Understanding Medicare
Medicare is the federal health insurance program for Americans 65 and older. This guide explains every part — A, B, C, and D — in plain language so you can make confident decisions about your coverage.
The Four Parts of Medicare
Medicare is divided into four distinct parts. Each part covers a different category of health care.
Part A
Hospital Insurance
Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. Most people receive Part A premium-free if they or their spouse paid Medicare taxes for at least 10 years while working.
- Inpatient hospital care
- Skilled nursing facility care
- Hospice care
- Inpatient rehabilitation
- Some home health services
Typical Cost: $0 premium for most people (40+ quarters of Medicare taxes paid)
Part B
Medical Insurance
Part B covers medically necessary services like doctor visits, outpatient care, preventive services, and durable medical equipment. It pays 80% of approved costs, leaving you responsible for the remaining 20% — with no annual cap on that 20%.
- Doctor visits and specialist care
- Outpatient surgery
- Preventive screenings and vaccines
- Mental health services
- Durable medical equipment
Typical Cost: Standard premium of $174.70/month in 2024 (may vary with income)
Plan N
Cost-Sharing Alternative
Lower premiums than Plan G with small copays for some office visits and ER visits. A good balance of coverage and cost for healthy beneficiaries.
Plan G
Most Popular Supplement
Covers nearly everything Original Medicare doesn’t — except the Part B deductible. The most comprehensive option available to those new to Medicare after January 1, 2020.
Part C
Medicare Advantage
Medicare Advantage is an all-in-one alternative to Original Medicare, offered by private insurers approved by Medicare. These plans must cover everything Parts A and B cover and usually include Part D drug coverage. Many include extras like dental, vision, and hearing — often with a $0 monthly premium.
- Combines Parts A, B, and usually D
- Annual out-of-pocket maximum
- Often includes dental, vision & hearing
- May have a $0 premium
- Network-based (HMO or PPO)
Typical Cost: Often $0 premium; you still pay your Part B premium
Part D
Prescription Drug Coverage
Part D helps cover the cost of prescription drugs. Plans are offered by private insurers and vary widely in which drugs they cover (their formulary) and how much you’ll pay at the pharmacy. Failing to enroll when first eligible can result in a lifetime late enrollment penalty.
- Covers brand-name and generic drugs
- Each plan has its own formulary (drug list)
- Covers most FDA-approved drugs
- Available as standalone or bundled in Part C
- 2024 out-of-pocket cap: $8,000
Typical Cost: Average $41.63/month in 2024; varies by plan and drugs needed
Medicare Supplement (Medigap)
Medigap policies help pay for costs that Original Medicare doesn’t cover — like coinsurance, copayments, and deductibles.
Plan G
Most Popular Supplement
Covers nearly everything Original Medicare doesn’t — except the Part B deductible. The most comprehensive option available to those new to Medicare after January 1, 2020.
Plan N
Cost-Sharing Alternative
Lower premiums than Plan G with small copays for some office visits and ER visits. A good balance of coverage and cost for healthy beneficiaries.
Plan G
Most Popular Supplement
Covers nearly everything Original Medicare doesn’t — except the Part B deductible. The most comprehensive option available to those new to Medicare after January 1, 2020.
Plan N
Cost-Sharing Alternative
Lower premiums than Plan G with small copays for some office visits and ER visits. A good balance of coverage and cost for healthy beneficiaries.
Plan K/L
Lower Premium Option
Plans that cover a percentage of costs rather than 100%. Ideal for those who want protection from catastrophic costs but are comfortable with more cost-sharing.
Important: Medigap Open Enrollment Window
Your Medigap Open Enrollment Period is a one-time 6-month window that starts the month you’re 65 or older and enrolled in Part B. During this period, insurers cannot deny you coverage or charge you more due to pre-existing conditions. After this window closes, you may be subject to medical underwriting — making it much harder or more expensive to get coverage.
Medicare Advantage vs. Medigap Supplement
The most important decision most Medicare beneficiaries face. Here’s how to think about it.
Medicare Advantage
Best for: People who want low/no premiums and are comfortable with a network of providers
Medigap Supplement
Best for: People who want freedom to see any doctor and predictable out-of-pocket costs
Medicare FAQs
When should I sign up for Medicare?
You should sign up during your Initial Enrollment Period (IEP) — the 7-month window that starts 3 months before the month you turn 65. Signing up late can result in permanent premium penalties for Part B and Part D.
Do I need Medicare if I have employer coverage?
It depends on the size of your employer. If your employer has fewer than 20 employees, Medicare typically pays first and your employer plan pays second — so you should enroll in Medicare on time. If your employer has 20+ employees, your employer plan generally pays first, and you may be able to delay Medicare enrollment without penalty.
Can I be denied coverage for a pre-existing condition?
Medicare itself cannot deny coverage for pre-existing conditions. However, Medigap (Medicare Supplement) insurers can deny coverage or charge higher premiums outside of your guaranteed issue rights window. Medicare Advantage plans cannot use health status to deny coverage or charge higher premiums.
Is there a penalty for enrolling in Medicare late?
Yes. For Part B, the late enrollment penalty is 10% added to your premium for every 12-month period you were eligible but didn’t enroll — and that penalty is permanent. For Part D, the penalty is 1% of the national base beneficiary premium multiplied by the number of months you were without creditable drug coverage, also assessed permanently.
Medicare Supplement (Medigap)
What is the difference between Medicare and Medicaid?
Medicare is a federal program primarily for people 65 and older (and some with disabilities), regardless of income. Medicaid is a joint federal-state program based on income and financial need, for people with limited resources. Some low-income seniors qualify for both — these individuals are called ‘dual eligible’ and receive additional benefits.
Still Have Questions?
Our licensed Florida Medicare agents are here to help you apply this knowledge to your specific situation — at no cost to you.
