Medicare has four main plan types, and which one suits you depends on how you want to pay for care and which doctors you can see

Medicare comes in two broad structures: Original Medicare (Parts A and B) and Medicare Advantage (Part C). Within those, you layer prescription drug coverage (Part D) or skip it if you have other coverage. The choice is not about which is "best" — it is about which matches your health needs, your budget, and the doctors you want to use.

Original Medicare is run by the federal government. You pay a monthly premium for Part B (doctor visits), and Medicare pays its share of approved services. You can see any doctor who accepts Medicare, anywhere in the country. Medicare Advantage is sold by private insurance companies. You pay a monthly premium to the insurance company instead of Medicare, and in exchange you usually pay less out of pocket — but only if you use doctors and hospitals in the plan's network.

Most people choose between these two structures when they turn 65 or become may be able to access. The decision is not permanent — you can switch during the annual enrollment period each fall.

Key Takeaways

  • Original Medicare (Parts A and B) lets you see any doctor who accepts Medicare, but you pay a percentage of costs after you meet your deductible.
  • Medicare Advantage (Part C) is sold by private insurers, usually costs less out of pocket, but requires you to use doctors in the plan's network.
  • Part D (prescription drug coverage) is separate from both and must be chosen at 65 or when you first become may be able to access, or you may pay a penalty later.
  • Supplemental insurance (Medigap) works only with Original Medicare and covers costs that Medicare does not pay.
  • You can change plans once a year during the open enrollment period from October 15 to December 7.

Original Medicare: Parts A and B

Part A covers hospital stays, skilled nursing facility care, hospice, and home health services. Most people do not pay a monthly premium for Part A because they or their spouse paid Medicare taxes while working. Part A has a deductible — the amount you pay out of pocket before Medicare starts paying — and it resets each benefit period.

Part B covers doctor visits, outpatient care, medical equipment, and preventive services. You pay a monthly premium for Part B, and the amount depends on your income. After you meet the Part B deductible, Medicare typically pays 80 percent of approved services and you pay 20 percent. You can see any doctor in the United States who accepts Medicare assignment, meaning they accept Medicare's payment as full payment for the service.

With Original Medicare, you are responsible for any costs Medicare does not cover. This is where Medigap (supplemental insurance) comes in. Medigap is sold by private insurers and covers some or all of the costs that Original Medicare leaves unpaid — deductibles, coinsurance, and copayments. You buy Medigap in addition to Original Medicare, not instead of it.

Medicare Advantage: Part C

Medicare Advantage is a way to receive your Part A and Part B benefits through a private insurance company instead of the federal government. You still pay the Part B premium to Medicare, but you also pay a monthly premium to the insurance company — sometimes zero, sometimes $50 or more per month. In return, the insurance company usually covers more services than Original Medicare does, such as dental, vision, or fitness programs.

The trade-off is that you must use doctors and hospitals in the plan's network. If you see an out-of-network provider, you pay more or the plan may not cover it at all. Some Medicare Advantage plans are Health Maintenance Organizations (HMOs), which require you to pick a primary care doctor who coordinates your care. Others are Preferred Provider Organizations (PPOs), which let you see specialists without a referral and sometimes cover out-of-network care at a higher cost.

Medicare Advantage plans often have lower out-of-pocket costs than Original Medicare if you use in-network providers, but they come with annual limits on what you pay out of pocket. Once you hit that limit, the plan covers most remaining costs for the rest of the year.

Part D: Prescription Drug Coverage

Part D is prescription drug coverage sold by private insurance companies. It is separate from Parts A, B, and C — you choose it independently. Part D is optional, but if you do not enroll when you first become may be able to access at 65, you may pay a permanent penalty on your premium if you enroll later.

Part D plans vary widely in which drugs they cover, how much you pay, and which pharmacies you can use. Most plans have a monthly premium, a deductible, and then a tiered cost structure: you pay one amount for generic drugs, more for brand-name drugs, and the most for specialty drugs. Once you and the plan together spend a certain amount on drugs in a year, you enter the "donut hole" — a coverage gap where you pay more out of pocket — until you reach a spending threshold, after which the plan covers most costs.

