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Demystify the Medicare Alphabet Soup.
Medicare is divided into four main parts—A, B, C, and D. Understanding how they work together is the foundation of a strong healthcare strategy. Akroamatik Financial cuts through the confusion, helping you decode your options and seamlessly integrate the right coverage into your overall financial architecture.
Part A (Hospital Insurance)
What it covers:
Inpatient hospital stays
Inpatient care in a skilled nursing facility (not custodial or long-term care)
Hospice care
Limited home health care services
What you'll pay:
For most people, the premium is $0 (if you or your spouse worked and paid Medicare taxes for at least 10 years).
If you are admitted to the hospital, you must pay a Part A deductible per benefit period before Medicare starts paying.
Daily coinsurance kicks in for long hospital stays lasting more than 60 days.
Why it matters:
Part A is your primary safety net against catastrophic hospital bills, helping cover major medical events (like surgeries or extended hospital stays) that could otherwise cost thousands of dollars out of pocket.
Part B (Medical Insurance)
What it covers:
Services from doctors and other health care providers.
Outpatient care (like lab tests, diagnostic screenings, and outpatient surgeries).
Preventive services (like flu shots, cancer screenings, and wellness visits).
Durable medical equipment (like wheelchairs, walkers, hospital beds, and other equipment).
What you'll pay:
For most people, the premium is $0 (if you or your spouse worked 10+ years paying Medicare taxes). There is a deductible per benefit period, and daily coinsurance kicks in for hospital stays lasting longer than 60 days.
Why it matters:
Part B is the day-to-day foundation of your healthcare strategy. Without it, you would be 100% responsible for the expensive, out-of-pocket costs of routine doctor visits, specialist consultations, and outpatient procedures.
Part C (Medicare Advantage)
What it covers:
Everything covered by Original Medicare (Parts A and B).
Most plans include built-in Part D prescription drug coverage.
Extra supplemental benefits that Original Medicare leaves behind (such as routine dental, vision, hearing care, and fitness memberships).
What you'll pay:
You must continue paying your standard Part B monthly premium.
The Medicare Advantage plan itself may have a $0 or very low additional monthly premium.
You will pay plan-specific copays or coinsurance as you use services throughout the year.
Why it matters:
It offers a convenient "all-in-one" approach to your healthcare. Most importantly, every Part C plan includes a strict maximum out-of-pocket limit, shielding your retirement savings from catastrophic, unpredictable medical bills.
Part D (Prescription Drug Coverage)
What it covers:
Retail prescription medications (both brand-name and generic).
Specific drugs are determined by each individual plan’s list of covered medications (known as a formulary).
Many preventive vaccines, including the shingles and RSV vaccines.
What you'll pay:
A separate monthly premium paid to the private insurance company providing the plan.
An annual deductible (though many plans offer a $0 deductible).
Copays or coinsurance when you pick up your medications at the pharmacy, which vary based on the "tier" of the drug.
Why it matters:
Original Medicare (Parts A and B) does not cover your routine prescription medications. Adding Part D ensures you aren't paying full retail price for your daily prescriptions, and enrolling on time prevents you from facing lifelong financial penalties.
Medicare Supplemental Insurance (Medigap)
What it covers:
Fills the "gaps" in Original Medicare by covering out-of-pocket costs like copayments, coinsurance, and deductibles.
Certain plans cover medical care when you travel outside the United States.
Allows you to see any doctor or specialist in the country that accepts Original Medicare, with no network restrictions.
What you'll pay:
A monthly premium paid directly to a private insurance company (in addition to your Part B premium).
Because Medigap covers the costs left behind by Original Medicare, your actual out-of-pocket costs at the doctor or hospital are drastically reduced or completely eliminated.
Why it matters:
Medigap shields you from surprise medical bills by covering the expensive out-of-pocket gaps left behind by Original Medicare. It also provides ultimate flexibility, allowing you to see any doctor or specialist in the United States who accepts Medicare without worrying about network restrictions or referrals.
Comparison of Your Options
Plan
Original Medicare
(Parts A & B)
Medicare Advantage
(Part C)
Prescription Drug Coverage
(Part D)
Medigap
(Medicare Supplement)
Premium
Most people do not pay a monthly premium for Part A. However, Part B requires a standard monthly premium, which can increase based on your income level.
All Medicare Advantage plans require that you continue to pay your Part B insurance premium.
You may also have a separate monthly insurance premium for your Medicare Advantage plan.
Most Part D plans require a monthly premium. These premiums may change each year.
You will be notified of these changes in the fall prior to the annual Open Enrollment Period.
All Medigap plans require that you continue to pay your Part B premium and a separate premium for Medigap coverage.
Deductible
Both Part A and Part B have deductibles that must be paid before Medicare begins to cover its share of your expenses.
Some plans have deductibles.
