The four parts of Medicare, without the jargon
Medicare is not one single insurance policy. It's four pieces that combine in different ways. Understanding what each one does is what lets you compare plans without getting lost.
- Part A, hospital. Covers inpatient stays, skilled nursing facility care, hospice, and some home health care. Most people pay no premium for Part A, because they already paid for it during their working years.
- Part B, medical. Covers doctor visits, lab work, preventive services, ambulance, and durable medical equipment. It has a monthly premium that is usually deducted from your Social Security check.
- Part C, Medicare Advantage. This is not extra coverage. It's the private way to receive your Part A and Part B, through a carrier approved by Medicare, almost always with added benefits.
- Part D, prescriptions. Covers prescription drugs. It can be bundled inside an Advantage plan, or bought separately if you stay with Original Medicare.
The foundation
Part A and Part B together are what people call Original Medicare. Everything else, Advantage, Medigap, or Part D, is built on top of that foundation.
Advantage isn't added to Medicare, it's another way to receive it
This is where most people get confused, and it's the confusion that costs the most. A Medicare Advantage plan is not an extra policy laid on top of Original Medicare. It's a different route: you stay enrolled in Medicare and keep paying your Part B premium, but from that point on it's the private carrier, not Medicare, that manages your coverage and decides what gets approved.
That's why you can't hold a Medigap policy alongside an Advantage plan. Medigap exists to fill the gaps in Original Medicare. If you move to Advantage, that Medigap stops doing anything for you, even if you keep paying for it.
The key point
Choosing between Advantage and Original with Medigap is not choosing between more or less coverage. It's choosing between paying less every month and absorbing copays when you use care, or paying more every month and facing far fewer surprises later.
The network decides, not the brochure
Two plans can look nearly identical on paper and work completely differently depending on their network, which is the list of doctors, hospitals, and pharmacies that plan has an agreement with.
- HMO. You pick a primary care doctor and need a referral to see a specialist. Outside the network, except in an emergency, there is usually no coverage.
- PPO. Broader network, and you can see specialists without a referral. Out of network there's usually still coverage, but you pay considerably more.
Networks change every year. A doctor who was in network in January may not be the following January, and the notice doesn't always arrive clearly. That's why checking the network before every renewal isn't paperwork: it's what prevents unexpected bills.
What Medicare does not cover
This is the list almost nobody shows you before you sign, and it's exactly where the costs people didn't expect show up.
- Long-term care. Medicare does not pay for an indefinite stay in a nursing home. It only covers short recovery stays after a hospitalization, and with conditions.
- Routine dental, vision, and hearing. Original Medicare does not cover them. Many Advantage plans do include something, and that's a large part of their appeal.
- Care outside the United States. Except in very specific situations, there is no coverage abroad.
- Anything the plan deems not medically necessary. A procedure the carrier doesn't approve is on you, even if your doctor ordered it.
Before you sign
Ask specifically about these four points on any plan you're considering. They're behind almost every complaint call.
