You may need additional coverage even with Medicare, depending on your situation and what Medicare covers

Medicare covers hospital stays, doctor visits, and some preventive care, but it does not cover everything. Gaps exist in prescription drug coverage, dental work, vision care, hearing aids, and long-term care. Whether you need extra insurance depends on what you use, what you can afford out of pocket, and whether you may have access to for programs that fill those gaps.

The most common forms of additional coverage are Medigap (supplemental insurance sold by private companies), Medicare Advantage (an alternative to Original Medicare that includes drug coverage and often dental or vision), and Medicaid (a joint federal-state program for people with low income). Some people need none of these; others need all three.

Key Takeaways

  • Medicare Part A and Part B do not cover dental, vision, hearing, or most prescription drugs, so most people add coverage for at least one of these.
  • Medigap is supplemental insurance that covers costs Medicare leaves behind, such as copays and coinsurance, but you must have Original Medicare to buy it.
  • Medicare Advantage is an alternative to Original Medicare that bundles hospital, doctor, and drug coverage, usually with lower premiums but higher out-of-pocket limits.
  • Medicaid covers gaps for people with low income and assets, and in some states it covers long-term care that Medicare does not.
  • If you have employer coverage or union retiree coverage, you may not need Medigap or Advantage, but you should check what it covers before turning it down.

What Medicare does and does not cover

Medicare Part A covers inpatient hospital care, skilled nursing facility stays (up to 100 days per benefit period), hospice, and some home health care. Part B covers doctor visits, outpatient procedures, lab work, and some preventive services. Together, they do not cover dental cleanings or dentures, eyeglasses or contact lenses, hearing aids, routine foot care, or most prescription drugs taken at home.

You also pay out-of-pocket costs that Medicare does not cover: a deductible for Part A (currently $1,676 per benefit period, though this amount changes yearly), a deductible for Part B (currently $240 per year), and 20 percent coinsurance for most Part B services after you meet the deductible. Part A has copays for hospital stays beyond 60 days. These costs add up quickly if you have a serious illness or multiple chronic conditions.

Prescription drug coverage is separate. Part D is optional and covers medications, but it has a deductible, copays, and a coverage gap (called the "donut hole") where you pay more out of pocket. If you do not enroll in Part D when you first become may be able to access, you may pay a penalty for as long as you have Medicare.

Medigap: supplemental insurance for Original Medicare

Medigap is sold by private insurance companies and works alongside Original Medicare (Part A and Part B). It covers some or all of the costs that Medicare leaves behind: deductibles, copays, and coinsurance. It does not cover dental, vision, hearing, or long-term care, and it does not include prescription drug coverage — you still need Part D for that.

Medigap plans are standardized by the federal government, so Plan G from one company covers the same things as Plan G from another company. The main difference is price. Plans range from Plan A (the most basic, covering only Part A and Part B deductibles and coinsurance) to Plan G and Plan N (more comprehensive). Most people choose Plan G or Plan N because they cover most out-of-pocket costs.

You can only buy Medigap if you have Original Medicare. If you choose Medicare Advantage instead, you cannot use Medigap. The best time to buy Medigap is during your Medigap open enrollment period, which is six months from the month you turn 65 and enroll in Part B. During this window, insurance companies cannot deny you or charge you more based on your health history. Outside this window, they can.

Medicare Advantage: an alternative to Original Medicare

Medicare Advantage (Part C) is an alternative way to get Medicare benefits. Instead of Original Medicare plus Medigap, you get hospital, doctor, and drug coverage all in one plan from a private insurance company. Most Advantage plans include dental, vision, and hearing coverage, and many include fitness benefits or transportation to medical appointments.

The trade-off is that Advantage plans have networks — you usually must see doctors and hospitals in the plan's network, except in emergencies. Out-of-pocket limits are capped by law (currently $7,550 for in-network care in 2024, though this changes yearly), so your costs are predictable. Premiums are often lower than Original Medicare plus Medigap, sometimes even zero.

