Understand Medicare
What is Medicare?
How It Works and Your Coverage Options
Medicare is the federal health program that covers Americans 65 and up, plus younger people who qualify through disability. The coverage itself is solid. The confusing part is how the pieces fit together, so let's take them one at a time.
Below we walk through the basics of Original Medicare first, then show where Medicare Advantage and Medicare Supplement (Medigap) plans fit into the picture.
What is Original Medicare?
Original Medicare has two halves:
- Part A (Hospital Insurance): pays for inpatient hospital stays, short-term skilled nursing care, hospice, and some home health services.
- Part B (Medical Insurance): pays for doctor visits, outpatient care, preventive services, and medical equipment your doctor orders.
Keep in mind: Original Medicare pays most of the bill, not all of it. Deductibles, coinsurance and copays fall to you, and there is no yearly cap on what you can owe.
What does Original Medicare cover?
| Medicare Part | What It Covers | Your Costs |
|---|---|---|
| Part A | Hospital stays, skilled nursing facility care, hospice, limited home health care | Deductibles, daily coinsurance for extended stays |
| Part B | Doctor visits, outpatient care, preventive services, lab work, durable medical equipment | Monthly premium, deductible, 20% coinsurance |
Two things worth knowing up front: ten years of paying Medicare taxes earns you premium-free Part A, while Part B always carries a monthly premium, and that premium climbs with income.
What are the standard costs for Medicare?
| Medicare Part | Coverage | 2026 Standard Costs |
|---|---|---|
| Part A | Inpatient hospital care, skilled nursing facility care, hospice care | $1,736 deductible per benefit period; Days 1-60: $0 coinsurance; Days 61-90: $434/day; Lifetime reserve days: $868/day |
| Part B | Doctor visits, outpatient services, preventive care | $202.90 standard monthly premium; $283 annual deductible; 20% coinsurance after deductible |
| Part C | Medicare Advantage (private insurance plans) | Premiums vary by plan and location; copays and network restrictions may apply |
| Part D | Prescription drug coverage | Premiums vary by plan; higher-income individuals may pay more (IRMAA surcharge) |
The federal government resets these numbers every year, and your personal costs can differ by income and location.
What's not covered by Original Medicare?
- Prescription drugs (a separate Part D plan handles those)
- Routine dental, vision, and hearing care
- Long-term custodial care
- Care outside the United States, apart from limited emergencies
These gaps are the reason most people put additional coverage on top.
Make the Right Medicare Choice With Confidence
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Book Your AppointmentYour options after enrolling in Original Medicare
With Parts A and B in place, there are two main routes to fuller protection:
Add a Medicare Supplement (Medigap) plan
- Picks up the deductibles, coinsurance and copays that would otherwise land on you.
- Keeps your freedom to see any doctor in the country who accepts Medicare.
- Needs a standalone Part D plan alongside it for prescriptions.
- Its premium is paid on top of your Part B premium.
Medigap works like a shield against large medical bills while preserving everything people like about Original Medicare.
Switch to a Medicare Advantage (Part C) plan
- A private, bundled alternative to Original Medicare.
- Required to cover everything A and B cover, and usually adds dental, vision, hearing, fitness and drug benefits on top.
- Run by private insurers through their own HMO or PPO provider networks.
- Comes with an annual out-of-pocket maximum, which Original Medicare never has.
Think of it as your hospital, medical and drug coverage rolled onto one card, with extra perks attached, in exchange for using the plan's network.
How they connect: the Medicare ecosystem
| Feature | Original Medicare | Medigap | Medicare Advantage |
|---|---|---|---|
| Core Coverage | Provided by federal government (Parts A & B) | Supplements Original Medicare | Replaces Original Medicare with private coverage |
| Provider Flexibility | See any provider accepting Medicare | See any provider accepting Medicare | Use plan network providers (varies by plan) |
| Prescription Drugs | Separate Part D plan needed | Separate Part D plan needed | Often included |
| Out-of-Pocket Limits | No annual cap | No cap (but reduces out-of-pocket costs) | Annual out-of-pocket maximum required |
| Extra Benefits | Limited | None beyond medical coverage | Often includes dental, vision, fitness, travel |
Final thoughts
Once you see how the pieces connect, the decision gets much easier. Some people value the go-anywhere flexibility of Original Medicare plus a Medigap plan. Others prefer the simplicity of one bundled Advantage plan. There is no single right answer, only the right fit for your health, your habits and your budget.
Legacy Life Group puts every option side by side with you, so the coverage you pick is the coverage that actually fits.
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