What Is Medicare?

Need help understanding Medicare?

With many choices, including Original Medicare, Medicare Advantage, Medicare Prescription Drug Coverage and Medicare Supplement Insurance, HealthSpring is here to help you understand your coverage options. Whether you are enrolling in Medicare for the first time or reviewing your plan’s benefits, we’ll help you become confident in your choice for health insurance. 

What is Medicare?

Medicare is a federal health insurance program for U.S. citizens or permanent legal residents ages 65 and over and those with certain disabilities.

Who can get Medicare?

You’re typically eligible for Medicare if:  

• You’re 65 or older and a U.S. citizen or permanent legal resident.  

• You’re under 65 and have received Social Security Disability Insurance (SSDI) for at least 24 months.  

• You have certain conditions like End-Stage Renal Disease (ESRD) or ALS (Lou Gehrig’s disease).  

What are the parts of Medicare? 

Medicare has four parts, each covering a specific type of care: 

1. Medicare Part A (Hospital Insurance)

Medicare Part A helps cover your costs when you stay at a hospital. If you’re hospitalized, Part A helps cover your hospital room, meals and inpatient care and other services like: 

• Care you get at a skilled nursing facility  

• Hospice care  

• Other home health care services  

You typically pay a deductible and coinsurance for hospital stays. Some people may pay lower premiums for Part A or no premiums at all. 

2. Medicare Part B (Medical Insurance)

Medicare Part B helps cover your outpatient services, including:  

• Doctor’s visits  

• Physical therapy  

• Preventive care, like flu shots   

• Lab tests and X-rays 

• Durable medical equipment 

Part B is optional and includes a monthly premium and deductible. 

Medicare Parts A and B combine to make up Original Medicare. Learn more about how Original Medicare works. 

3. Medicare Part C or Medicare Advantage

Medicare Advantage plans provide all the coverage of Original Medicare (Parts A and B). You also get extra benefits, like dental, vision, hearing services and wellness programs. Many Medicare Advantage plans also include prescription drug coverage (MA-PD).  

If you are considering a Medicare Advantage plan, here are three things you need to know: 

• Medicare Advantage plans may require a referral or prior authorization from your doctor for certain health care services or prescription drugs. 

• Many plans offer low or $0 monthly premiums and set out-of-pocket costs, compared to Original Medicare plans where your costs are not set.  

• If you are dealing with health issues, many Medicare Advantage plans offer care coordination to help manage your care between your health care providers. 

Here is everything you need to know about Medicare Advantage (Part C).

4. Medicare Part D or Prescription Drug Coverage

Medicare Prescription Drug Plans (or Part D plans) help lower the costs of your prescription drugs. Part D plans cover both generic and brand-name drugs, but each plan has its own formulary (drug list) so coverage can vary by plan. It is important to check the plan’s formulary to know if your prescriptions are covered before choosing a Part D plan. 

Joining a Part D plan is optional. But, if you are eligible, you may want to consider a Part D plan to avoid the late payment penalty. You can purchase a stand-alone (separate) Part D plan or include prescription drug coverage under a Medicare Advantage plan (MA-PD). 

Here are three things to know about the cost of a Prescription Drug Plan:

• You and Medicare share the costs of your prescription drugs – your share of costs is either a copay or coinsurance for your prescriptions.  

• For 2026, Part D yearly out-of-pocket costs for covered prescription drug costs are limited to $2,100 and deductibles are limited to $615 (some private insurers, like HealthSpring, offer a lower deductible plan). 

• Medicare offers financial assistance, known as Extra Help, for people with limited incomes who may need help paying for their out-of-pocket prescription drugs. 

Get more details about Medicare Part D.

Medicare Supplement Insurance (Medigap)

Medicare pays about 80% of your health care costs. Medicare Supplement Insurance helps pay about 20%¹ of the remaining costs not covered by Original Medicare. This includes any deductibles, copayments or coinsurance. These plans are not part of the federal government’s Medicare program and are sold through private insurers, like HealthSpring. 

There are up to10 different types of Medicare Supplement Insurance plans, also known as Medigap. These plans are named with letters (Plan A, B, C, D, F, G, K, L, M and N). It is important not to mix up Medigap plans with other types of Medicare plans which are also named alphabetically.

Here are three things you need to know when thinking about a Medicare Supplement Insurance plan: 

• You can have a Medicare Supplement Insurance plan if you already have Original Medicare or a Prescription Drug Plan. 

• You cannot have a Medicare Supplement Insurance Plan and a Medicare Advantage Plan at the same time. 

• Medicare Supplement Insurance plans let you choose any doctor or hospital that accepts Medicare², provide coverage no matter where you are in the U.S. and are guaranteed renewable for life³. 

