Original Medicare is broken down into three main parts: A, B and D.

Part A (hospital insurance) covers most medically necessary hospital care, including skilled nursing facilities, hospice and some home health services. It is free if you have worked and paid Social Security taxes for at least 40 calendar quarters (10 years). If you haven’t worked that long or you’ve paid taxes for less time, you will pay a monthly premium.

Part B (medical insurance) covers most medically necessary doctors’ services, preventive care, hospital outpatient services, laboratory tests, x-rays, mental health care, durable medical equipment (oxygen equipment, medication pumps, wheelchairs, etc.), and some home health and ambulance services. You pay a monthly premium for this coverage.

Part D (prescription drug coverage) covers drug benefits for anyone with original Medicare. Private companies provide those benefits, separate from Part A and B plans, and typically have separate monthly premiums. Part D covers most oral PH medications.

As of 2025, Medicare Part D beneficiaries don’t have to pay more than $2,100 in out-of-pocket costs for covered drugs. Part D beneficiaries also can opt into the Medicare Prescription Payment Plan, which allows people to spread out prescription costs into monthly payments throughout the calendar year.

Medicare Advantage, sometimes called Medicare Part C, is an alternative to original Medicare. Under Medicare Advantage, private companies provide health insurance to Medicare beneficiaries.

Those insurance companies must offer the same benefits as original Medicare (Parts A and B), but have different rules, costs and coverage restrictions. For example, Medicare Advantage beneficiaries must receive care through providers in an insurer’s network rather than through a provider outside the network that accepts Medicare coverage.

Some Medicare Advantage plans – but not all – include Part D prescription drug coverage. Those with drug coverage allow beneficiaries to pay a single premium for all coverage rather than separate premiums for original Medicare and Part D. Advantage plans with prescription coverage typically are subject to any Part D regulations.

Each year, Medicare allows Medicare Advantage participants to switch Advantage plans or enroll in original Medicare. If your Advantage plan doesn’t seem like a good fit, you have a grace period to switch between Jan. 1 and March 31, in addition to the open enrollment period. The grace period is helpful in situations such as a doctor being out of network or you find out the plan doesn’t cover one of your drugs.

Medicare beneficiaries can buy a supplemental plan to cover health care expenses that Medicare parts A and B don’t pay for. Known as Medigap, or Part G, these policies are available only with original Medicare (parts A and B). People with Medicare Advantage plans (Part C) can’t buy supplemental Medigap insurance.

Anyone eligible for Medicare Part B can apply for a Medigap policy. However, eligibility is limited for those under 65 and can be more expensive. Companies that sell Medigap policies can review your medical records to decide whether to accept your application through a process called medical underwriting.

When you turn 65, you have six months to enroll in a Medigap plan. During that time, insurance companies can’t deny you coverage because of medical underwriting or pre-existing health conditions. You can enroll in any Medigap policy and generally will get better prices with more plans to choose from during this one-time, six-month period.

Federal law doesn’t require insurance companies to sell Medigap policies to people under age 65. For those with Medicare coverage through disability, Medigap availability varies by state. Many states require Medigap insurers to offer at least one policy to Medicare recipients younger than 65. Some insurers might limit coverage to one or two plans and to people with specific conditions.

Premiums
Nearly every Medicare plan carries a monthly premium for Part B coverage. Most Advantage plans have premiums, but some don’t, and others help with Part B premium coverage.

Medigap plans have a monthly premium in addition to the Part D premium for your prescription drug coverage and the Part B premium for original Medicare.

Out-of-pocket costs
Each Advantage plan sets out-of-pocket costs for deductibles, copayments and coinsurance for various services. Original Medicare typically charges a 20% coinsurance for Part B-covered services, and Medigap plans help cover that cost.

Choosing your provider
Advantage plans use the health insurer’s provider network. Medigap uses original Medicare’s provider network.

Referrals
Some Advantage plans require a referral to see a specialist. If original Medicare doesn’t require a referral for specialists, then you won’t need one with Medigap.

You’ll have a seven-month period to enroll in Medicare without penalty. The initial enrollment period starts three months before you turn 65, continues during the month of your 65th birthday and ends three months after.

If you sign up in the last four months of your initial enrollment period, including your birthday month, then your Medicare Part B coverage won’t start until the first of the month after you sign up.

Note: It’s best to enroll in a prescription plan when you sign up for original Medicare. If you enroll later or go without creditable drug coverage while you’re eligible for Medicare, you’ll have to pay a lifelong late enrollment penalty on your Part D premium.

If you don’t enroll in Medicare during the initial period, you can enroll during the general enrollment period between Jan. 1 and March 31. You also can adjust your Medicare plan during the general enrollment period. However, you could face a lifelong penalty for each year you were unenrolled in Part B, as well as a penalty if you don’t qualify for premium-free Part A coverage. You must pay the penalty for as long as you receive insurance coverage through Medicare.

You can sign up for Medicare without penalty during a special enrollment period if you turned down Medicare when you became eligible because you had other insurance. If you or your spouse have health insurance through an employer, you can sign up for Medicare:

• Any time while you are covered by the group health plan.
• Eight months from the day you or your spouse stop working, even if your group health plan continues.
• Within eight months of the group health plan ending while you or your spouse continue to work.

You can enroll in or change your Medicare Part D or Medicare Advantage each year during the fall open enrollment period. Open enrollment, also known as the Annual Coordinated Election Period, is Oct. 15 through Nov. 7. Enrollments and changes made during this period become effective Jan. 1.