Some plans have deductibles.
Some plans have deductibles.
Copays
Flat copayments are rare; instead, your out-of-pocket medical costs usually come in the form of deductibles and percentage-based coinsurance.
There may be copayments that apply to specific services.
Many Part D plans require a fixed copayment each time you fill a prescription.
There may be copayments that apply to specific services.
Coinsurance
Part B typically requires a 20% coinsurance for doctor visits and outpatient services. Part A requires daily coinsurance for extended hospital or facility stays.
May apply to specific services.
Some plans require that you pay coinsurance for a medication every time you fill a prescription.
Coinsurance varies depending on the plan.
Coverage Gap
There is no annual limit or cap on your out-of-pocket expenses. You are responsible for your share of costs no matter how high they get in a year.
All plans have an annual limit on your out-of-pocket expenses.
Most Medicare Part D plans incorporate a cost-sharing feature commonly referred to as a coverage gap or "donut hole."
The coverage gap represents a temporary threshold wherein you are accountable for covering all of your drug expenses until you reach the plan's annual out-of-pocket limit. Once you reach this limit, you will only be responsible for paying a small portion of your prescription costs for the remainder of the year.
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Comparison of Your Options
| Plan | Original Medicare (Parts A & B) | Medicare Advantage (Part C) | Prescription Drug Coverage (Part D) | Medigap (Medicare Supplement) |
|---|---|---|---|---|
| Premium | Most people do not pay a monthly premium for Part A. However, Part B requires a standard monthly premium, which can increase based on your income level. | All Medicare Advantage plans require that you continue to pay your Part B insurance premium. You may also have a separate monthly insurance premium for your Medicare Advantage plan. | Most Part D plans require a monthly premium. These premiums may change each year. You will be notified of these changes in the fall prior to the annual Open Enrollment Period. | All Medigap plans require that you continue to pay your Part B premium and a separate premium for Medigap coverage. |
| Deductible | Both Part A and Part B have deductibles that must be paid before Medicare begins to cover its share of your expenses. | Some plans have deductibles. | Some plans have deductibles. | Some plans have deductibles. |
| Copays | Flat copayments are rare; instead, your out-of-pocket medical costs usually come in the form of deductibles and percentage-based coinsurance. | There may be copayments that apply to specific services. | Many Part D plans require a fixed copayment each time you fill a prescription. | There may be copayments that apply to specific services. |
| Coinsurance | Part B typically requires a 20% coinsurance for doctor visits and outpatient services. Part A requires daily coinsurance for extended hospital or facility stays. | May apply to specific services. | Some plans require that you pay coinsurance for a medication every time you fill a prescription. | Coinsurance varies by plan. |
| Coverage Gap | There is no annual limit or cap on your out-of-pocket expenses. You are responsible for your share of costs no matter how high they get in a year. | All plans have an annual limit on your out-of-pocket expenses. | Most Medicare Part D plans incorporate a cost-sharing feature commonly referred to as a coverage gap or "donut hole." The coverage gap represents a temporary threshold wherein you are accountable for covering all of your drug expenses until you reach the plan's annual out-of-pocket limit. Once you reach this limit, you will only be responsible for paying a small portion of your prescription costs for the remainder of the year. | N/A |
Important Questions
What is the difference between Part C and a Medicare Supplement (Medigap)?
This is the biggest decision you will make! Part C (Medicare Advantage) is an all-in-one plan that replaces Original Medicare and often includes a network of doctors and extra benefits. A Medicare Supplement (Medigap) works alongside Original Medicare, filling in the gaps (like the 20% coinsurance) while allowing you to see any doctor nationwide who accepts Medicare.
Do I really need Part D if I don't take any prescription medications?
Yes, it is highly recommended. If you go without creditable prescription drug coverage for 63 days or more after your Initial Enrollment Period, Medicare will hit you with a late enrollment penalty. You will have to pay this penalty every month for the rest of your life once you finally do enroll. We can help you find a very low-cost Part D plan just to have that safety net in place and avoid the penalty.
Does Part A or Part B cover my routine dental and vision care?
Generally, no. Original Medicare does not cover routine dental exams, cleanings, dentures, or eye exams for glasses. Some Medicare Advantage (Part C) plans include these benefits, but if you choose a Supplement route, we can easily pair it with a standalone Dental, Vision, and Hearing policy to ensure your complete health is covered.
Ready to put the pieces of your Medicare puzzle together?
You do not have to navigate the different parts of Medicare alone. I am here to review your doctors, check your prescriptions, and help you assemble the exact combination of coverage that protects your health and your savings.
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Akroamatik Financial is not connected with or endorsed by the U.S. government or the federal Medicare program. We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov, 1-800-MEDICARE (TTY users should call 1-877-486-2048), or your local State Health Insurance Program (SHIP) to get information on all of your options.