Medicare Plans Overview
Medicare is a federal health insurance program. Beneficiaries have different ways to receive Medicare benefits and options that may be used with Original Medicare — including Medicare Advantage, Medicare Supplement, and Part D drug plans. We help you understand the options and review what may be available in your area.
Understanding the Basics
Medicare is a federal health insurance program administered by the Centers for Medicare & Medicaid Services (CMS). It is available primarily to individuals 65 or older, as well as to certain individuals under 65 with qualifying disabilities or specific medical conditions. Eligibility, enrollment rules, and benefit structures are defined by federal law.
Original Medicare consists of Part A (hospital insurance) and Part B (medical insurance). It covers a broad range of health services but does not cover all costs — including most prescription drugs, dental, vision, or hearing services — and has no out-of-pocket maximum. Beneficiaries have choices about how to receive and supplement their Medicare benefits.
As a licensed independent insurance agency, we help Medicare-eligible individuals review coverage paths that may include Medicare Advantage (Part C), Medicare Supplement (Medigap), and Part D Prescription Drug Plans. Plan availability, premiums, provider networks, formularies, benefits, and cost sharing vary by location, plan, carrier, and year.
Common Medicare Coverage Paths
Beneficiaries may remain with Original Medicare and add a standalone Part D and/or Medigap policy, or receive Medicare benefits through a Medicare Advantage plan.
Medicare Advantage (Part C) →
Medicare Advantage is an alternative way to receive Medicare Part A and Part B benefits through a private plan approved by Medicare. Beneficiaries remain enrolled in Medicare and must generally continue paying the Part B premium. Medicare Advantage plans generally cover the Part A and Part B services covered by Original Medicare, while hospice care generally remains covered through Original Medicare. Many plans may also include additional benefits, subject to the plan's terms, limitations, and service area. Most plans have provider networks and may require referrals.
Medicare Supplement / Medigap →
Supplemental insurance that helps pay for costs not covered by Original Medicare — such as deductibles, copays, and coinsurance. Medigap plans are sold by private insurance carriers and are standardized in most states (Plan A, Plan B, Plan G, Plan N, etc.), meaning the same plan letter provides the same core benefits regardless of carrier. Premiums vary by carrier, plan, age, and location.
Part D Prescription Drug Plans →
Standalone prescription drug coverage for beneficiaries enrolled in Original Medicare (Part A and/or Part B). Part D plans are offered by private insurance carriers and vary in terms of which drugs are covered (formulary), what you pay, and which pharmacies are in-network. A standalone Part D plan is generally used with Original Medicare. It usually should not be combined with a Medicare Advantage plan that includes drug coverage.
Understanding Medicare Part A and Part B
Original Medicare is the foundation. Understanding what Parts A and B cover—and what they do not—helps beneficiaries evaluate whether additional coverage may be appropriate for their needs.
Part A — Hospital Insurance
Covers inpatient hospital stays, skilled nursing facility care (following a qualifying hospital stay), hospice care, and some home health services. Most people do not pay a premium for Part A if they or a spouse worked and paid Medicare taxes for a sufficient period. Part A has deductibles and coinsurance for hospital stays that last longer than a certain number of days.
Part B — Medical Insurance
Covers outpatient care, doctor visits, preventive services, durable medical equipment, and some home health services. Part B has a standard monthly premium (which may be higher for individuals with higher incomes, under IRMAA rules) and an annual deductible. After the deductible, Part B generally covers 80% of approved costs — leaving the beneficiary responsible for the remaining 20% with no out-of-pocket cap.
What Original Medicare Does Not Cover
Original Medicare does not cover most routine dental care, vision, hearing, long-term care, or most prescription drugs. It also has no out-of-pocket maximum — meaning costs from a serious illness or hospitalization can accumulate without limit. Beneficiaries may consider additional coverage based on expected healthcare use, provider preferences, prescription needs, travel, budget, and eligibility.
The 20% Gap
Under Original Medicare alone, you are generally responsible for 20% of Medicare-approved costs for Part B services — with no out-of-pocket maximum. A Medicare Supplement (Medigap) plan may help cover some or all of this 20%, depending on the plan letter. Medicare Advantage plans have their own cost-sharing structure, including an annual out-of-pocket maximum. Beneficiaries enrolled in Medicare Advantage receive their Part A and Part B benefits through the plan rather than through Original Medicare directly.
Key Medicare Enrollment Periods
Medicare enrollment timing matters. Enrolling late — or missing a key window — can result in premium penalties or gaps in coverage. The following are the main enrollment periods defined by Medicare rules.
