Medicare 101: Understanding Plan Types A, B, C, D & Medigap

What Are the Different Parts of Medicare?

Medicare is divided into four parts, each covering different aspects of healthcare:

• Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care.
• Part B (Medical Insurance): Covers outpatient care, doctor visits, durable medical equipment, lab tests, preventive services, and more.
• Part C (Medicare Advantage): A private insurance alternative to Original Medicare that combines Part A and Part B, and often includes drug coverage (Part D), as well as additional benefits like dental and vision.
• Part D (Prescription Drug Coverage): Helps cover the cost of prescription medications and is purchased separately if you have Original Medicare.

Parts A and B make up what’s known as Original Medicare, which is administered by the federal government.

What Does Original Medicare Cover and Cost?

• Part A (Hospital Insurance)
  • Covers inpatient hospital stays, skilled nursing care, hospice, and limited home healthcare services.
  • Generally free if you or your spouse worked and paid Medicare taxes for at least 10 years.
• Part B (Medical Insurance)
  • Covers doctor visits, outpatient care, lab tests, preventive screenings, and durable medical equipment.
  • Monthly premium is $185.00 in 2025, though it may be higher based on your income.

If you want more details on Medicare costs, check out my in-depth video discussing Medicare premiums and IRMAA (Income-Related Monthly Adjustment Amounts).

Choosing a Medicare Plan: Your Two Main Options

Once you have Medicare Parts A and B, you have two primary choices:

1. Original Medicare + Medigap (Medicare Supplement) + Part D (Drug Plan)
2. Medicare Advantage (Part C)

Option 1: Original Medicare + Medigap + Part D

If you choose to stay with Original Medicare, most people add a Medicare Supplement Plan (Medigap) and a Part D drug plan for additional coverage.

Benefits of Medigap (Medicare Supplement) Plans:

• No network restrictions—you can see any doctor nationwide who accepts Medicare.
• No referrals required to see specialists.
• Most plans provide international emergency coverage.
• Covers the costs that Original Medicare doesn’t, like deductibles and copays.

However, Medigap plans come with a monthly premium, typically around $100 or more, depending on where you live. Prices can be higher in states like New York, California, and Florida.

Popular Medigap Plans: Plan G vs. Plan N

Among all the Medigap plans, Plan G and Plan N are the most popular.

• Plan G:
  • Covers everything Medicare covers except the Part B deductible ($257 in 2025).
  • After meeting the deductible, Plan G covers 100% of Medicare-approved expenses for the rest of the year.
• Plan N:
  • Lower monthly premiums than Plan G.
  • Small copayments: $20 for doctor visits, $50 for ER visits (waived if admitted).
  • Does not cover Part B excess charges, which are rare and only apply in certain states.

If you’re considering a Medigap plan, it’s best to enroll when you first become eligible for Medicare to avoid medical underwriting.

Option 2: Medicare Advantage (Part C)

Medicare Advantage plans replace Original Medicare and are provided by private insurance companies. These plans combine Part A, Part B, and usually Part D into a single plan.

Features of Medicare Advantage Plans:

• Low or zero monthly premiums (you still pay your Part B premium).
• Includes extra benefits like dental, vision, and hearing coverage.
• Most plans include prescription drug coverage (Part D).

However, there are trade-offs:

• Network restrictions: Plans are typically HMO or PPO, meaning you may need to stay in-network for care.
• Higher out-of-pocket costs: Unlike Medigap plans, Medicare Advantage plans have copays, coinsurance, and deductibles that can total up to $7,000+ annually in worst-case scenarios.
• Referrals may be required for specialists in some plans.

To mitigate out-of-pocket costs, some beneficiaries pair their Medicare Advantage plan with a secondary hospital indemnity plan and a cancer rider.

Medicare Supplement vs. Medicare Advantage: Which One Is Right for You?

• Choose a Medicare Supplement (Medigap) Plan If:
  • You want the best coverage with minimal out-of-pocket costs.
  • You want to visit any doctor or hospital without network restrictions.
  • You can afford the monthly premium (typically around $100+).
  • You prefer predictable healthcare expenses.
    
• Choose a Medicare Advantage Plan If:
  • You want a low or zero-premium plan.
  • You don’t mind copays, coinsurance, and networks.
  • You want extra benefits like dental, vision, and hearing.
  • You are comfortable using an HMO or PPO network.

A Key Tip for New Medicare Beneficiaries

If you are new to Medicare and can afford it, I strongly recommend starting with a Medigap Plan because you are guaranteed to enroll without health underwriting when you first become eligible. If you wait and later want to switch to a Medigap plan, you may have to pass medical underwriting and could be denied coverage.

Need Help Choosing a Medicare Plan?

Understanding Medicare can be confusing, but you don’t have to navigate it alone. At Bluewave Insurance, we offer free, personalized Medicare plan comparisons to help you make the best choice.

Call us at 800-208-4974 for expert assistance, or visit our website for more resources.