Read more about Medicare Supplement Insurance or understand how Medicare Supplement Insurance compares to Medicare Advantage.

Medicare Advantage Special Needs Plans

Special Needs Plans are offered to Medicare Advantage Plan members with certain health care needs or who have a limited income. 

There are three types of SNPs: 

1. Dual Eligible SNP (D-SNP) are for members with both Medicare and Medicaid. 

2. Chronic Condition SNP (C-SNP) are for members with certain chronic health conditions, like chronic heart failure, dementia or diabetes. 

3. Institutional SNP (I-SNP) are for members who live in a long-term care facility or nursing home. 

These plans provide the same medical benefits as a Medicare Advantage Plan. Depending on the SNP you are eligible for, extra services may include care coordination, care transition assistance and case management. Find out more about Special Needs Plans and if you may be eligible.

How much does Medicare cost?

Medicare is not free. The different types of Medicare each have certain out-of-pocket costs.  

• Original Medicare, or Parts A and B, comes with monthly premiums that vary from year to year, depending on your income level. Part A and Part B each have  their own annual deductible, as well as copays and coinsurance for care and services. 

• Medicare Advantage plans, or Part C, often come with low or no monthly premiums, depending on the plan. You will pay the copays and/or coinsurance for various services and care, as well as copays for prescriptions if included in the plan. Costs and coverage can vary.  

• Medicare Prescription Drug plans, or Part D, have a monthly premium as well and may also have a prescription deductible depending on the type of prescription drugs you need.  

• Medicare Supplement Insurance plans, or Medigap, have monthly premiums which help pay some of the health care costs that Original Medicare doesn’t cover. 

We can help you learn more about the specific costs of each type of Medicare plan. Read Medicare Costs, Coinsurance and Penalties.

When should you enroll?

You may be able to enroll in a Medicare plan during specific timeframes based on your eligibility. Let’s understand what those time frames are. 

Signing up for Medicare – Initial Enrollment Period: When you turn 65, you must choose either to sign up for Original Medicare (Parts A and B) or a Medicare Advantage Plan through a private insurer,⁴ like HealthSpring.

• You are eligible to sign up during the three months before the month in which you turn 65, during your birthday month and through the three months that follow your birthday month. So, you have seven months in which to sign up for Medicare. 

• Note: If your birthday falls on the first of the month, your IEP starts four months before your 65^th birthday and ends two months after your 65^th birthday. In general, your Medicare coverage starts on the first day of the month before you turn 65. 

If you have ESRD or a chronic condition or disability for which you receive Social Security Benefits, you will be eligible for Medicare no matter your age. 

Medicare Annual Open Enrollment: Medicare AEP runs from Oct. 15 – Dec. 7 each year. During this time, you can decide if you want to make any changes to your current Medicare coverage. 

For example, if you signed up for Original Medicare when you turned 65, you may decide you want to join a Medicare Advantage plan instead, or vice versa.

Special Enrollment Period: If you do not enroll in a plan during your Initial Enrollment Period or the Annual Enrollment Period, you must qualify for a Special Enrollment Period to sign up for a Medicare Advantage or standalone Part D plan. Certain life events may qualify you for an SEP, like:  

• Moving out of your plan’s coverage area 

• Entering or leaving a long-term care facility 

• Losing your creditable drug coverage 

• Qualifying for financial assistance through the Extra Help program and more 

These life events give you a limited time frame to enroll or make changes to your current Medicare coverage without paying a late enrollment penalty. But the time frame depends on the life event and when it happens. Not sure if you’ve had a life event that may qualify for an SEP? Contact us today so you don’t miss your chance to enroll. 

Signing up for a Medicare Supplement Insurance policy (Medigap): If you are 65 or older and have signed up for Original Medicare, then you may be eligible for a Medicare Supplement Insurance plan. Keep in mind, these plans are not part of the federal government’s Medicare program and are only sold through private insurers, like HealthSpring. 

Open Enrollment is a 6-month period during which you can buy any Medicare Supplement policy sold in your state, even if you have a pre-existing health condition. This period automatically starts on the first day of the month when you meet both of the following eligibility requirements: 

• You’re 65 or older, and 

• You’re enrolled in Medicare Part B (Medical Insurance)

You can apply for a Medicare Supplement Insurance policy any time during the year. However, during your Open Enrollment Period, you are guaranteed Medicare Supplement Insurance coverage.  

When applying outside of your Open Enrollment Period, you will be subject to restrictions based on your previous health history or current medical conditions, and you could also be denied acceptance. 

Learn more about when you may be eligible for each type of Medicare plan and how you can enroll at Medicare Eligibility and Enrollment.

Frequently asked questions about Medicare