Medicare is one of the most important decisions retirees make, yet it's also one of the most misunderstood. Despite how simple the system is at its core, the number of options, rules, and conflicting incentives has left many seniors overwhelmed and misinformed. This guide will help you cut through the noise and clearly understand what Medicare is, how the different parts work, and which type of coverage might be best for you.

Table of Contents

1. What Is Medicare?
2. Understanding Medicare Part A
3. Understanding Medicare Part B
4. Where the Gaps Begin: The 80/20 Split
5. Filling the Gaps: Medicare Advantage vs. Medicare Supplement
6. The Truth About Medicare Advantage (Part C)
7. What Is a Medicare Supplement (Medigap)?
8. Case Study: Why the Right Plan Matters
9. Why Most People Never Hear About Plan G
10. Making the Best Choice for Your Health and Wallet
11. Key Takeaways
    
    

1. What Is Medicare?

Medicare is the federal health insurance program for people aged 65 and older, and for some younger individuals with certain disabilities. At its most basic level, Medicare has two core parts: Part A and Part B, collectively known as "Original Medicare."

Understanding these two parts is essential, as every Medicare decision you make builds off of them.

2. What does Medicare Part A cover?

Medicare Part A primarily covers your hospital-related expenses. 

Think of it as your coverage for inpatient care:

• Hospital stays
• Skilled nursing facilities
• Hospice care
• Some home healthcare
  
  

Most people are automatically enrolled in Part A when they turn 65, as long as they or their spouse paid Medicare taxes through employment. While it's often referred to as “free,” this is only because you've already paid into the system through payroll deductions. There is no monthly premium for most people, but there is a deductible—$1,676 in 2025.

After that deductible is met, Medicare covers 100% of your hospital expenses for the first 60 days of a hospital stay.

‍

3. What is Medicare Part B?

Medicare Part B covers your medical needs outside the hospital:

• Doctor’s office visits
• Lab tests and diagnostic imaging
• Preventive services
• Some vaccines
• Outpatient surgeries
  

Unlike Part A, Part B requires enrollment and has a monthly premium, which is about $185 in 2025. There’s also an annual deductible of $257, after which you enter an 80/20 split—Medicare covers 80% of approved costs, and you’re responsible for 20%.

Here’s the catch: There’s no cap on that 20%. That could be fine for minor checkups—but what if you’re receiving expensive outpatient care like chemotherapy?

‍

4. Where the Gaps Begin: The 80/20 Split

Original Medicare leaves beneficiaries responsible for a significant portion of their healthcare costs. The 20% out-of-pocket under Part B can get very expensive, especially without an out-of-pocket maximum. That means there's no safety net.

This is the reason secondary coverage is often needed—and where most of the confusion begins. 

That secondary coverage can come in one of two forms:

• Medicare Advantage (Part C)
• Medicare Supplement (Medigap)

‍

Case Study: How Dave and Judy Uncovered $112,000 in Additional Social Security Income

‍

5. Filling the Gaps: Medicare Advantage vs. Medicare Supplement

Medicare Advantage and Medicare Supplement plans are often confused with each other, but they are very different in structure, provider access, cost, and flexibility.

Medicare Advantage (Part C):

• Replaces your Original Medicare (Part A and B)
• Run by private insurance companies
• Usually has low or $0 premiums
• Requires you to use a network of doctors and hospitals
• May include prescription drug coverage and other benefits
• Requires prior authorizations and sometimes denies coverage
  

Medicare Supplement (Medigap):

• Works alongside Original Medicare
• Helps cover your share of costs (e.g., deductibles, co-pays)
• No networks—go to any doctor or hospital that accepts Medicare
• Monthly premium required
• More predictable costs and fewer restrictions

6. The Truth About Medicare Advantage (Part C)

Medicare Advantage plans are aggressively marketed. That’s because when you enroll:

• The government pays private insurers ~$1,000/month to manage your care.
• Agents earn $600–$700 in commission to enroll you.
• These incentives far exceed the ~$130 agents earn when enrolling you in a Medicare Supplement.
  

Here’s what isn’t often advertised:

• You’re restricted to a provider network.
• Your care is subject to approval by the insurance company.
• If you want to switch back to a Medicare Supplement later, you may be denied coverage due to pre-existing conditions (unless you’re within your original enrollment window).
  

