Medicare is confusing by design, or at least it seems that way. Four parts, lettered plans, enrollment windows, penalties for missing deadlines. But understanding Medicare is essential: the wrong choices can cost you thousands annually, and some mistakes can't be undone.
The Four Parts of Medicare
Part A: Hospital Insurance
Covers inpatient hospital stays, skilled nursing facility care (limited), hospice, and some home health care. Most people get Part A premium-free if they (or a spouse) paid Medicare taxes for 40+ quarters.
Part B: Medical Insurance
Covers doctor visits, outpatient care, preventive services, medical equipment, and some home health care. Standard premium is $185/month in 2025, but higher earners pay more through IRMAA.
Part C: Medicare Advantage
An alternative to Original Medicare (Parts A & B). Private insurance plans that bundle A, B, and usually D (drugs). Often includes extras like dental, vision, and hearing.
Part D: Prescription Drug Coverage
Covers prescription medications. Offered through private insurers. Premiums, deductibles, and drug coverage vary by plan.
Original Medicare vs. Medicare Advantage
Your fundamental choice is between two paths:
Original Medicare (Parts A + B) + Medigap + Part D:
- See any doctor/hospital that accepts Medicare
- No referrals needed for specialists
- Works anywhere in the US
- Medigap covers most out-of-pocket costs
- Predictable costs (higher premiums, fewer surprises)
Medicare Advantage (Part C):
- Network-based (HMO, PPO), may need referrals
- Often $0 premium beyond Part B
- Usually includes drug coverage
- Often includes dental, vision, hearing, fitness
- Out-of-pocket maximum caps your costs
Neither is universally better. Original Medicare + Medigap gives flexibility and predictability. Medicare Advantage often costs less upfront but has network restrictions.
Critical timing: Your Medigap Open Enrollment Period is 6 months starting when you're 65+ AND enrolled in Part B. During this window, insurers must sell you any Medigap plan regardless of health. Miss it, and you may face medical underwriting or denial.
๐ ๏ธ Compare Medicare Plans
Use the official Medicare Plan Finder to compare plans in your area. For free, unbiased counseling, contact your state's SHIP program.
Enrollment Periods You Must Know
Initial Enrollment Period (IEP): 7 months centered on your 65th birthday. This is when you sign up for Parts A and B. Don't miss it.
Annual Open Enrollment (AEP): October 15 - December 7. Switch between Original Medicare and Medicare Advantage, or change Part D plans.
Special Enrollment Periods: Triggered by life events like moving, losing employer coverage, or qualifying for Medicaid.
The Costly Mistakes
Missing enrollment deadlines: Part B late enrollment penalty is 10% higher premiums for each 12-month period you could have had Part B but didn't. This penalty lasts for life.
Not understanding IRMAA: High earners pay significantly more for Parts B and D. This is based on income from two years prior.
Missing the Medigap window: If you want Medigap, enroll during your Open Enrollment Period. Later, insurers can deny you based on health conditions.
What Medicare Doesn't Cover
- Long-term care: Nursing home stays beyond 100 days, assisted living
- Dental: Routine dental care, dentures
- Vision: Routine eye exams, glasses
- Hearing aids: Not covered by Original Medicare
- Care outside the US: Very limited coverage abroad
๐ Further Reading
"Medicare & You" Handbook โ The official CMS guide updated annually with current information.
"Get What's Yours for Medicare" by Philip Moeller โ A comprehensive guide to navigating Medicare decisions.
The Zen Take
Medicare decisions are some of the most consequential you'll make in retirement, and some mistakes can't be fixed. Don't wing it.
Take the time to understand your options, and if possible, consult with a Medicare specialist (SHIP counselors are free) before making choices you'll live with for decades.