If you have Original Medicare, you add Part D separately. If you have Medicare Advantage, the plan usually includes prescription drug coverage, though you may have the option to add a separate Part D plan if the Advantage plan's drug coverage does not meet your needs.

Medigap: Supplemental Coverage for Original Medicare

Medigap is supplemental insurance that works only with Original Medicare. It covers costs that Medicare does not pay: deductibles, coinsurance, and copayments. Medigap is sold by private insurers and comes in standardized plans labeled A through N (some states offer additional plans). Each letter represents a different combination of benefits.

For example, Plan G covers the Part B deductible, coinsurance, and copayments. Plan N covers most of the same but charges you a copayment for some doctor visits and emergency room visits. You choose which plan fits your budget and expected health needs. Medigap premiums vary by insurer and by your age and health history, depending on your state's rules.

You cannot use Medigap with Medicare Advantage — the two are mutually exclusive. If you have Medicare Advantage, the plan itself is responsible for covering costs that Original Medicare would not, so you do not need Medigap.

Comparing Costs Across Plan Types

Original Medicare plus Medigap typically costs more in monthly premiums but less in out-of-pocket costs when you use care, because Medigap covers most of what you would otherwise pay. Medicare Advantage typically costs less in monthly premiums but more in out-of-pocket costs per visit, and only if you use in-network providers.

The actual cost depends on your health, how often you see doctors, which drugs you take, and which doctors you want to use. Someone who sees many specialists may pay less with Original Medicare because any doctor who accepts Medicare is in-network. Someone who is healthy and uses few services may pay less with Medicare Advantage because the monthly premium is lower and the out-of-pocket limits protect against unexpected costs.

Part D costs vary by plan and by the drugs you take. Some plans are cheaper if you take generic drugs; others offer better coverage for specialty drugs. Comparing plans side by side using the official Medicare plan finder is the only way to know your actual costs for your specific situation.

When You Can Change Plans

You can change Medicare plans once a year during the Annual Enrollment Period (AEP), which runs from October 15 to December 7. Changes take effect January 1. If you miss this window, you cannot change plans until the next October unless you have a may have access to life event — such as moving out of your plan's service area, losing other health coverage, or becoming newly may be able to access for Medicaid.

If you are new to Medicare at 65, you have a Initial Enrollment Period (IEP) of seven months centered on your 65th birthday month. During this time, you can enroll in Original Medicare, Medicare Advantage, and Part D without penalty. If you delay enrollment past this period and do not have other may have access to coverage, you will pay a permanent penalty on your premiums.

Frequently Asked Questions

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

No. You choose one or the other. If you enroll in Medicare Advantage, your Original Medicare coverage ends. If you later switch back to Original Medicare, you can enroll in Medigap, but only during certain windows — missing the window can mean paying higher premiums or being denied coverage.

Do I have to choose a plan at 65, or can I wait?

You have seven months to enroll (your Initial Enrollment Period). If you delay past that and do not have other health coverage, you will pay a permanent penalty added to your Part B and Part D premiums for as long as you have Medicare. The penalty does not go away.

What happens if I move to a different state?

Medicare Advantage plans are regional, so your plan may not be available in your new state. Original Medicare works everywhere. If you move, you can switch plans outside the normal enrollment period. Contact Medicare or your current plan to report the move and see what options are available in your new location.

Is prescription drug coverage really separate from everything else?

Yes. Part D is its own choice. If you have Original Medicare, you add Part D separately. If you have Medicare Advantage, the plan usually includes drug coverage, but you can add a separate Part D plan if you want. You choose Part D at the same time you enroll in Medicare, or during the annual enrollment period.

What if I cannot afford any of these plans?

If your income is low, you may be able to get help paying premiums and out-of-pocket costs through Medicare Savings Programs or Extra Help (for Part D). These are run by your state. Contact your state Medicaid office or call 1-800-MEDICARE to see if you may have access to.