And critically: A study by the American Society of Clinical Oncology shows Medicare Advantage patients receive statistically less care and have higher mortality rates when facing cancer compared to those on Original Medicare.

7. What Is a Medicare Supplement (Medigap)?

Medigap plans supplement the gaps in Original Medicare. These plans do not replace your Medicare—they work with it.

You continue using Medicare Part A and B. The supplement covers costs that Medicare doesn’t—like that 20% co-insurance, hospital costs, and deductibles.

One Plan Stands Out: High Deductible Plan G

High Deductible Plan G is:

• Rarely advertised
• Has the lowest agent commissions
• One of the most cost-effective and comprehensive options
  

How it works:

• Monthly premium: ~$50/month
• Annual deductible: $2,850
• After deductible: 100% of costs covered
  
  

This means you pay out-of-pocket until you reach $2,850 in a year—then everything is covered. You can go to any doctor, anywhere in the U.S. who accepts Medicare.

This is the plan the advisor in the transcript personally chose for their parents.

‍

How much Social Security will I get?

‍

8. Case Study: Why the Right Plan Matters

A real example illustrates how this plan works.

Dan’s own father had an eight-day hospital stay with charges totaling $65,000. Medicare approved $64,000, and the out-of-pocket cost was $1,400. That cost applied to the High Deductible Plan G’s $2,850 deductible—meaning the rest of the year, almost all additional care would be covered at no cost.

And unlike Medicare Advantage, there were:

• No pre-authorizations
• No network restrictions
• No surprises
  
  

9. Why Most People Never Hear About Plan G

Unfortunately, most beneficiaries never hear about High Deductible Plan G. Here’s why:

• It pays agents very little—only about $130 per enrollment.
• Medicare Advantage pays five times more, leading agents to push those plans instead.
• The marketing and commercials you see are often sponsored by Medicare Advantage providers.
  

Many agents don’t discuss Medigap options at all—especially High Deductible Plan G. And while Medicare Advantage may be the right fit for some, you deserve to know all your options—not just the ones that pay your agent the most.

10. Making the Best Choice for Your Health and Wallet

Here’s how to decide what’s right for you.

Choose Medicare Advantage If:

• You can’t afford a monthly Medigap premium
• You’re comfortable staying in-network
• You don’t anticipate complex or specialized care needs
• You’re still in relatively good health
• You understand and accept the risk of future restrictions
  

Choose Medicare Supplement (especially High Deductible Plan G) If:

• You value freedom of choice in providers
• You want predictable and comprehensive coverage
• You don’t want to deal with referrals, networks, or authorizations
• You want protection from plan changes or restricted access
• You can afford the monthly premium and potential deductible
  

11. Key Takeaways: The Different Types of Medicare

• Original Medicare (Part A and B) is the foundation of your coverage.
• It leaves 20% of medical costs uncapped, which can be financially risky.
• You can fill those gaps with Medicare Advantage or a Medicare Supplement.
• Medicare Advantage is heavily incentivized for agents but may limit your care access and decision-making in retirement.
• Medicare Supplement (especially High Deductible Plan G) gives you full access to any Medicare-accepting provider and caps your total risk.
• The plan you choose at age 65 is critical. If your health declines later, you may not be able to switch plans due to underwriting rules.
• Always ask your advisor to show you all available options, including those they may earn less on.
  
  

Different Medicare Types? Consider The Long-Term

Medicare decisions should be made based on your long-term health needs, not sales incentives. While Medicare Advantage plans can offer short-term savings, the hidden tradeoffs—limited provider access, prior authorizations, and plan changes—can seriously impact your care in the future.

Meanwhile, a well-chosen Medicare Supplement like High Deductible Plan G offers freedom, predictability, and peace of mind—especially important as healthcare needs grow more complex with age.

You’ve worked your whole life to earn these benefits. Make sure your choices reflect what’s best for your retirement, not what’s most profitable for someone else.

If you’re unsure what path is right for you, speak with a fiduciary retirement advisor who isn’t compensated by Medicare plan sales—or one who’s committed to full transparency.

‍