Medicare explained

Time to look at your Medicare options

OK, you understand the basics of Medicare Parts A, B, C and D. Now you're ready to make some big choices.

Will you go the Original Medicare road, and maybe pick up Medigap and drug coverage, too?

Or, head the Medicare Advantage way?

Either way, you can relax. You're covered, and you're still in the Medicare program.

Scroll down to see more, or read a text explanation instead.

Everyone starts with Medicare Part A

Medicare Part A is hospitalization insurance. Part A covers 80% of hospital charges. It usually costs zero dollars a month, because people have paid payroll taxes for it while working. If not, you can purchase Medicare Part A.

Once you have Medicare, you have choices.

Your first choice is whether or not to purchase Medicare Part B. Part B is medical insurance. It covers 80% of doctor visits, lab tests, medical equipment, etc. It costs a monthly premium. If you don't choose Medicare Part B when you are first eligible for Medicare, you can buy it later, but you will pay a penalty.

If you sign up for Medicare Part B, you have more choices.

You can choose to do nothing, just keep A and B.

You can choose to add on a Medigap supplement insurance policy to pay some of the costs that Medicare Parts A and B don't cover.

Or you can choose to get your Medicare Parts A and B through a private insurance company Medicare Advantage plan.

Option 1: Just A and B

If you have Medicare Parts A and B and do nothing, 80% of your hospital and medical costs are covered by the federal Original Medicare program. You pay the rest. You don't have drug coverage.

Option 2: Add Medigap

You can choose to add a Medigap supplement insurance policy from a private insurance company to pay some of the costs not covered by Medicare Parts A and B. Then your doctors and hospitals will bill both Original Medicare and your Medigap company. There are standard Medigap policies available nationally, named Plan A through Plan N. Every company's Plan A gives you the same coverage. The only difference would be the premium they charge and the service they offer.

Option 3: Trade for Medicare Advantage

Instead of adding on a Medigap supplement policy, you can choose to get all your Medicare Parts A and B coverage through a private insurance company. These plans are called Medicare Advantage plans. Sometimes, Medicare Advantage is called Part C. Most Medicare Advantage plans also give you Medicare Part D, which is drug coverage. Then they are called M-A-P-D plans, Medicare Advantage plus Prescription Drug. The premium for an MAPD plan is usually lower than buying a Medicare Advantage plan and a separate drug plan. If you choose an MA or MAPD plan you will have to keep paying your monthly Part B premium in addition to your Medicare Advantage plan premium. When you choose Medicare Advantage or MAPD, you get one insurance card and get all your Medicare coverage from one company. Medicare Advantage MA and MAPD plans may offer extras like fitness programs or hearing and vision coverage, too.

Option 4: Medicare Part D drug coverage

You can add a stand-alone Medicare Part D prescription drug plan from a private insurance company. You can add it if you have just Medicare Part A, or A and B, or A and B and Medigap, or a Medicare Advantage plan that doesn't offer drug coverage. You can't add a Part D plan if you have an MAPD plan, because MAPD plans include it already.

You're covered no matter what you choose

Whatever combination of plans and coverage you choose, you are covered by Medicare.