Between Part A and B, Medigap, and Medicare Advantage, there’s a lot to know about Medicare. This Medicare basics guide will cut through the clutter and confusion with the 14 most important Medicare basics that you should know before you sign up, add coverage, or change plans.  

Medicare Basics

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Medicare Basics 101: Top 4 Most Important Things to Know About Medicare

Don’t have the time to read the whole thing? Here are the 5 most important takeaways from this guide so you can get on with your day:

  1. Original Medicare (Parts A & B) is not enough to cover all of your healthcare. Premiums, deductibles, and copays can add up over the course of the year. In addition, extended hospital stays and long-term care are not covered.
  2. Original Medicare does not cover hearing, dental, or vision. Aside from some routine annual checkups, even basic services like eye exams and fillings are not covered.
  3. A majority of Medicare enrollees use either Medigap or Medicare Advantage to make their coverage stronger. Medigap is a standalone supplemental plan, while Medicare Advantage is a private version of Medicare. Knowing the difference is key to getting into the right plan.
  4. Prescription drugs are not covered by Medicare; a Part D drug plan is essential add-on coverage that can save you hundreds, if not thousands of dollars a year. Most Medicare Advantage plans include Part D; Medigap plans do not.

WATCH: Medicare Basics 101 [YouTube]

Medicare Basics: 14 Things You Need to Know Before Signing Up or Changing Plans

To help you navigate the world of Medicare, here are the 14 Medicare basics in plain and simple terms.

1.) Original Medicare (Parts A & B) Has Huge Gaps in Coverage that Could Cost You

Between the Part A deductible ($1,600), the Part B monthly premium ($164.90), and the Part B deductible ($226), there’s more out-of-pocket liability with Medicare than most people think.

And that’s on top of that fact that … (See #2)

2.) Parts A and B Do Not Include Dental, Hearing, or Vision Care

While most people consider things like hearing and dental to be pretty critical, Medicare actually doesn’t cover it. That includes both routine care, like fillings and crowns, as well as hearing aids and prescription eyeglasses. This is perhaps the largest coverage gap in Original Medicare.

3.) Most Medicare Enrollees Strengthen Their Coverage with Medigap or Medicare Advantage

There are two ways to make your Medicare stronger: Medigap or Medicare Advantage.

Medigap, or Medicare Supplement Plans, are standalone insurance policies designed to augment your Part A and Part B. Medigap plans pay for copayments, coinsurance, and deductibles, in exchange for a low monthly premium.

Medicare Advantage, or Part C, is privately-sponsored Medicare. These plans are a replacement for your Original Medicare, and can provide additional coverage for vision, dental, and hearing. Most Medicare Advantage plans also include Part D prescription drug coverage, making them a convenient way to bundle your healthcare into one single plan.

4.) Parts A and B Do Not Cover Prescription Drugs; Part D Plans are Essential

Prescription drug coverage is not offered by Part A or Part B. That means if you take a common drug like Lipitor for high cholesterol, you’re on the hook for an out-of-pocket price as high as $65 / month, or   upwards of $120 for hydrocodone, Lorcet, or Vicodin.

Compare this to the standard cost of a Part D prescription drug plan of about $32 / month. It’s easy to see why Part D is something that many people sign up for right away when they first enroll in Medicare. (Note: Your Part D premium could include a surcharge based on your income level).

Adding Part D coverage later on is easy, but you have to wait for the Annual Enrollment Period at the end of the year.

5.) There are 4 Types, or “Parts”, of Medicare

Medicare comes in four different “Parts”, Part A, Part B, Part C, and Part D.

  • Part A provides coverage for inpatient or hospital treatment. Part A has a $0 monthly premium for most people, but does include a deductible.
  • Part B provides coverage for outpatient or doctor’s office treatment. Part B has a monthly premium of $164.90, which needs to be paid even if you switch to Medicare Advantage.
  • Part C is known commonly as Medicare Advantage. This is a private insurance plan that is required to cover everything that Part A and Part B covers. Medicare Advantage usually includes additional coverage for dental, vision, long-term care, and more.
  • Part D is stand alone prescription drug coverage. Part D both covers the costs of prescription drugs and protects you against excessive out-of-pocket costs. Part D coverage is included with many Medicare Advantage plans.

6.) Some Medicare Advantage Plans have a $0 Monthly Premium

Medicare Advantage premiums are very affordable, averaging about $55 per month.

But the premiums vary a good bit depending on the coverage, and many Medicare Advantage plans have a $0 monthly premium – though often with higher potential out-of-pocket costs.


7.) You Can Only Enroll at Certain Times

One of the most confusing things about Medicare is navigating the different enrollment periods. Here are the different times that you can sign up for Medicare:

  1. Initial Enrollment Period (IEP). This is the first time that you can sign up for Medicare. It begins three months before your 65th birthday, and lasts for a total of 7 months. During your IEP, you can sign up for Original Medicare, Part D prescription drug plans, and Medicare Advantage plans. (If you’re already receiving Social Security, you will be enrolled in Part A and Part B automatically).
  2. Annual Enrollment Period (AEP). AEP happens every year from October 15th to December 7th. This is an opportunity for current Medicare enrollees to make changes to their coverage. This includes switching to Medicare Advantage, adding Part D, or switching back to Original Medicare.
  3. General Enrollment Period (GEP). GEP takes place from January 1st to March 31st of each year. The GEP is only for people who need to sign up for Medicare but chose not to when they were first eligible. All coverage signed up for during GEP will go into effect on July 1st of that year.

