A stethoscope, pill, and capsule signify different Medicare coverage options available.

What Medicare coverage options are available?

When it comes to Medicare coverage, there isn’t a one-size-fits-all solution. Every person’s health considerations are different, and, luckily, there are many different coverage options available to address this fact. Whether you take multiple prescription drugs daily or are as fit as a fiddle, there is a combination of plans that can work for you. Even if you don’t have a lot of medical needs right now, you could use this coverage for the next several decades. For this reason, it’s smart to think ahead and begin formulating a plan.

In this article, we will explore a few scenarios people could face in the real world, as well as the coverage options that would work best for each of their unique situations. We hope that this will help you identify a combination of plans that would best suit your own unique needs. Before we begin, here is a quick review of the main forms of Medicare coverage and how they all fit together. If you need a more in-depth explanation of Medicare Part A, B, C, or D, check out this article. 

Medicare Parts A & B (Original Medicare)


  • Part A covers inpatient hospital stays, hospice care, and care in a skilled nursing facility. It may also cover some health care.
  • Part B covers outpatient care, some medical services (like ambulance services and lab tests), preventative services and medical supplies (like wheelchairs and walkers).


Original Medicare doesn’t cover any of the following costs:

  • Drugs from the pharmacy
  • Most dental care, including dentures, dental procedures or cleanings, fillings, dental plates, tooth extractions, and checkups
  • Cosmetic surgery
  • Long-term nursing care that goes over 100 days
  • Hearing aids
  • Routine foot care
  • Eye exams for prescription glasses
  • Acupuncture

While Medicare Parts A & B cover the basics, most people choose to enroll in some form of additional coverage to fill in benefit gaps or to help cover their costs. There are three main combinations for additional coverage.

Medicare Part D (Prescription Drug Coverage)


  • Part D helps cover the cost of prescription drugs, which is often the largest expense for Medicare enrollees.


  • Certain medications may not be covered.
  • After Medicare covers up to a certain amount, you’ll enter into a gap in coverage (known as the “donut hole”). During this stage, you’ll be paying more out-of-pocket for your prescriptions. Once you enter the Catastrophic Coverage stage, your Part D plan will begin covering at least 95% of your prescription drug costs for the remainder of the year.

Medicare Part C (Medicare Advantage)

A Medicare Advantage Plan is an alternative to the Original Medicare program. These plans are run by private insurance companies instead of the government. However, they are still required to offer the same benefits as traditional Medicare. They sometimes offer additional benefits, such as vision and dental coverage. Most Advantage plans include Part D prescription drug coverage.


  • Many Medicare Advantage plans include benefits not covered by Parts A & B. This can include vision, dental, hearing, and gym memberships.
  • Some Medicare Advantage plans have low or $0 deductibles. Each plan comes with a maximum out-of-pocket limit on how much you’ll spend on covered health care costs each year, other than prescription drug costs. Once you’ve reached that limit, you’ll pay nothing for covered services.


  • Specifics of each plan depend on the insurance company.
  • Most plans have smaller networks, so your preferred doctor or hospital may not be covered.
  • Networks are local, so you may not have coverage when you travel.
  • Different medications are covered by each plan.

Medicare Supplement (or “Medigap”)


  • Helps you pay your share of the costs (coinsurance, copayments, or deductibles) of Medicare-covered services.
  • No additional network restrictions. You can visit any doctor that takes Medicare, and on some plans, even doctors that don’t.
  • Some plans have international coverage options.


  • Monthly premiums can be more costly than other plan types.
  • Not all pans cover both the hospital (Part A) and medical (Part B) deductibles.
  • Plans are difficult to change once you sign up.

For a more in-depth explanation of the various types of Medicare supplement plans, visit our article, “Choosing the right Medigap policy.”


A + B + D

This is basic Medicare coverage, consisting of Part A (hospital), Part B (medical), and Part D (prescription drug). If you choose this combination, you’ll just need to buy a Part D insurance plan. Not all plans cover the same drugs, so it’s important to pick a plan whose formulary includes the prescriptions you take routinely.

A + B + D + Supplement Plan

With Original Medicare, the government pays for about 75% of your covered medical costs. A Medicare Supplement plan may cover most, if not all, of the other 25%. And don’t forget that Medicare’s Part D benefits are administered through private insurance plans. To get drug coverage, you’ll need to select a Part D plan as well.

A and/or B + Employer/Union Insurance

If you’re over 65 and still working, you may want to continue getting health care benefits from your employer or union. In this case, you will want to speak with your health plan benefits administrator about how your coverage will work with Medicare. Specifically, you will want find out which insurance would be the primary payer before deciding to sign up for Parts A and/or B. This is important because if your employer-based insurance pays second to Medicare, you’re going to want to sign up for Parts A & B to avoid penalties down the line.

Real-world examples

Miguel lives half the year in New York and the other half of the year in Florida. He has doctors he regularly sees in both locations and picks up prescription drugs from pharmacies in both states.

Miguel should consider a supplement plan and a Part D drug plan. Unlike Medicare Advantage, a supplement plan covers his out-of-pocket costs for any doctor who takes Medicare, regardless of where they’re located. In addition, most Part D plans have coverage for drugs at major pharmacy chains across the US. When shopping for Part D plans, Miguel should check to make sure his pharmacies are in network and his drugs are covered when shopping for plans.

A supplement/Part D combination may be more expensive than a Medicare Advantage plan, but it will give Miguel the most flexibility considering his snowbird lifestyle. Otherwise, he may (ironically) be left out in the cold when he’s in Florida. If keeping monthly costs low is a priority for Miguel, he may want to skip the supplement plan. However, he would be responsible for more costs when he needs care. It may also be harder for him to sign up for affordable supplemental insurance later, as he would be subject to medical underwriting.

Donna lives in California year-round and is on a fixed income. She wants good coverage for doctors and drugs, but wants to minimize the amount she spends each month on her premium.

Donna should consider a Medicare Advantage plan. Medicare Advantage plans use local networks of doctors and hospitals to help keep monthly costs (premiums) lower. In most areas, there are low or $0 premium HMO plans, most of which also include drug coverage.

It’s important to note that in an HMO plan, she will need to choose a Primary Care Physician who can provide referrals if she needs to see a specialist. Essentially, a Medicare Advantage plan is a good choice if you’re willing to sacrifice some flexibility for lower monthly costs.

Helen is enrolled in Medicare Parts A & B and is looking for ways to cut down on her medical costs. She recently started receiving Medicaid benefits.

Helen, like Donna, should consider a Medicare Advantage plan. Medicare Advantage plans use local networks of doctors and hospitals to help keep monthly costs (premiums) lower. In most areas, there are low or $0 premium HMO plans, most of which also include drug coverage.

Because she receives Medicaid benefits, she may qualify for certain “dual-eligible” Medicare Advantage plans, which could have additional reduced out-of-pocket costs for services and drugs.

Key takeaways

  • Most people choose some form of coverage in addition to Original Medicare.
  • There are 3 main combinations of coverage:, Medicare Advantage; Parts A, B, D, and Supplemental; and simply Parts A, B, and D.
  • Depending on your circumstances, some combinations may work better for you than others. For example, if accessing care in multiple states is important for you, then a combination with a Medicare Supplement plan is usually the best fit.

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