Comparing Medicare, Medicare Advantage, Medigap and Medicaid

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Which type of Medicare coverage you choose determines more than how much your premium costs you each month. It affects how much you spend out of pocket and how you receive services.

Let’s dive into the differences between and similarities of Medicare, Medicare Advantage, Medigap and Medicaid, so you can make the best Medicare coverage decision for your needs and lifestyle.

Medicare Part A

This is hospital insurance, which generally covers medically necessary:

  • Home health care 
  • Hospice care
  • Inpatient hospital stays and care
  • Skilled nursing facility services

For Part A, you usually don’t pay a monthly premium if you or your spouse paid Medicare payroll taxes for an extended length of time – at least 10 years. However, some people will pay a monthly premium. Regardless of your monthly premium cost, everyone pays the same deductible, copays and coinsurances for health care services.

Medicare Part B

This is medical insurance. Though not a complete list, Part B generally covers medically necessary:

  • Alcohol use counseling
  • Chemotherapy
  • Doctor visits
  • Durable medical supplies and equipment
  • Preventive care (i.e., screenings, vaccines, wellness visits)
  • Outpatient care
  • Outpatient mental health care
  • Physical therapy

Vaccines (e.g., influenza, pneumococcus)

Part B typically requires that you pay a standard premium each month.

Original Medicare

Original Medicare is another name for Medicare Parts A and B. This fee-for-service plan covers most – but not all – basic and medically necessary health care services and supplies. With Original Medicare, you will pay a deductible and 20% coinsurance anytime you receive Medicare-approved care.

Medicare Supplement Insurance


Also called Medigap, this is a supplemental plan option chosen alongside Original Medicare to help pay for additional out-of-pocket costs, including: 

  • Deductibles
  • Copays
  • Coinsurance

Medigap plans are offered by Medicare-approved private health insurance companies and will have a monthly premium. Some Medigap plans also provide additional benefits not covered by Original Medicare, such as health care coverage for when you travel outside the U.S. These plans do not include prescription drug coverage.

Medicare Part C

Also called Medicare Advantage, these are plans through Medicare-approved private health insurance companies that administer the benefits of your Original Medicare. Even though you are receiving your benefits from a private health insurance company, you are still in the Medicare program, with Medicare rights and protections.

Not all Part C plans work the same, but many do have additional coverage options that are not provided through Original Medicare. This often includes chronic illness, dental, hearing and vision care, as well as drug coverage.

A benefit of Part C is that, unlike Original Medicare, there is an out-of-pocket maximum each year for covered services, helping protect you from excessive annual health care costs.

With many Part C plans, you will likely be required to use health care providers from the plan’s network (in-network providers). Some, but not all, Part C plans offer out-of-network coverage but for a higher out-of-pocket cost.

Medicare Part D

This is prescription drug coverage through a Medicare-contracted private insurance company. It may help lower the cost you pay for your prescription medications. You will pay a monthly premium for Part D. Part D cannot be combined with Part C plans that provide prescription drug coverage. If you have both, you will be disenrolled from Part C and instead returned to Original Medicare with Part D coverage.

Medicaid

Medicaid is a state and federal program providing free or low-cost health care coverage to millions of people in the U.S. who meet eligibility requirements based on assets and income. If you are eligible, you can have both Medicare and Medicaid coverage. They will work together to cover and lower your health care costs.

Download your free guide to Medicare Advantage plans from Align powered by Sanford Health Plan today here. For more information, contact a Sanford Health Plan licensed agent at (888) 535-4831 on Monday through Friday between 8 a.m. and 5 p.m. CST, excluding holidays, to learn more.