Most People Only Understand One or Two Parts of Medicare—That’s Where Trouble Begins

Key Takeaways

• Medicare includes multiple parts, each covering different healthcare needs, but most people only become familiar with one or two. This leads to gaps in coverage and surprises in out-of-pocket costs.

• Understanding how Parts A, B, C, and D work together in 2025 can help you make better coverage decisions, avoid penalties, and protect yourself from unexpected expenses.

You Might Know Part A and B, But That’s Just the Start

If you’ve heard of Medicare, you’ve probably heard of Part A and Part B. But here’s the issue: knowing only these two parts creates a false sense of confidence. Medicare is made up of four main parts, and each serves a specific purpose. If you’re unaware of what each one covers or excludes, you could be left with large medical bills or denied services you assumed were included.

Let’s break it down clearly.

Medicare Part A: Hospital Coverage with Limits

Medicare Part A is often called hospital insurance. It covers:

• Inpatient hospital stays

• Skilled nursing facility care (after a qualifying hospital stay)

• Hospice care

• Limited home health care

While Part A usually comes premium-free if you or your spouse paid Medicare taxes for at least 10 years, that doesn’t mean it’s cost-free. In 2025, the Part A deductible is $1,676 per benefit period. After 60 days in the hospital, you’ll owe daily coinsurance, and even more after 90 days. Skilled nursing facility care only has full coverage for the first 20 days. Beyond that, daily copayments kick in.

Medicare Part B: Doctor Visits and More

Part B covers outpatient care:

• Doctor visits

• Preventive services

• Diagnostic tests

• Outpatient surgeries

• Durable medical equipment

For 2025, the standard Part B premium is $185 per month, with a deductible of $257. After meeting your deductible, Medicare pays 80% of approved costs. You pay the remaining 20%, which has no cap.

That “no cap” is a key issue. A major health event can quickly lead to thousands in out-of-pocket costs with just Parts A and B.

Part C: Where Many Assumptions Go Wrong

Medicare Part C, also known as Medicare Advantage, replaces Original Medicare (Parts A and B) and often includes Part D (drug coverage). It’s offered by private companies approved by Medicare.

Here’s the catch: many people assume these plans offer more coverage for less. But they come with networks, prior authorization requirements, and plan-specific rules that vary widely. You may pay less upfront but face unexpected expenses or restrictions later. Some services might require referrals, and coverage can differ by county or ZIP code.

And switching back to Original Medicare later? Not always easy or guaranteed, especially if you want to add a Medicare Supplement plan.

Part D: Prescription Drug Coverage That Isn’t Automatic

Part D helps cover the cost of prescription drugs. It’s not included in Original Medicare. That means if you only enroll in Parts A and B and skip Part D, you’ll have no prescription drug coverage unless you:

• Get it through a Medicare Advantage plan

• Have creditable drug coverage from an employer or union

And if you delay enrollment in Part D when first eligible, you may face a permanent late enrollment penalty.

In 2025, the Part D landscape has changed significantly. The out-of-pocket drug cost is now capped at $2,000 per year, a welcome change. Still, you must actively enroll in a Part D plan or a Medicare Advantage plan that includes drug coverage to benefit from this cap.

Supplement Plans: Not a Part, But Still Crucial

Medicare Supplement Insurance (often called Medigap) isn’t one of the lettered Parts, but it fills the “gaps” in Original Medicare. These plans help cover:

• Part A and B coinsurance

• Deductibles (depending on the plan)

• Foreign travel emergencies

You must be enrolled in both Part A and B to buy a Medigap policy. However, if you enroll outside your Medigap open enrollment window, you may face medical underwriting, and your application could be denied or come with higher premiums.

Most people don’t realize this timing is critical.

Medicare Enrollment Isn’t Automatic for Everyone

Another pitfall: many assume Medicare enrollment is automatic at 65. That’s true only if you’re already receiving Social Security. If not, you need to actively sign up during your Initial Enrollment Period:

• Begins three months before the month you turn 65

• Includes your birth month

• Ends three months after your birth month

Miss this window and you may face penalties:

• Part B: 10% premium increase for every 12-month delay

• Part D: 1% penalty for every month you delay, applied to your monthly premium for life

Medicare Doesn’t Cover Everything

Even with all four parts, Medicare doesn’t cover every healthcare cost. Excluded services include:

• Long-term custodial care

• Most dental services

• Routine vision and hearing exams

• Eyeglasses or hearing aids (except in specific cases)

• Overseas medical care (Original Medicare only)

If you need these services, you’ll have to pay out-of-pocket or find separate insurance.

You Can’t Easily Switch Between Advantage and Supplement Later

A common assumption is that you can try a Medicare Advantage plan and switch to a Supplement plan later if you change your mind. But in most cases, you only have guaranteed access to a Supplement during: Your 6-month Medigap open enrollment period (starts when you’re both 65 and enrolled in Part B)

After that, switching may involve underwriting. You might be denied coverage or charged more based on health conditions.

Understanding this limitation up front can prevent regret later.

Coverage Decisions Aren’t One-Size-Fits-All

There’s no single best option for everyone. Your ideal coverage depends on:

• Where you live (some Advantage plans are not available in all areas)

• Whether your doctors accept Medicare or are in a plan’s network

• Prescription drug needs

• Your willingness to manage networks and referrals

• Financial priorities (lower premiums vs. lower out-of-pocket caps)

Unfortunately, most people make Medicare decisions based on what they’ve heard from friends or ads. But what works for someone else might not work for you.

Timeline for Annual Medicare Decisions

Each year, Medicare allows changes during Open Enrollment from October 15 to December 7. During this time, you can:

• Switch from Original Medicare to Medicare Advantage

• Switch between Medicare Advantage plans

• Drop Medicare Advantage and return to Original Medicare

• Join, drop, or switch Part D drug plans

Changes take effect January 1 of the following year. Outside of this period, you need a Special Enrollment Period triggered by a qualifying event.

Knowing these dates can help you prepare and review your Annual Notice of Change (ANOC), which outlines any changes to your current plan.

Misunderstandings Create Costly Surprises

The most common Medicare surprises stem from:

• Not knowing that Part A and B don’t include prescription drugs

• Assuming you’re automatically enrolled

• Believing Advantage plans always save money

• Waiting too long to buy a Supplement plan

• Missing the penalty-free window for Part B and D

• Thinking Medicare covers long-term care

These aren’t small details. They can shape your financial future and healthcare access.

Build a Complete Picture Before You Enroll

Understanding only one or two parts of Medicare is like trying to complete a puzzle with half the pieces. You may be covered in some areas but left entirely vulnerable in others. Instead of focusing just on what seems easy or popular, take time to explore all four parts and how they interact.

A fully informed Medicare strategy includes:

• Part A for hospital care

• Part B for outpatient services

• Part D for prescriptions

• A Supplement plan or a Medicare Advantage plan (not both)

And critically, it includes awareness of timelines, potential penalties, and what Medicare doesn’t cover at all.

Make Sense of Medicare Before It Affects Your Wallet

Now is the time to clear the confusion around Medicare. If you’re approaching age 65 or helping someone who is, don’t stop at understanding just Part A or B. That’s where the trouble begins. The real protection comes from knowing how all the parts work together and what gaps still exist.

Speak with a licensed agent listed on this website for personalized guidance. They can help you review your options, understand the trade-offs, and choose a plan structure that fits your needs.