Understanding Medicare: The Basics Explained Simply

I am a licensed Medicare agent and I help folks turning 65 or already on Medicare understand their options and feel confident about their healthcare choices. Medicare can be confusing, but I believe in explaining things clearly, without jargon or pressure. My mission is to help you make the best decision for your personal situation. Whether that’s Original Medicare, a Medicare Advantage plan, or something in between. When I’m not helping clients, I’m probably sipping coffee, watching college softball, or tinkering with new tech gadgets! Let’s Get Started Shall We!

Part A (Hospital Insurance)

Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. You can think of this like “Room and Board.” Most people don’t pay a premium for Part A because they or their spouse paid Medicare taxes while working. This is sometimes referred to as “premium-free Part A.”

However, while the monthly premium may be free, Part A still comes with costs like deductibles and coinsurance. For example, in 2025, the Part A deductible is $1,676 per benefit period. After that, you may pay daily coinsurance amounts depending on the length of your hospital stay.

Part B (Medical Insurance)

Part B covers outpatient care like doctor visits, preventive services (such as mammos and colonoscopy….yay), mental health services, durable medical equipment (like walkers or wheelchairs, and diabetic equipment), and some home health care. Unlike Part A, most people pay a monthly premium for Part B. In 202, the standard premium is $185, although it may be higher depending on your income.

Part B also comes with an annual deductible ($257 in 2025), and after that, you typically pay 20% of the Medicare-approved amount for services.

Together, Part A and Part B are known as Original Medicare or Traditional Medicare. While they cover a broad range of services, they don’t cover everything, most notably, they don’t cover prescription drugs, vision, dental, hearing aids, or long-term care. This leads many people to consider additional coverage.

Part C (Medicare Advantage)

Part C, also known as Medicare Advantage, is an alternative to Original Medicare. These are private insurance plans approved by Medicare that bundle Part A and Part B coverage and often include additional benefits like dental, vision, hearing, fitness programs, and most importantly—prescription drug coverage (Part D). Medicare Advantage plans are offered by private insurance companies and vary by county and ZIP code. Premiums, copays, provider networks, and out-of-pocket costs can differ significantly between plans, so it’s important to compare carefully.

One key difference between Original Medicare and Medicare Advantage is that Advantage plans typically operate with provider networks think HMOs or PPOs aka Managed Care Plans, so your choice of doctors and hospitals may be more limited.

Part D (Prescription Drug Coverage)

Part D helps cover the cost of prescription medications and is offered through private insurance companies. If you have Original Medicare and want drug coverage, you’ll need to enroll in a standalone Part D plan. If you choose a Medicare Advantage plan, it may include Part D coverage as part of the package. Each Part D plan has its own list of covered drugs (called a formulary), which is divided into tiers that affect your cost. It’s important to review whether your medications are covered under the plan you’re considering. Part D plans also come with premiums, deductibles, and copays or coinsurance.

If you don’t sign up for Part D when you’re first eligible and you don’t have other creditable drug coverage, you may face a permanent late enrollment penalty.

Supplementing Your Medicare Coverage (Medigap)

Another important part of the Medicare conversation is Medicare Supplement Insurance, also known as Medigap. These are additional policies sold by private companies to help pay some of the costs not covered by Original Medicare, like copayments, coinsurance, and deductibles.

Medigap plans work only with Original Medicare and give you the flexibility to see any doctor who accepts Medicare nationwide. There are different types of Medigap plans (labeled Plan A, Plan G, Plan N, etc.), each offering a standardized set of benefits.

While Medigap plans can help reduce your out-of-pocket costs, you must also enroll in a standalone Part D plan to cover prescriptions.

How the Parts Work Together

Here are a few common combinations people choose:

• Original Medicare (Part A + Part B) + Part D + Medigap: Offers the most flexibility with providers and lowers out-of-pocket costs, but comes with multiple premiums.
• Medicare Advantage (Part C): Offers all-in-one convenience, often with extra benefits, but may require you to stay within a provider network.

It’s essential to evaluate your health needs, budget, and preferences before deciding which path to take.

What Medicare Doesn’t Cover

It’s also important to be aware of what Medicare does not cover, so you can plan accordingly. Original Medicare does not cover:

• Routine dental care
• Vision care (like eye exams or glasses)
• Hearing aids and exams
• Long-term care (such as assisted living or nursing home care beyond short-term rehab)
• Most care received outside of the U.S.

Some Medicare Advantage plans offer coverage for some of these services, so they may be worth exploring if these benefits are important to you.

Tips for Getting Started

• Start early: Begin researching your Medicare options at least 3-6 months before your 65th birthday.
• Make a list: Write down your preferred doctors, prescriptions, and healthcare priorities.
• Use tools: Medicare.gov has a great Plan Finder tool to compare plans in your area.
• Talk to someone: A licensed Medicare agent can help you navigate the options and avoid costly mistakes.

Finding Your Best Fit with Medicare Coverage

Understanding Medicare’s structure is the first step in making an informed decision. Each part plays a unique role, and depending on your personal circumstances, you may need one part, several parts, or a combination of parts. Whether you choose Original Medicare, add a Medigap and Part D plan, or go with a Medicare Advantage plan, the key is choosing the coverage that aligns with your healthcare needs, preferences, and financial situation. Taking the time to learn your options now will save you time, money, and stress later on.

About the Author: Alyssa Gonzales of The Gonzales Agency is Medicare Broker Licensed in TN, CO, IA, IN, KS, LA, ME, ND, OR, TX, WA and WI.