Medicare 101
The options for Medicare plans and program offerings can be overwhelming. We're here to help!
What Is Medicare?
Established in 1965, Medicare marked a significant milestone in American healthcare. It was created to provide health insurance for Americans aged 65+, regardless of income or medical history, and lessen the burden of healthcare costs for this segment. Medicare also helps some younger individuals with disabilities or certain health conditions. It’s broken down into various parts that cover different services.
Original Medicare
Original Medicare is a fee-for-service health plan. After you pay a deductible, Medicare pays its share of the Medicare-approved amount, and you pay your percentage (coinsurance). Original Medicare has two parts:
Part A (Hospital Insurance)
Helps cover inpatient hospital stays, skilled nursing facility care, hospice care, and some home health services.
Part B (Medical Insurance)
Helps cover doctor visits, outpatient care, preventive services, and medical supplies.
More Medicare Plans & Programs
Medicare Supplement (Medigap): Works Together with Original Medicare
Medigap plans bridge the coverage gaps left by Medicare Parts A and B to help cover out-of-pocket costs like deductibles, copayments, and coinsurance. A Part D drug plan must be purchased separately.
Part C (Medicare Advantage): An Alternative to Original Medicare
Medicare Part C (Medicare Advantage) combines the benefits of Original Medicare (Parts A and B), often with additional coverage, which varies by plan. Most plans use provider networks (similar to an HMO or PPO).
Part D (Prescription Drug Plans)
Medicare Part D Prescription Drug Plans (PDP) work in tandem with Original Medicare (Part A and Part B) or Medicare Advantage plans to provide prescription drug coverage.
Medicare Enrollment Periods
There are several enrollment periods for Medicare, depending on your situation. Reach out to us for guidance — we can help you understand the right timing for your situation.
Initial Enrollment Period (IEP)
Your first chance to enroll in Medicare when you turn 65:
- Generally the best time to enroll in Parts A and B, or C, and possible D.
- A seven-month window that starts 3 months before your 65th birthday month, includes your birthday month, and ends 3 months after.
Annual Enrollment Period (AEP)
October 15 – December 7 each year
During the AEP window, you can:
- Join, change, or drop a Medicare Advantage plan;
- Join, change, or drop a Part D drug plan;
- Move from Original Medicare to Medicare Advantage;
- Move from Medicare Advantage to Original Medicare and consider adding a Medigap plan*
Medicare Advantage Open Enrollment (OEP)
January 1 – March 31 each year
If you’re already in a Medicare Advantage plan, you can:
- Switch to another Advantage plan;
- Drop your Medicare Advantage plan and return to Original Medicare (and join a Part D plan and/or a Medigap plan*).
If you’re in Original Medicare, you can’t join a Medicare Advantage plan during this window.
*Important Note: Joining a Medicare Supplement (Medigap) plan after the initial enrollment window may require medical underwriting. This means existing health conditions could cause denied coverage or increased premiums. There are some exceptions, such as losing employer coverage or completing a Medicare Advantage trial period, during which you may have guaranteed issue rights.
Special Enrollment Period (SEP)
You may qualify for an SEP if:
- You move out of your Medicare Advantage or Part D plan’s service area
- You lose group health coverage (such as employer or union)
- You’re newly eligible for Medicaid
Learn more about SEPs from Medicare.gov or by asking us for assistance.
Glossary of Common Medicare Terms
Here we’ll explain some common Medicare terms you may come across as you look at plans and policies.
Advance Beneficiary Notice (ABN)
A notice from your provider if they think Original Medicare may not pay for a service. Allows you to decide whether to proceed and pay out of pocket.Assignment
When a provider agrees to accept Medicare’s approved amount as full payment.Copayment (Copay)
A fixed dollar amount you pay for a covered service (like $20 for a doctor visit).Coinsurance
Your share of the costs for a covered service, usually a percentage (like 20%).Coverage Determination (Part D)
A decision your drug plan makes about whether it will cover a drug and what you’ll pay for it.Creditable Coverage
Drug coverage (an employer plan, VA benefits, or other) that’s determined to be at least as good as Medicare Part D coverage. Helps you avoid enrollment penalties. See the Medicare > Prescription Drug Plans page for more information.Durable Medical Equipment (DME)
Medical items ordered by a physician for you to use at home, such as wheelchairs, walkers, oxygen machines, etc.Deductible
The amount you pay out of pocket during a calendar year before your plan starts to pay benefits.
Emergency Care
Care needed immediately for a life-threatening injury or illness (such as chest pain, trouble breathing, severe bleeding, or signs of a stroke). Covered anywhere in the U.S., even outside your plan’s network (if you are in a Medicare Advantage plan).Guaranteed Issue Rights
Your right to enroll in a Medigap policy without being denied or charged a higher premium based on existing health conditions. You get this right during standard enrollment periods and special situations.Lifetime Reserve Days
Extra hospital days Medicare covers after you use up your regular hospital coverage. You will pay a daily copayment. This is limited to 60 days over your lifetime.Limiting Charge
A cap on what some doctors can charge you in the case that they don’t accept Medicare assignment.Medicare Summary Notice (MSN)
A statement you get every three months if you are in Original Medicare showing what Medicare paid for services and what you may owe.Premium
The monthly amount you pay for your Original Medicare or Medicare plan. You may have separate premiums for a Medigap plan, a Medicare Advantage plan, or a Part D drug plan.Prior Authorization
Approval required by some plans in order for the plan to cover a certain service or medication. This approval must be obtained from the insurance company.Urgently Needed Care
Care you need soon for a sudden illness or injury that isn’t life-threatening (such as a sprained wrist, minor cut, or respiratory infection while traveling). Usually covered even if you’re out of your Medicare Advantage plan’s service area.
