Medicare comes in four main types: Original Medicare (Parts A and B), Medicare Advantage (Part C), Medigap (supplemental insurance), and Medicare Part D (prescription drug coverage)

These four types work differently and cover different things. Some people use Original Medicare plus a Medigap plan plus Part D. Others choose Medicare Advantage, which bundles hospital, medical, and often drug coverage into one plan. Understanding what each type covers — and what it does not — helps you pick the right combination for your situation.

The choice you make affects what you pay out of pocket, which doctors you can see, and how your prescriptions are covered. You can change your plan once a year during the Annual Enrollment Period (October 15 to December 7), so this decision is not permanent.

Key Takeaways

  • Original Medicare (Parts A and B) is run by the federal government and covers hospital stays, doctor visits, and some medical equipment, but leaves you responsible for deductibles and coinsurance.
  • Medicare Advantage (Part C) is sold by private insurance companies and bundles hospital, medical, and usually drug coverage into one plan, often with lower premiums but restricted networks of doctors.
  • Medigap is supplemental insurance sold by private companies that pays some or all of the costs Original Medicare does not cover, such as deductibles and coinsurance.
  • Medicare Part D is prescription drug coverage sold by private insurance companies and is separate from all other plan types — you can add it to Original Medicare or get it bundled into Medicare Advantage.

Original Medicare (Parts A and B): Government-run coverage with out-of-pocket costs

Part A covers inpatient hospital stays, skilled nursing facility care after a hospital stay, hospice care, and some home health services. You pay a deductible ($1,676 in 2024, though this amount changes yearly) for each hospital stay. After you meet the deductible, Medicare pays most costs, but you pay coinsurance for days 61 through 90 of a hospital stay.

Part B covers doctor visits, outpatient care, medical equipment like wheelchairs, and some preventive services. You pay a monthly premium (the standard amount is $164.90 in 2024 for most people, but higher earners pay more), an annual deductible ($240 in 2024), and then 20 percent coinsurance for most services after you meet the deductible.

Original Medicare has no network restrictions — you can see any doctor or hospital that accepts Medicare anywhere in the country. There is no maximum out-of-pocket limit, which means your costs could be very high if you have a serious illness or injury. This is why many people who choose Original Medicare also buy a Medigap plan.

Medicare Advantage (Part C): Private plans with networks and bundled coverage

Medicare Advantage is sold by private insurance companies (like UnitedHealthcare, Humana, and Anthem) and includes all the coverage of Parts A and B, usually bundled with Part D prescription drug coverage. Most plans are HMOs or PPOs, which means you choose doctors from a network and usually need a referral to see a specialist.

Medicare Advantage plans often have lower or zero monthly premiums than Original Medicare, and they include an out-of-pocket maximum — once you spend that amount on covered services in a year, the plan pays 100 percent of covered costs for the rest of the year. However, you typically pay higher copays and coinsurance for each visit or service, and you may face prior authorization requirements (the plan must approve a treatment before you receive it).

If you travel outside your plan's service area, you may not have coverage except for emergencies. Plans vary widely in which doctors and hospitals they include, so you need to check whether your current doctor is in the network before you enroll. Plans can also change their networks, formularies (drug lists), and service areas each year.

Medigap (Supplemental Insurance): Fills the gaps in Original Medicare

Medigap is sold by private insurance companies and is designed to pay some or all of the costs that Original Medicare does not cover — deductibles, coinsurance, and copays. There are ten standardized Medigap plans, labeled A through N. Each plan covers a specific set of benefits, so Plan G from one company covers the same things as Plan G from another company, though the premium may differ.

You can only use Medigap if you have Original Medicare (Parts A and B). You cannot combine Medigap with Medicare Advantage. The most popular plans are G, N, and F (though Plan F is no longer available to people newly may be able to access for Medicare after January 1, 2020). Plan G covers most of what Original Medicare does not, except for the Part B deductible.

Medigap premiums vary by age, location, and which plan you choose. You have the best rates if you enroll within six months of turning 65 or first becoming may be able to access for Medicare — after that window, insurance companies can charge more based on your health history. Once you have Medigap, you can see any doctor or hospital that accepts Medicare, just as with Original Medicare alone.

