Home › Knowledge › What Does Medicare Cover
CJ Karrer
Writer · Reviewed by Richard ChanUpdated Jun 12, 2026
5 min read
Medicare Advantage plans (Part C) typically require you to use network doctors and hospitals, unlike Original Medicare which is accepted by any provider taking Medicare.
Prescription drug coverage is not included in Original Medicare, requiring beneficiaries to purchase a standalone Part D plan or choose a Medicare Advantage plan that includes it.
Beneficiaries have the opportunity to review and change their Medicare Advantage and Part D coverage annually during the Fall Open Enrollment Period from October 15 to December 7.
Do not rush the incredibly important sign-up process. While it is natural to seek advice from trusted friends and family members, you must be acutely aware that the Medicare plan working perfectly for them might be a disastrous fit for you.
You would be amazed by how many well-meaning seniors simply copy the coverage choices of a friend or spouse. The stark reality is that there is absolutely no "one-size-fits-all" Medicare plan. The follow-on implications of making a hasty choice can be severe, leading to agonizing issues like discovering your preferred doctors are out-of-network, realizing your essential medications are not covered, or finding yourself drowning in unexpectedly high out-of-pocket costs.
To help protect you, here are the four most common—and costly—mistakes seniors make when trying to understand their coverage:
It is incredibly easy to get these two confused. Both plan types are sold and managed by private insurance companies, and very often, the exact same household-name companies sell both products.
However, they are fundamentally different in how they structure your health coverage, and—this is critical—you cannot legally be enrolled in both at the same time.
| Medicare Advantage (Part C) | Medicare Supplement (Medigap) | |
| Description | A private, bundled alternative to Original Medicare (Part A and B). | A private supplemental policy that provides "gap" coverage, paying the costs that Original Medicare leaves behind. Often referred to as "Cadillac" coverage. |
| Monthly Premiums (Paid in addition to Part B) | $0 – $100 per month | $90 – $300+ per month |
| How You Pay for Care | You pay copays "as you go" when you use services, offset by lower monthly premiums. | You pay upfront through higher monthly premiums, resulting in limited or no copays when you actually use services. |
| Doctor Coverage & Networks | Typically requires you to strictly use a localized network of doctors and hospitals. | Offers immense freedom: you can see any doctor or hospital in the entire U.S. that accepts Original Medicare. |
| Capped Out-of-Pocket Costs? | Yes. $9,200 for in-network care. $12,450 for out-of-network care (if covered at all). | No – however, because your Medigap plan actively covers most out-of-pocket costs via your premium payments, a cap is generally unnecessary. |
Beneficiaries who sign up for Medicare Advantage plans are frequently, and understandably, attracted by the allure of "$0 premiums" and the promise of extra benefits like dental, vision, and hearing coverage.
While these are undoubtedly attractive qualities, a critical point that is dangerously overlooked is that these plans operate under specific, restrictive rules regarding provider networks.
Medicare Advantage plans are fundamentally "managed care plans." This means the insurance company has aggressively negotiated discounts with specific healthcare providers, forming a closed "network" to deliver care at reduced costs. If you stray outside this network, you may face massive bills.
Even plans offered by the exact same insurance company can differ wildly in which doctors and hospitals are actually covered.
The two most common Medicare Advantage network types are HMO and PPO:
| HMO (Health Maintenance Organization) | PPO (Preferred Provider Organization) | |
| Doctor Network | Strictly limited to doctors and hospitals within the plan’s local network. Out-of-network care is not covered (except in true medical emergencies). | Features a "preferred" network of doctors and hospitals. Out-of-network doctors are covered, but you will pay a significantly higher cost-share. |
| Care Coordination | Your care is heavily coordinated by a single designated doctor, known as your Primary Care Physician (PCP). | No care coordinator is required. You are generally free to directly book any doctor. |
| Referrals for Specialists | You must obtain a formal referral from your PCP before seeing a specialist. | No referrals are necessary to see specialists. |
Most Medicare beneficiaries understand they should sign up for a Part D prescription drug plan to lower their costs. However, we consistently encounter seniors who dangerously believe that their specific medications will be covered "similarly" across all available drug plans.
This is simply false. Every single Part D plan maintains a unique "formulary"—a highly specific, proprietary list of the drugs they agree to cover. While Medicare requires these formularies to include at least two drugs in the most common therapeutic classes, there is no guarantee they will include your specific, required medication.
In general, you must understand that each Part D drug plan:
| Tip: Aggressively check your drug costs. Do not become a tragic Medicare statistic. A staggering 9 out of 10 Medicare beneficiaries are currently enrolled in a drug plan that is not the lowest cost option available to them. It is startlingly common for the exact same medication to vary in cost by 200% to 300% across different plans offered within the exact same zip code. |
Unfortunately, Medicare is absolutely not a "set it and forget it" system. Insurance companies are legally allowed to—and routinely do—change their plan benefits every single year. Crucial services can be dropped, deductibles can spike, and most importantly, doctor networks and drug formularies can radically shift.
You must rigorously review your coverage every Annual Enrollment Period to ensure you don’t miss these critical changes. If your personal health situation has changed—perhaps you've been diagnosed with a new condition, are seeing new specialists, or have been prescribed new drugs—you must shop around to confirm your current plan is still the safest, most cost-effective option.
We strongly recommend that all beneficiaries seek objective advice from a dedicated expert and meticulously review their plans every year. Understanding the precise boundaries and limitations of your coverage is the only way to protect your health and your life savings.
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