Medicare Tutorial & Your Life Changing Choices
The choices you make regarding the type of medicare coverage you get can dramatically affect your quality of life, and lenght of life. Choising a plan due only to low premiums could result in higher total cost with a major illness. All plans must provide treatment for every kind of illment. But some plans offer much better, more advanced and life saving advantages. Freedom of doctor choices and freedom to travel can also be a factor. Please make your medicare choices with full knowledge of the Pros and Cons.
Original Medicare Parts A & B, Supplement, Medigap and Advantage Plans
Medicare Basics and Original Medicare
Medicare generally starts at age 65 while Social Security can begin at any age between 62 and 70. When you start Medicare is an independent timing decision from when you start Social Security. You will need to make decisions regarding if you wish to enroll in only Medicare Part A and Part B (also known as original Medicare) by itself. Or if you want additional coverage. Original Medicare is essentially an 80/20 plan where you will be responsible for typically 20 percent of the medical expenses. Part A insurance is free for most people 65 and older. Part B insurance costs about $206 per month (2026) but can be higher if you are a higher income earning person. Individuals with higher incomes will pay a higher premium based on their income-related monthly adjustment amount (IRMAA), which is calculated based on their modified adjusted gross income from two years earlier.
For additional coverage you can purchase a Medicare Supplement program, also known as a Medigap coverage. This has the effect of changing the 80/20 plan into a 100% plan. This Medigap insurance covers most of the co-payments and coinsurance not covered by original Medicare Part A and Part B. Various Medigap plans are available, but Plan G is the most popular. Don’t confuse the “Part” and “Plan” terminology in Medicare language. If you travel, Supplemental or Medigap plans are highly preferable since they provide coverage in all 50 states plus US territories.
Supplemental (Medigap) plans do NOT require you to work through a primary care physician. You do NOT need a referral to get an appointment with a specialist doctor.
Any treatment recommended or prescribed by your doctor will be covered with a Medicare Supplement or Medigap plan. More and possibly better treatments are available with a Medicare Supplement or Medigap plan because you and your doctor jointly decide what treatments are appropriate. Treatments are not limited by an medicare advantage insurance company and their policies.
Medicare Advantage Plans
Medicare Advantage plans, MA, also known as Medicare Part C, generally have much lower or often zero monthly premium cost. But don’t let the lower premium cost and cleaver marketing name (Advantage) make you think you are getting special benefits. In fact, the opposite is true. These lower premiums come with many reductions in services. Including your area of service is reduced from nationwide to only your local community. Medical service must come from only your primary care physician, PCP, or from a provider recommended by your PCP. You mostly cannot self-select your specialist doctors. Plus, many of the treatments you would prefer would not be approved by the insurance company due to their cost controls.
Understand, that a Medicare Advantage plan must provide a treatment for every type of condition. However, treatment options are limited by the insurance company which may be in conflict with your or your doctor’s desires. Advantage plans may come with some limited vision, hearing and dental benefits, but these benefits are often extremely limited. Many services within a MA plan may have a co-pay, coinsurance or deductible payment. Although these expenses have a predetermined maximum annual limit, these expenses can total more than what a supplemental plan’s annual premiums would have been. Thus, what you saved by avoiding supplemental plan premiums is offset by the additional MA plan’s co-pay and coinsurance payments.
Medicare Parts A & B
You will also need to decide if a prescription drug plan is right for you. If you have original Medicare Parts A & B with or without a supplement plan, may also buy a Medicare Part D prescription drug plan. If you have a Medicare Advantage plan, MA you may wish to have prescription drug plan or a MAPD plan through your Advantage plan.
Delaying your Medicare decisions could significantly and permanently increase your cost of coverage. Thus, make these decisions early and carefully. Find out what your option are before turning 65.
Medicare Part A covers most in hospital charges and is available at zero cost for most people once they turn 65 years old, regardless of income. Some disabled people, people with ALS, and End-Stage Renal Disease may qualify before age 65.