You can switch between Original Medicare and Advantage during the annual Medicare Advantage open enrollment period (January 1 to March 31 each year). If you switch to Advantage and later want to go back to Original Medicare, you may have a limited window to do so without medical underwriting, depending on your state and circumstances.

Medicaid for people with low income

Medicaid is a joint federal-state program for people with low income and limited assets. If you may have access to, it covers costs that Medicare does not: dental, vision, hearing, and long-term care (nursing home or home care). Medicaid also covers the Medicare premiums, deductibles, and copays you cannot afford.

Income and asset limits vary by state. In most states, you must have income below 100 to 135 percent of the federal poverty line and assets below $2,000 (or $3,000 if you are married). Some states are more generous. If you have both Medicare and Medicaid, you are called dual may be able to access, and Medicaid fills in gaps that Medicare leaves.

To learn about you may have access to, contact your state Medicaid office or call 211 to be referred to a local counselor. The process process varies by state but usually involves submitting proof of income, assets, and citizenship. Processing can take 30 to 60 days.

When you may not need additional coverage

If you have retiree health coverage from a former employer or union, you may not need Medigap or Advantage. Employer plans often cover prescription drugs, dental, and vision, and they may cover costs that Medicare does not. Before you turn down employer coverage to save money, check what it covers and what it costs. Losing it may be hard to get back.

If you are healthy, have low medical costs, and can afford out-of-pocket expenses, you might choose Original Medicare without Medigap or Advantage. This is rare and risky — a single hospitalization or serious illness can cost tens of thousands of dollars. Most financial advisors recommend some form of additional coverage.

How to decide what coverage you need

Start by listing what you use: prescription drugs, dental work, vision care, hearing aids, or long-term care. Then check what each option covers and what it costs. Medicare.gov has a tool called the Plan Finder that shows you Advantage and Part D plans available in your area, what they cover, and their premiums and out-of-pocket costs based on your prescriptions.

For Medigap, get quotes from at least three companies. Prices vary widely even for the same plan. If you think you might may have access to for Medicaid, explore — it costs nothing and can save you thousands in premiums and out-of-pocket costs.

If you are confused, contact your State Health Insurance information Program (SHIP). It is free, unbiased, and staffed by counselors who know your state's rules. You can find your local SHIP at shiptalk.org or by calling 1-877-839-2675.

Frequently Asked Questions

Can I have both Medigap and Medicare Advantage?

No. Medigap only works with Original Medicare. If you enroll in Medicare Advantage, you cannot buy Medigap. If you already have Medigap and switch to Advantage, your Medigap policy ends. You can switch back to Original Medicare and Medigap during the annual open enrollment period, but you may not be able to buy the same Medigap plan you had before.

What happens if I do not enroll in Part D when I turn 65?

You can enroll later, but you will pay a permanent penalty for each month you were may be able to access but did not sign up. The penalty is about 1 percent of the national average Part D premium per month, added to your premium for as long as you have Medicare. If you have creditable coverage (such as employer coverage) when you become may be able to access, you can delay without penalty.

Can I switch from Medicare Advantage back to Original Medicare anytime?

You can switch during the annual Medicare Advantage open enrollment period (January 1 to March 31). If you switch back to Original Medicare outside this window, you may not be able to buy Medigap without medical underwriting, meaning the insurance company can deny you or charge you more based on your health. Some exceptions exist for people who move out of their plan's service area or lose employer coverage.

Does Medicare cover long-term care or nursing home stays?

Medicare covers skilled nursing facility stays for up to 100 days per benefit period, but only after a hospital stay of at least three days. It does not cover custodial care (help with daily activities like bathing or dressing) or long-term nursing home care. Medicaid covers long-term care for people who may have access to based on income and assets. Long-term care insurance is another option, though it is expensive and must be bought before you need care.

What if I am still working and have employer health insurance?

You can delay enrolling in Medicare Part B without penalty if you have employer coverage and are still working. When you leave your job or lose coverage, you have eight months to enroll in Part B without penalty. Tell your employer's benefits office that you are delaying Medicare so they know to keep you on their plan. If you do not tell them, they may assume you have Medicare and stop your coverage.