Medicare Part D: Prescription drug coverage as a separate choice

Part D covers prescription medications and is sold by private insurance companies. If you have Original Medicare, you must choose a Part D plan during your initial enrollment period or during the Annual Enrollment Period (October 15 to December 7 each year). If you do not enroll when you first become may be able to access and you go without coverage, you may pay a permanent penalty for as long as you have Medicare.

Part D plans vary in which drugs they cover, how much you pay for each drug, and which pharmacies you can use. Most plans use a tiered system: generic drugs cost less, brand-name drugs cost more, and some drugs may not be covered at all or may require prior authorization. You pay a monthly premium, and then you pay out-of-pocket costs until you reach a certain spending threshold, after which your costs drop.

If you have Medicare Advantage, most plans include Part D coverage already, so you do not choose a separate Part D plan. If you have Original Medicare and Medigap, you choose Part D separately. You can switch Part D plans once a year during the Annual Enrollment Period if you find a plan that covers your medications at a lower cost.

How to decide which type of plan is right for you

Start by listing the doctors and hospitals you use regularly, then check whether they are in the network of any Medicare Advantage plans you are considering. If your current doctors are not in any local Medicare Advantage network, Original Medicare plus Medigap may be a better fit because you can see any Medicare-accepting provider.

Next, list your regular medications and check the Part D formulary (drug list) for plans you are considering. Some drugs are expensive or hard to find on certain plans. If you use many medications or expensive specialty drugs, you may want to compare the total cost of Part D premiums plus your out-of-pocket drug costs across a few plans.

Consider how much you typically spend on healthcare. If you are generally healthy and do not see doctors often, a Medicare Advantage plan with a low premium might save you money. If you have multiple chronic conditions or see specialists regularly, Original Medicare plus Medigap may cost less overall because there is no network restriction and no prior authorization requirement.

When and how to change your plan

You can change your Medicare plan once a year during the Annual Enrollment Period, which runs from October 15 to December 7. Changes take effect on January 1 of the following year. If you miss this window, you generally cannot change plans until the next year, unless you have a may have access to life event (such as moving to a new state, losing employer coverage, or getting married).

To change plans, you can visit Medicare.gov, call 1-800-MEDICARE, or work with a local counselor through your State Health Insurance information Program (SHIP). SHIP counselors are free and can help you compare plans side by side based on your doctors, medications, and budget. You do not need to contact your current plan to switch — your new plan handles the enrollment.

Questions to ask your doctor or insurance company

Before you enroll in a plan, ask your doctor whether they accept that plan and whether you need a referral to see a specialist. Ask your insurance company or pharmacist which Part D plan covers your medications and at what cost. If you are considering a Medicare Advantage plan, ask whether prior authorization is required for any treatments you receive regularly.

If you are unsure whether you need Medigap, ask your doctor or a SHIP counselor to estimate your likely out-of-pocket costs under Original Medicare alone versus Original Medicare plus a Medigap plan. This comparison helps you see whether the Medigap premium is worth the protection it offers.

Frequently Asked Questions

Can I have both Medicare Advantage and Medigap at the same time?

No. Medigap is designed to supplement Original Medicare, not Medicare Advantage. If you have Medicare Advantage, you cannot enroll in Medigap. If you switch from Medicare Advantage to Original Medicare, you can then enroll in Medigap, but you may pay higher premiums if you are outside the initial enrollment window.

Do I have to choose Part D if I do not take any medications?

You do not have to enroll in Part D if you do not take medications, but if you enroll later without a gap in coverage, you may pay a permanent penalty. If you think you might need medications in the future, it is usually cheaper to enroll now and pay the premium than to wait and face the penalty.

What happens to my Medicare plan if I move to a different state?

Medicare Advantage and Part D plans are usually limited to specific service areas, so your plan may not be available in your new state. Original Medicare and Medigap work anywhere in the country. If you move, contact your plan to see whether you can stay enrolled or whether you need to switch to a plan available in your new location.

How do I know if my doctor accepts Medicare?

You can search for doctors on Medicare.gov or call your doctor's office directly and ask. If you are considering a specific Medicare Advantage plan, ask the plan's customer service whether your doctor is in their network. Networks change, so it is worth checking every year during the enrollment period.

What is the difference between a copay and coinsurance?

A copay is a fixed dollar amount you pay for a service (for example, $25 for a doctor visit). Coinsurance is a percentage of the cost you pay after you meet your deductible (for example, 20 percent of the cost of an X-ray). Original Medicare uses coinsurance; Medicare Advantage plans often use copays.