8.) Most People Don’t Have to Pay the Part A Premium

Medicare Part A is “free” ($0 monthly premium) for all individuals who paid payroll taxes for at least 10 years of their life. This time is actually measured in quarters, also known as “credits”. If you did not earn enough credits to qualify, you will have to pay a premium that is based on your income.

9.) Everybody Pays the Part B Premium No Matter What

All Medicare enrollees must pay the Part B premium, even if they switched to Medicare Advantage. The 2024 Medicare Part B premium is $164.90 to start, but could be higher depending on your income.

10.) Medicare Basics Do Cover Flu Shots, Cancer Screenings, and other Free Preventive Care

Here are a few things that Medicare does cover that a lot of people don’t know about:

  • Flu shots
  • Mammograms
  • Mental health and depression screening
  • Various cancer screenings
  • A one-time “Welcome to Medicare” preventive care visit
  • Prostate cancer screenings
  • Tobacco use cessation counseling
  • Nutrition therapy services
  • Obesity counseling
  • Diabetes screenings and self-management training
  • Glaucoma tests
  • Hepatitis B shots

11.) Most People Are Enrolled in Parts A & B Automatically (And Some People Aren’t)

As long as you’re already receiving Social Security benefits, you will automatically be enrolled in Medicare Parts A and B when you become eligible. But if you’re still employed and enrolled in an employer-sponsored plan, you will have to sign up for Medicare yourself when you are ready.

12.) Delaying Enrollment in Medicare Could Cost You

If you delay enrolling in Part B, you’ll have to pay a penalty that’s worth up to 20% of the standard premium. This penalty is permanent and will last for as long as you’re enrolled in Part B. That’s why it’s always best to be prepared for Medicare well before your Initial Enrollment Period even begins.

13.) There’s No Coverage for Long-Term Care

The average couple retiring in 2023 is on track to pay as much as $105,000 per year for care in a nursing home. That’s about $300 per day. Considering the fact that about 50% of adults will need some form of long-term care in their lifetime, it’s essential to have a contingency plan.

Original Medicare does not cover long-term care, but many Medicare Advantage plans do.

14.) Your Personal Benefits Manager is Always Around to Help

When you choose MediGap Advisors as your Medicare professionals, you’re paired with an expert, real-life Personal Benefits Manager that can help you make the best decisions about your coverage. From getting the best monthly rates to maximizing your retirement assets, your PBM will become a strategic asset in your retirement planning, for as long as you have your plan.

Even better, our services are 100% free-to-you, and there’s never any pressure or obligations. Just a friendly, no-nonsense conversation about how best to cut your costs, boost your savings, and maintain your health, at every stage of life.

Click here to get started with a free personal consultation. Or call 800-913-3416.

Medicare Basics FAQ: Frequently Asked Questions


Q: Is it Mandatory to Go on Medicare When You Turn 65?

A: While you’re not forced to enroll when you turn 65, you could end up paying a penalty if you choose to delay. The exception is if you’re still working and have a group insurance plan through your employer.

Q: What are the Rules for Receiving Medicare?

A: All U.S. citizens or legal residents of 5 years or more can be eligible for Medicare when they turn 65. It’s also required that you work and pay taxes for at least 40 quarters, or about 10 years, in order to receive the $0 premium Part A.

You can be eligible for Medicare under the age of 65 if you have:

  • Received disability benefits for at least 24 months
  • Have End Stand Renal Disease (ESRD)

Q: Can I Work Full Time While Receiving Medicare?

A: Yes, you can still receive Medicare if you’re working full time, as long as you meet the Medicare requirements (see above).

Q: Do I Have to Pay for Medicare Part A?

A: A majority of enrollees receive Medicare Part A for free. A smaller percentage of people need to pay a monthly premium for Part A, specifically if they didn’t pay enough payroll tax during their working years. These are called Quarters of Coverage, or QCs, and you need 40 of them in order to receive $0 premium Part A.

Q: Does Social Security Count as Income for Medicare?

A: Yes, all types of Social Security income received by a Medicare enrollee counts towards total household income for eligibility purposes. However, Medicare is available to individuals 65 or over, regardless of total income.

Q: Can You Be Too Rich for Medicare? (Maximum Income)

A: Any U.S. citizen or 5-year legal resident can receive Medicare, regardless of their income or the amount of money they have. However, your Part P monthly premium is based on your modified adjusted gross income, or MAGI. This means that high-income individuals could pay more per-month for Medicare part B.

Q: What is the Medicare Part B Premium for 2023?

A: The Part B Premium is $164.90 in 2023. This is the standard premium; Individuals who earn more than $97,000 per year will have to pay more than this amount.

Q: What is the Medicare Deductible for 2023?

Wiley Long is founder and president of Medigap Advisors, and is passionate about helping people navigate the confusing waters of Medicare. He is the author of The Medicare Playbook: Designing Your Successful Health Coverage Strategy, a clear and simple explanation so you can make the most of your Medicare coverage.