins
Scenario 4: Budget-Conscious, Healthy
Consider: Medicare Advantage (PPO)
- Low premium
- Some out-of-network flexibility
- Extra benefits (dental, vision)
Scenario 5: Travel Frequently
Consider: Original Medicare + Medigap G
- Coverage anywhere in U.S.
- Some Medigap plans cover foreign travel
- Advantage plans often have travel restrictions
Annual Review: Why It Matters
Check:
- Are your drugs still covered?
- Is your pharmacy still in-network?
- Are your doctors still in-network?
- Did premiums increase significantly?
- Did benefits change?
Making the Switch
From Original Medicare to Advantage
- During Annual Enrollment Period (Oct 15 - Dec 7)
- During Initial Enrollment Period
From Advantage to Original Medicare
- During Annual Enrollment Period
- During Open Enrollment Period (Jan 1 - Mar 31)
- Warning: May not be able to get Medigap outside open enrollment
Switching Advantage Plans
- During Annual Enrollment Period
- During Open Enrollment Period (Jan 1 - Mar 31)
Coverage Decision Checklist
The Bottom Line
Original Medicare with Medigap and Part D offers maximum flexibility and predictable costs but higher premiums. Medicare Advantage offers lower premiums and extra benefits but network restrictions and annual changes. Neither is universally better—choose based on your health needs, doctors, medications, budget, and lifestyle. And review your choice every year during the Annual Enrollment Period.