Types of Medicare Coverage
Medicare is the federal health insurance program for:
People who are 65+
Certain people with disabilities
People with End-Stage Renal Disease (ESRD)
Original Medicare
Original Medicare is a fee-for-service health plan that has two parts: Part A (Hospital) and Part B (Medical). After you pay a deductible, Medicare pays its share of the Medicare-approved amount, and you pay your share (coinsurance and deductibles).
Medicare Part A (Hospital)
Covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home healthcare services.
Medicare Part B (Medical)
Covers certain doctors’ services, outpatient care, medical supplies, and preventive services.
Medicare Supplement, or Medigap, bridges the coverage gap left by Original Medicare (Part A and Part B) and covers costs like deductibles, copayments, and coinsurance.
Medicare Part C (Medicare Advantage)
Also called Medicare Part C, these plans combine the benefits of Original Medicare (Part A and Part B) into a single plan with additional coverage, like dental, vision, hearing, wellness, and more.
Medicare Part D (Drug Coverage)
Medicare Part D Prescription Drug Plans (PDP) work in tandem with Original Medicare (Part A and Part B) and Medicare Advantage plans to provide prescription drug coverage.
Medicare Dental & Vision Plans
Dental and vision plans are additional ancillary products beneficiaries can purchase (as standalone or part of Medicare Advantage) since they are not included in Original Medicare (Part A and Part B) coverage.
Medicare Cost Plan
A type of Medicare health plan available in some service areas. If a member receives services outside of the plan's provider network without prior authorization or a referral, their Medicare-covered services will be reimbursed according to the Original Medicare fee schedule. The Cost Plan will cover emergency services or urgent care needs.
Medicare Health Maintenance Organization (HMO) Plan
With most HMO-based Medicare Advantage plans, enrollees generally receive covered healthcare services from medical providers who are members of the plan's network, except in emergency situations. Additionally, many HMO plans require an enrollee to obtain a referral from their designated primary care physician prior to receiving specialty or hospital-based care. These types of HMO-based Medicare Advantage plans are offered in select areas.
Medicare Medical Savings Account (MSA) Plan
Medicare Savings Account (MSA) plans pair a high-deductible Medicare Advantage insurance plan with a dedicated financial account. Medicare deposits funds into this account to help cover medical costs. Enrollees can access this money to pay for healthcare expenses, though only costs pertaining to Medicare-covered services will accumulate toward satisfying the plan deductible.
Medicare Preferred Provider Organization (PPO) Plan
Some areas of the United States offer a Medicare Advantage plan where members pay lower costs when utilizing healthcare services from physicians, facilities, and providers within the plan's covered network. While out-of-network care is also available, members would be subject to additional expenses when receiving care outside of the preferred network.
Medicare Private Fee-For-Service (PFFS) Plan
A Private Fee-For-Service plan is a type of Medicare Advantage plan where the plan determines reimbursement levels for healthcare providers and the patient cost-sharing amounts for received medical services. This plan model differs significantly from Original Medicare, and enrollees must carefully adhere to the specific rules of their Private Fee-For-Service plan. Within this plan structure, an individual's out-of-pocket expenses for Medicare-covered benefits may be more or less than under Original Medicare. Close attention to plan benefit designs and network status is important for Private Fee-For-Service enrollees.
Medicare Savings Program
State-administered programs that provide financial assistance to individuals with limited means, enabling them to offset some or all Medicare premiums, deductibles, and coinsurance.
Medicare Select
A type of Medigap policy that may require the policyholder to utilize in-network hospitals and, if applicable, in-network physicians in order to qualify for full insurance benefits.
Medicare Special Needs Plan (SNP)
A Medicare Advantage plan that provides targeted and specialized healthcare to specific patient populations, such as individuals who are dually eligible for both Medicare and Medicaid benefits, reside in nursing homes, or live with particular chronic medical conditions.
Pilot Programs
Special projects that aim to test enhancements to Medicare coverage, reimbursement, and quality of care. These are sometimes called demonstrations or research studies.
Program of All-inclusive Care for the Elderly (PACE)
The Program of All-Inclusive Care for the Elderly (PACE) is a special health plan that provides comprehensive medical and social services covered by both Medicare and Medicaid. In addition to these standard benefits, PACE also offers further medically necessary care and services as determined by an interdisciplinary healthcare team based on the individual's specific needs. By combining medical, prescription drug, social support, and long-term care services, PACE aims to serve enrollees who remain in the community.
State Health Insurance Assistance Program (SHIP)
A state program that receives federal funding to provide free local health insurance counseling services to Medicare beneficiaries.
State Pharmaceutical Assistance Program (SPAP)
A state program that provides financial assistance for prescription drug coverage eligibility based on financial need, age, or medical condition.