- Initial Enrollment Period (IEP): A 7-month window centered around your 65th birthday — three months before, the month of, and three months after. This is when you first become eligible to enroll in Medicare Parts A and B.
- Annual Election Period (AEP): October 15 – December 7 each year. During AEP, beneficiaries can switch between Original Medicare and Medicare Advantage, change Medicare Advantage plans, or change Part D drug plans. Coverage takes effect January 1.
- Medicare Advantage Open Enrollment Period: January 1 – March 31 each year. Allows individuals already enrolled in Medicare Advantage to switch to a different Advantage plan or return to Original Medicare (and join a standalone Part D plan).
- Special Enrollment Periods (SEPs): Triggered by qualifying events — such as moving to a new service area, losing other coverage, or qualifying for Low Income Subsidy programs. The specific SEP available depends on the circumstance.
- Medigap Open Enrollment Period: Begins the first month you are 65 and enrolled in Part B. During this 6-month window, insurers cannot deny you a Medigap policy or charge more due to pre-existing conditions, under federal rules. Outside this window, medical underwriting may apply in most states.
These are not the only enrollment periods. Special Enrollment Periods may apply based on loss of employer coverage, relocation, Medicaid status, institutional residence, plan changes, and other qualifying circumstances.
Penalties for Delayed Medicare Enrollment
Delaying enrollment in certain Medicare parts without qualifying coverage can result in permanent premium surcharges. These are defined by federal Medicare rules.
- Part B Late Enrollment Penalty: If you do not enroll in Part B when first eligible and do not have qualifying employer coverage, your Part B premium may increase by 10% for each full 12-month period you went without Part B. This penalty is generally permanent.
- Part D Late Enrollment Penalty: If you go 63 or more continuous days without creditable prescription drug coverage after your Initial Enrollment Period, you may owe a permanent late enrollment penalty added to your Part D monthly premium.
- Part A (for those who pay a premium): Individuals who must pay a Part A premium may also face a late enrollment penalty. Most beneficiaries qualify for premium-free Part A and are not affected.
Medicare FAQs
What is the difference between Medicare Advantage and Medicare Supplement?
Medicare Advantage (Part C) is an alternative way to receive Medicare Part A and Part B benefits through a private plan approved by Medicare. Beneficiaries remain enrolled in Medicare and must generally continue paying the Part B premium. Medicare Advantage plans often include prescription drug coverage and additional benefits, but typically have provider networks you must use. Medicare Supplement (Medigap) works alongside Original Medicare — you keep Original Medicare as your primary coverage, and the Medigap plan helps pay costs that Original Medicare doesn't cover. With Medigap, you can generally see any provider that accepts Medicare. The right choice depends on your health needs, preferred providers, travel patterns, and budget.
Can I have both Medicare Advantage and a Medicare Supplement plan?
No. Medicare Supplement (Medigap) plans are designed to work with Original Medicare — they cannot be used with Medicare Advantage plans. If you enroll in Medicare Advantage, a Medigap policy would not pay benefits for your Medicare Advantage cost-sharing. If you are switching from Medicare Advantage back to Original Medicare, you may be able to purchase a Medigap plan, though medical underwriting may apply in most states outside of your initial Medigap open enrollment period.
When should I enroll in Medicare?
For most people, the Initial Enrollment Period around your 65th birthday is the best time to enroll. If you have qualifying employer-sponsored coverage based on active employment, you may be able to delay enrollment without penalty. The rules depend on your employer's size and type of plan. Delaying without qualifying coverage can result in permanent late enrollment penalties. We recommend contacting us before your 65th birthday to review your specific situation and enrollment timing.
Does Medicare cover prescription drugs?
Original Medicare (Parts A and B) generally does not cover most outpatient prescription drugs. Prescription drug coverage for Medicare beneficiaries is available through Medicare Part D — either as a standalone Part D plan (for those with Original Medicare) or built into most Medicare Advantage plans. Some Medicare Supplement plans do not include drug coverage, which means standalone Part D coverage may also be needed. Prescription drug coverage varies significantly by plan formulary, tier, and pharmacy network.
Are Medicare plans the same everywhere?
No. Medicare Advantage and Part D plan availability, premiums, formularies, and benefits vary significantly by county and zip code. Medigap plan premiums also vary by carrier, location, and age. A plan available in one area may not be available in another. Our team can help you review what is specifically available in your zip code during your applicable enrollment period.
Is Whitestone affiliated with Medicare or the government?
No. Whitestone Insurance Services LLC is an independent, licensed insurance agency. We are not a government agency and are not affiliated with, endorsed by, or a representative of Medicare, CMS, HealthCare.gov, or any state or federal government program. We help clients review available plan options from carriers we work with. For official Medicare information, visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227).
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