Medicare Part B covers most costs associated with outpatient services, doctor visits, lab work, etc. Most people must apply to get this insurance. There is a cost of $206/month in 2026. (Higher monthly charges may apply for high-income individuals.) Suppose you do not apply for Part B during your Initial Enrollment Period, IEP, and have not had other credible coverage. In that case, you may be subject to a Part B late enrollment penalty that increase the monthly cost for your lifetime.
If you miss your IEP, unless you are eligible for a Special Enrollment Period, you must wait for the next Annual Enrollment Period, AEP (Oct. 15th- Dec. 7th). The coverage will start Jan. 1st. It’s important not to wait to enroll and thus avoid a gap in coverage and the late enrollment penalty.
You can apply for Part B on the Medicare.gov website: Part B Application or at your Social Security office.
Medicare Parts C (or MA plan)
Medicare Part C is often known as Medicare Advantage Plan or MA plan. MA are private health insurance companies that administer Medicare A & B benefits. These plans typically offer some services not offered by Medicare parts A and B alone in order to entice participants. You must be enrolled in Original Medicare Parts A & B to be eligible for such plans. MA plans cover many of the deductibles and co-pays required by original Medicare Part A and B. Additional benefits such as vision, dental, and hearing are some of the supplemental benefits available in MA plans.
There are several types of Medicare Advantage plans, and the most popular ones are HMO and PPO plans. Medicare Advantage HMO plans often have a low or zero premium cost and protect your expenses with an annual out-of-pocket limit. Generally, you will get care from local in-network providers and facilities, except for emergency care, available in or out of network. You will select a primary care provider (PCP) who coordinates your care, including referrals to specialists. Often you must see your PCP before they would refer you to a specialist.
Some Medicare Advantage PPO and POS plans may have a more extensive selection of doctors, allow for out of network doctors, and allow self-referrals. Medicare Advantage Plans vary by company and region.
Most Medicare Advantage Plans have limited coverage outside of their coverage area. They may be less suitable for people who frequently travel or live in multiple states. You can sign up for Part C plans (MA plans) during your Initial Enrollment Period or the Annual Open Enrollment Period, AOEP, (October 15 to December 7). You can also switch between Medicare Advantage plans during the Open Enrollment Period, OEP, (January 1 to March 31).
If you sign up for a MA (Part C) plan and later decide it is not for you, you may need to go through a health underwriting to qualify for a supplemental or medigap plan. We don’t recommend MA plans if you have serious medical conditions due to reduced treatment options.
Medicare Part D, Prescription Drug Plans
Most Medicare Advantage Plans have an option to include prescription drugs (Medicare Part D) as part of the plan. These plans are known as MAPD plans. (You typically cannot purchase a Medicare Advantage plan and separate Part D plan.) The MA only programs (without drug coverage) may be well suited when paired with plans with other drug coverage, such as VA coverage.
Medicare Part D Plans (PDP) help cover prescription drug costs. If you have a MA plan and you desire drug coverage, you must select an MAPD plan. Standalone Part D plan are only available if you have original Medicare. You are eligible for a standalone Part D plan with either Part A or B or both Part A & B. You cannot have both a Part D and an MAPD plan.
If you do not apply for Part D or an MAPD during your Initial Enrollment Period, you must wait for the next Annual Enrollment Period (October 15 to December 7) to get Part D prescription coverage unless you qualify for a Special Election Period. Every month you wait will add 1 percent to your monthly premium for each month you do not have Part D coverage, so don’t wait. If you have “creditable” drug insurance through yours or your spouse’s current work, the penalty will not apply providing you sign up within 63 days after your other coverage ends.
Medicare Supplement Insurance also known as Medigap
Medicare Supplement Insurance is also known as Medigap. You can not have Medigap and a Medicare Advantage plan. You cannot have both. While Medicare Parts A and B (also called “Original Medicare”) cover most healthcare costs, they do not pay for everything. Medigap from private insurers complements your Medicare coverage and helps pay for some of your out-of-pocket expenses not paid by Medicare. Standardized Medicare supplement insurance plan benefits are established by the federal government and regulated by the state. That means the basic benefit structure for each medigap plan is the same, no matter which insurance company sells it to you, but prices vary. Do not confuse the Medigap “Plan” letters (i.e. A, N, G, F) with the Medicare “Part” letters. Often a person with a Medigap plan will also buy a Medicare Part D plan to gain prescription drug coverage.
