SHM Logo
Call Us Today! 336.628.8922

Medicare 101: Understanding Your Options

Anyone who has entered the Medicare world either, when helping their grandparents, parents, or themselves, knows how confusing and stressful it can be. Sure, it's a government, program but Medicare is particularly mystifying. Big insurance companies take advantage of the lack of information surrounding Medicare to sell their latest and greatest products to the next unsuspecting customer.

Senior Health Medicare is dedicated to educating, explaining and demystifying the world of Medicare for Piedmont Advantage Credit Union members. Let's move on to explain the basics of Medicare and some of the key facts you need to know before making any healthcare decisions.

How Medicare Works

Traditional Medicare is broken down into two primary parts: Part A and Part B.

Medicare Part A: This is the hospital part of your insurance. Any inpatient, hospital stays, some skilled nursing care, some hospice care, and some general healthcare procedures are covered under Medicare Part A. This is one of the simplest parts of your Medicare coverage, however depending on hospital coding and labeling, it can get complex.

For example, the healthcare status used in hospital paperwork between triage and admittance, or between admittance and dismissal, is called "under observation" and can be trouble for a patient. When a patient is "under observation" they are not meeting the requirements of hospitalization by Medicare to engage their nursing care benefit. Medicare says you must be admitted to the hospital for three full days before you can engage the nursing care benefit. Just be careful to pay attention to your status if you are ever hospitalized under Medicare.

For now, a good way to remember is "Part A covers your stay" (in most cases).

Medicare Part B: This is the doctoring part of your coverage, your typical health insurance coverage. It covers two types of medical services:

Couple Relaxing
  1. Preventive medical services such as vaccinations, illness screenings, exams, and lab tests are all covered under Part B. The lines here can become blurry, but essentially any sort of screenings or lab work done in an attempt to prevent major illness is considered preventive care under Medicare. Additionally, coverage can extend to necessary durable equipment like walkers or wheelchairs, when a diagnosis requires it.
  2. Necessary treatment for existing conditions and illnesses is covered. X-rays, outpatient services, and routine doctor's visits that are necessary per the condition are included in this category.

When you go to the hospital or doctor, the institution then turns around and bills Medicare for your procedures. So, let's say you had a knee replacement. The hospital says to Medicare "the knee replacement costs $10,000 here." Medicare says "No way- according to our DRG, (diagnoses-related groups, basically Medicare's master list of codes and amounts they cover) this procedure costs $5,000, so we will give you $4,000."

In this case, the hospital takes their $4,000 from Medicare and then bills you, the patient, for the remaining $1,000. Traditional Medicare only covers 80 percent of the approved amount, leaving you to pay for the remaining 20 percent.

Medicare Part D: This is the part of Medicare that helps to cover prescription drug costs. Though it is the smallest part of Medicare, it is incredibly important. The only time to change is during the Annual Election Period (October 15 through December 7) and these plans require reviews annually. The plan costs and benefits can change each year, so it's always important to review your drugs and budget for the year with an advisor.

This is how Medicare works in a general sense. The remaining 20 percent that is left for the insured is the reason why people elect to buy Medicare Supplement or Medicare Advantage plans. Medicare supplement plans almost always cost more in monthly premium, but they have little to no out-of-pocket costs or co-payments. Whereas, Medicare Advantage plans have low monthly premiums (sometimes even $0) but high out-of-pocket costs.

Now we'll get into a breakdown of pros and cons to both types of Medicare insurance plans.

Medicare Supplement Plans (Medigap) Versus Medicare Advantage Plans (MAP)

We'll start with Medicare Advantage.



Next, the Medicare Supplement or "Medigap" plan.

Understanding medicare


  • Depending on your plan, almost everything is covered. Out-of-pocket costs (OPCs) are relatively low and easy to predict.
  • You can change your Medicare Supplement programs any time of year but you must be able to pass medical health questions in order to qualify.
  • Coverage is more predictable and easier to understand.
  • You can keep your doctor! Chances are, he or she accepts original Medicare and your corresponding supplement plan. 98% of doctors accept Original Medicare with a Medigap/Medicare Supplement.


Medicare Supplement plans are more comprehensive, but come at a higher monthly premium. Anyone who likes to plan for every possible expense and avoid surprises belongs on a Medigap plan. Depending on which letter plan (the Medicare Supplement plans are lettered “A” through “N”) you choose, you may have little to no co-payments or out of pocket expenses other than your monthly premiums. For example, Plan G only requires you to meet a $203 deductible for your first non-preventive visit, then you are covered 100% for everything else you do that year. Anyone with preexisting conditions should choose a Medigap plan to be properly protected for the rest of their lives. Once you're out of traditional Medicare and enrolled in a Medicare Advantage plan, you must answer health questions to get back in.

Important Medicare Facts

These are key takeaways from this article and things to remember:

  • You can change your Medicare Supplement plan to another Medicare Supplement plan any time of year, NOT only during the Annual Election Period (AEP).
  • Medicare Part A covers your stay, Medicare Part B covers who you see, and Medicare Part D covers prescription drugs.
  • Since January 2020, new enrollees to Medicare can no longer purchase Plan F. This means anyone that started Medicare prior to 2020 can purchase it or keep their Plan F if they already have it. However, plans that close off new enrollment experience higher and more frequent premium rate increases. Anyone with a Plan F Medicare Supplement should talk to an agent ASAP to discuss options to move. In most cases, we can save people money without compromising coverage.
  • Senior Health Medicare advisors are standing by to explain more about how Medicare works and to see if you could be saving money.

Call 336.628.8922 or click here to research rates on your own.