Medicare 101: understanding your coverage options

Now that you know when to enroll in Medicare, let's talk about what you're actually enrolling in. Medicare can seem like alphabet soup, but we're going to break it down in plain English.

What is Medicare?

Medicare is the federal health insurance program for people 65 and older. It provides solid basic coverage for many medical services, but it doesn't cover everything. Most people add extra coverage to fill in the gaps.

The four parts of Medicare

Medicare Part A: Hospital insurance

Part A covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health services. Most people don't pay a premium for Part A because they paid Medicare taxes while working.

The catch: deductibles and co-insurance.

Medicare Part B: Medical insurance

Part B covers doctor visits, outpatient care, preventive services, and medical equipment. You'll pay a monthly premium for Part B, typically deducted from your Social Security check.

The catch: you're responsible for 20% of most covered services — with no cap on out-of-pocket costs.

Medicare Part C: Medicare Advantage plans

Part C is an alternative way to get your Medicare benefits through private insurance companies. These "all-in-one" plans include Parts A, B, and usually Part D, often with extra benefits like dental and vision.

We'll explore Medicare Advantage in detail in our next post.

Medicare Part D: Prescription drug coverage

Part D helps cover prescription medications. These plans are offered by private companies and have different formularies, so choose a plan that covers your specific medications.

What original Medicare covers

Original Medicare (Parts A and B together) provides solid coverage:

• Hospital stays and doctor visits
• Preventive services like screenings and vaccines
• Lab tests, x-rays, and medical equipment
• Some home health services

What original Medicare doesn't cover

Here's where things get expensive without additional coverage:

• No cap on out-of-pocket costs: That 20% co-insurance can add up quickly.
• Deductibles: You'll pay deductibles before coverage kicks in.
• Prescription drugs: Original Medicare doesn't include prescription coverage.
• Dental, Vision, and Hearing: Routine care isn't covered.
• Long-term care: Medicare doesn't cover nursing home custodial care.

These gaps can lead to thousands in out-of-pocket expenses. That's why most people choose additional coverage.

Two paths forward

Option 1: Original Medicare + Medigap+ Part D

Add a Medigap plan to cover deductibles and co-insurance, plus a separate Part D plan for prescriptions.

Option 2: Medicare Advantage (Part C)

Switch to a Medicare Advantage plan that bundles hospital, medical, and usually prescription coverage — often with extra benefits.

Both options have pros and cons depending on your health needs, preferred doctors, and budget. We'll help you compare them in our next blog post.

Common Medicare myths, busted

Myth: Medicare covers everything.

Truth: Medicare provides excellent basic coverage but has gaps that can be costly without additional coverage.

Myth: I can enroll anytime.

Truth: You have specific enrollment periods. Missing them can result in penalties and coverage gaps.

Myth: All Medicare plans are the same.

Truth: Plans vary in coverage, costs, and provider networks.

You don't have to navigate this alone.

Medicare has a lot of moving parts. That's exactly why LMIA's Medicare experts are here — to translate the complexity into clear choices that make sense for your life.

In our next post, we'll compare Medigap and Medicare Advantage plans so you can decide which path is right for you. Contact LMIA to schedule a consultation with a Medicare specialist.