Medicare 101 – Program Recap

Published July 22, 2026

Medicare is the leading health benefits program for those over 65, yet it can be complex and confusing about what is and not covered under Original Medicare versus Medicare Advantage plans.

Thank you to Jeff Previte from Senior Health Navigators, LLC for an in-depth look at Medicare, navigating the process, and Medicare Advantage plans. Medicare can be complex given its different Parts and determining what parts of Medicare to enroll in and how Medicare works with your health insurance coverage can be confusing. However, failing to enroll in certain parts of Medicare or failing to have adequate health and drug coverage after age 65 can lead to permanent financial penalties. So let’s take a look at Medicare and all of its supplementary options.

What Is Medicare?

Medicare is a federally-funded health benefit program for:

• People age 65 years or older
• Certain people with disabilities under age 65 including:
  • End-stage renal disease
  • Permanent kidney failure who need dialysis or a transplant

Medicare provides medical coverage for hospital care, doctors and specialists, durable medical equipment, some preventative services, clinical laboratory services, and prescription drugs. Medicare does not cover most dental care, dentures, cosmetic surgery, Long Term Care, hearing aids and exams for fitting them, and eye examinations related to prescribing glasses, among others. Medicare is broken up in Parts A, B, C and D, which will be covered in the next section.

To enroll in Medicare and Medicare Advantage plans, there are certain enrollment periods. In the 3 months prior to and after your 65th birthday is the Initial Enrollment period. During this time, you can enroll in Parts A and B; coverage for Part A starts the month you turn 65 and Part B starts the month after you enroll. If fail to enroll in the Initial Enrollment Period, you may have to pay a penalty for both Parts A and B; more information is available at https://www.medicare.gov/basics/costs/medicare-costs/avoid-penalties. If you are receiving Social Security benefits before age 65, you will automatically be enrolled in Medicare Part A when you turn 65.

If you fail to enroll during your Initial Enrollment Period or waived enrolling in Part B (due to existing health insurance coverage through an employer or spouse’s employer), you will have to wait until the Annual Enrollment Period from October 15 to December 7. During this time, you can enroll or disenroll from Original Medicare (Parts A and B), enroll in a Medicare Advantage plan and/or enroll in a Medicare Part D Prescription Drug plan; enrollments during this time will be effective January 1st of the following year. If you wish to change or disenroll from a Medicare Advantage plan, you must wait until Medicare Advantage Open Enrollment, from January 1 to March 31. During this time, you can leave your current Medicare Advantage plan for a different Medicare Advantage plan or for Original Medicare. If you switch to Original Medicare during this period, you will have until March 31 to also join a Medicare Prescription Drug Plan.

There is also a 4th enrollment period called the Special Enrollment Period that starts based on certain life events, such as:

• Move out of a plan’s service area
• Your or your spouse’s employer-sponsored health coverage is terminated
• You have Medicaid
• You qualify for Extra Help

During the Special Enrollment Period, you can join, switch, or drop a Medicare plan.

The Four Parts of Medicare

Part A – Hospital Care

Medicare Part A, also known as Hospital Care, provides coverage for the following things:

• Inpatient care in hospitals or a skilled nursing facility (not custodial or long-term care)
• Hospice care
• Home health care
• Inpatient care in a religious, nonmedical health care institution

Part A coverage is at no cost (no monthly premium) to Medicare-eligible individuals, yet you may have to pay a deductible or copay. For example, for 2026, the deductible for in-patient hospital care is $1,736; this benefit period begins when you are admitted to a hospital or skilled nursing facility and ends after you have been out of both for 60 consecutive days. If you hospital or skilled nursing facility stay is between 61 and 90, you must pay a co-pay of $434; if your stay is from 91 to 150 days, that co-pay increases to $868.

Part B – Medical Care

Medicare Part B covers the following:

• Services from doctors and other health care providers (PCP, specialists)
• Outpatient and home health care
• Durable medical equipment
• Some preventative services
• Clinical laboratory services
• Blood

Medicare Part B is voluntary so you can decline to enroll in it if you have appropriate coverage through a different health insurance plan; if you do not have appropriate coverage through a different health insurance plan, you will have to pay a penalty when you finally choose to enroll. Medicare Part B does require you pay a monthly premium based on your household income from 2 years back. If your household income from 2024 was $109,000 or less for a single household ($218,000 or less if married filing jointly), your monthly premium for 2026 is $202.90. If your household income is higher, you will pay a higher premium; you can find out more about those rates at https://www.medicare.gov/basics/costs/medicare-costs.