During the seven-month initial enrollment period, which begins three months before you turn 65, and ends three months after turning 65, you may purchase Supplement or Medigap plans without underwriting. If you delay enrollment due to having other credible coverage, you still have the guaranteed issue right within 63 days of when you lose or end your credible coverage. If you previously had a Medicare Advantage Plan and you move out of the plans service area, or lose coverage at no fault of your own, you can buy a Medigap policy.
You can buy a Medigap policy outside of these protected periods, but you may be denied based on health underwriting, or there may be waiting periods for pre-existing conditions. In California, you can change Medicare Supplemental policies with a guaranteed issue during the period 60 days after your birthday each year. However, you can only move to a like or lesser plan.
Advantages of Medicare Supplement and Medigap
Some advantages of a Medicare Supplement Insurance as compared to Medicare Advantage Plans include:
- Keep your own doctor without network restrictions, as long as they accept Medicare patients, almost all do.
- Coverage goes with you when you travel in the U.S., ideal for multi-coastal people.
- You may visit any specialist who accepts Medicare patients without a referral.
- Ideal for people who receive medical treatment in multiple states or areas.
- Good for people with health conditions requiring frequent doctor visits due to lack of co-pays with Plan G and expanded treatment options not requiring insurance company approval.
Medicare Enrollment Timing
Initial Enrollment Period (IEP) (age 65) is a 7-month period that begins 3 months before the month you turn 65, includes the month you turn 65 and ends 3 months after you turn 65 (waiting until later can increase your cost of Part B and Part D)
Annual Open Enrollment Period (AOEP) (Oct. 15 to Dec. 7) also known as the Fall Open Enrollment. During this time, anyone with Medicare Parts A & B can add a Medicare Advantage, MA, plan or can switch between Medicare Advantage plans or if already in a MA plan can switch back to Original Medicare Parts A & B (provided you medically qualify). This is also the time you can enroll in Medicare Part D provided you are not in a Medicare Advantage Plan. Multiple changes can occur but the last coverage you select during this period becomes enforce on Jan 1st.
Medicare Advantage-Open Enrollment Period (MA-OEP) (Jan. 1 to Mar. 31st) you can only use this enrollment period if you are already enrolled in a Medicare Advantage Plan. You can opt out of a Medicare Advantage plan switch to a different Medicare Advantage plan or return to the original Medicare program Part A & B. During this period, you can also join a stand-alone Part D drug plan if you are dis-enrolling from a Medicare Advantage plan. Unlike AOEP, only one change can occur during this period. Your new coverage will begin the very next month.
Special Medicare Enrollment Periods
Special Enrollment Period (SEP) allows you to join, switch or drop Medicare Advantage plan or a Medicare prescription drug plan, Part D, if one of many special circumstances apply to you. Common SEP include:
- You move outside the coverage area
- Your plan changes coverage area or stops coverage
- You lose coverage from yours or your spouse’s employment health plan
- You become eligible for a Special Needs Plan (SNP)
- You wish to enroll in a five-star plan
- You have consistently been in a low-performing Medicare Advantage or Part D Plan
- You become eligible for Medicaid (Medicaid is for lower income people)
- You live an a recent natural desaster area
- And many others
This is only a summary of few of your Medicare options. Other options include PACE programs and Medicaid, Medicare Spending Programs. There is no substitute for talking to a trained Medicare expert for selecting your Medicare options.
Curtis Hill, CFP and Irina Hill, CPA provide financial advice, investment advice, retirement planning, and life insurance in the Long Beach, CA; Lakewood, CA; Carson, CA, and Los Angeles, CA areas. Curtis has been advising clients regarding their Medicare options for many years.
Go to the Calendly.com calendar link below to schedule an appointment with an expert, Curtis Hill or Irina Hill. Discover how a discussion with the right person can make a difference in your coverage and in your insurance and medical costs. Learn how “Not the same old advice” can benefit you.