Part C – Medicare Advantage

Medicare Part C, commonly called Medicare Advantage, helps fill in the gaps of Original Medicare (Parts A and B) by bundling Parts A, B, and other benefits into a private health insurance plan that is approved by Medicare. Medicare Advantage plans must include Parts A and B, and may also include:

• Dental and denture care
• Hearing aids
• Vision care and eyeglasses
• Gym memberships

While many plans also include a Medicare Part D Prescription Drug Plan, it is not required. These plans come in 3 varieties:

• Medicare HMO (Health Maintenance Organization) – You will have to use the doctors and hospitals within the plan’s network and may need a referral to see a specialist
• Medicare HMO-POS (Health Maintenance Organization-Point of Service) – You will have to use the doctors and hospitals within the plan’s network, but may go out of network for certain covered services, but often for a higher copay or coinsurance. You many also need a referral to see a specialist.
• Medicare PPO (Preferred Provider Organization) – You can use doctors and hospitals out of the network, but often at a higher cost. In most cases, you do not need a referral to see a specialist.

Medicare Advantage plans vary from county to county and doctors can choose what plan(s) they wish to participate in. Your monthly premium may be higher than Original Medicare Part B’s, but that will include all of your benefits and the Medicare-approved private insurance company is responsible for working directly with Medicare and all providers.

Part D – Prescription Drug Plan

In 2006, the federal government mandated that all individuals receiving Medicare benefits must also enroll in a Medicare Prescription Drug Plan, run by Medicare-approved private insurance companies. These plans help cover the cost of prescription drugs and help protect against higher costs in the future my capping your expenditures on prescription drugs. You can add a free-standing plan to Original Medicare or enroll in a Medicare Advantage Plan that includes a prescription drug plan.

Most Part D plans have an annual deductible that you must meet before the plan will start paying. For 2026, the maximum annual Part D deductible is $615. Once the deductible is met, you will enter into the Initial Coverage Phase where you will pay a reduced co-payment (usually about 25%) and the plan will pay the remaining balance. This stage continues until you reach the catastrophic threshold of your total out-of-pocket spending at $2,100 for 2026. After you reach that amount, you will enter the Catastrophic Coverage Phase where you will not have to pay a co-payment or coinsurance for covered Part D drugs for the remainder of the calendar year.

Each plan determines how much you will pay based off of that plan’s formulary – a list of drugs covered by the plan. Drugs are classified into 5 tiers and each tier will determine how much you pay:

• Tier 1 – Preferred Generic
• Tier 2 – Non-Preferred Generic
• Tier 3 – Preferred Brand
• Tier 4 – Non-Preferred Brand
• Tier 5 – Specialty Drugs

Some plans may require you to try drugs from a lower tier for a period of time before they will cover drugs at a higher tier, also called Step Therapy. Your Prescription Drug Plan will also determine what pharmacies you can use to fill your prescriptions, whether prior authorization is required, and any quantity limits on the drugs you need.

Medigap Policies

For those looking to keep Original Medicare (Parts A and B) and not enroll in a Medicare Advantage Plan, there are Medigap policies that can help cover the “gaps” of Original Medicare, particularly when it comes to deductibles and co-insurance. To qualify for Medigap, you must already be enrolled in Parts A and B. If you choose to enroll during Open Enrollment, you do not need to be underwritten, but if you apply outside of that period, you may have to be underwritten.

Currently there are 9 plans available (A, B, C, D, G, K, L, M, and N) for new enrollees; the only difference is price and service. Any doctor, specialist or hospital in any state that accepts Medicare must also accept Medigap. There are also no referrals required and there is virtually no paperwork. For a listing of available plans in your area, please visit https://www.medicare.gov/medigap-supplemental-insurance-plans/#/m?lang=en&year=2026 and enter your Zip Code.

More Information

If you are looking for more information about Medicare, please visit https://www.medicare.gov/; you can speak with a Medicare representative about your specific situation. You can also contact Senior Health Navigators, LLC at 800-864-8414 or mvargasagency@gmail.com who will provide you with free guidance in determining what options are best for you, including helping you find Medicare Advantage plans within your county.

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