Key Takeaways

• Medicare is made up of multiple parts (A, B, C, and D), but understanding each one requires more than just knowing their names—you must grasp what they cover, what they don’t, and how they interact.

• In 2025, gaps in coverage, late enrollment penalties, and out-of-pocket exposure remain common pitfalls for beneficiaries who assume they have everything figured out.

What Each Medicare Part Really Means in 2025

Medicare Part A: Hospital Insurance

Part A covers inpatient hospital care, skilled nursing facility care (under certain conditions), hospice care, and limited home health services. In 2025, there are no monthly premiums for most people who worked at least 40 quarters (10 years), but there is a deductible of $1,676 per benefit period.

However, what many overlook is:

• Part A does not cover long-term custodial care.

• Skilled nursing coverage is limited to 100 days per benefit period, and only after a qualifying 3-day inpatient hospital stay.

• Coinsurance kicks in after day 60 of hospitalization, increasing the cost burden the longer you stay.

Medicare Part B: Medical Insurance

Part B helps cover medically necessary outpatient services, including doctor visits, diagnostic tests, preventive services, durable medical equipment (DME), and more.

In 2025:

• The standard monthly premium is $185.

• The annual deductible is $257.

• After meeting the deductible, you typically pay 20% coinsurance for most services.

What’s often missed is:

• Part B does not cover routine dental, vision, hearing, or most prescription drugs.

• If you delay enrollment and don’t have other creditable coverage, you’ll face a 10% penalty per year you delayed, permanently added to your monthly premium.

Medicare Part C: Medicare Advantage Plans

Medicare Advantage (MA) is an alternative to Original Medicare (Parts A and B), offered by private companies that contract with Medicare. These plans often include additional benefits like dental or vision, and they may incorporate prescription drug coverage.

But here’s where people misunderstand:

• MA plans must cover everything Original Medicare does—but how they cover it can be very different. This includes prior authorization requirements, limited networks, or stricter referrals.

• You still pay the Part B premium.

• Costs can be higher mid-year if your plan changes its benefits or formulary, which it’s allowed to do annually.

• Some MA plans have high maximum out-of-pocket (MOOP) limits—in 2025, this could be as high as $9,350 in-network.

Medicare Part D: Prescription Drug Coverage

Part D plans cover outpatient prescription drugs and are also run by private companies approved by Medicare. You can get Part D either as a stand-alone plan (if you have Original Medicare) or included in most Medicare Advantage plans.

In 2025:

• There is a $590 maximum deductible.

• Once your out-of-pocket spending reaches $2,000, you enter the catastrophic coverage phase, and the plan pays 100% of covered drugs for the rest of the year.

Still, Part D has its own blind spots:

• Not every drug is covered—each plan has its own formulary (list of covered drugs).

• If you don’t enroll when first eligible and lack creditable coverage, you’ll face a permanent penalty added to your monthly premium.

• Coverage rules can include step therapy, prior authorization, or quantity limits, which delay or restrict access.

What Medicare Doesn’t Cover (And Why It Matters)

Understanding what’s excluded from Medicare is just as important as knowing what’s covered. In 2025, Original Medicare still does not cover:

• Long-term custodial care (like assisted living or extended nursing home stays not related to rehabilitation)

• Routine dental care, dentures, and oral surgery

• Eye exams for glasses or contact lenses

• Hearing exams and hearing aids

• Cosmetic surgery

• Care outside the U.S. (except in very limited emergency cases)

To fill these gaps, many people purchase supplemental insurance, often referred to as Medigap, but even then, coverage limitations remain.

Enrollment Timelines You Can’t Afford to Miss

You don’t automatically get every part of Medicare just by turning 65. Knowing when to sign up is critical to avoid late penalties and gaps in coverage.

Initial Enrollment Period (IEP)

Your IEP is a 7-month window: 3 months before your 65th birthday, the month of your birthday, and 3 months after. Missing this window could mean waiting until the next enrollment period and incurring penalties.

General Enrollment Period (GEP)

If you miss your IEP and don’t qualify for a Special Enrollment Period, you can sign up during GEP from January 1 to March 31 each year. Your coverage will start July 1, and you may face penalties.

Medicare Advantage and Part D Annual Enrollment

From October 15 to December 7, you can switch, add, or drop a Medicare Advantage or Part D plan. Any changes take effect on January 1 of the following year.

Medicare Advantage Open Enrollment

From January 1 to March 31, those already enrolled in a Medicare Advantage plan can switch to another MA plan or revert to Original Medicare. You can only make one change during this period.

The Danger of Assuming Medicare Covers Everything

Many people assume Medicare is all-inclusive. The reality is different. Even if you have all four parts, you could still face significant out-of-pocket costs.

Here’s why:

• Deductibles and coinsurance add up quickly.

• Provider networks may be limited in Medicare Advantage.

• Drug formularies may not include your needed medications.

• Exclusions like dental and long-term care aren’t minor—they’re major cost drivers.

• Prior authorizations can slow care access.

Coordination with Employer or Retiree Coverage

If you’re still working or covered by a spouse’s plan, timing your Medicare enrollment correctly matters. You may delay Part B and Part D without penalty if you have creditable coverage, but once that ends, you’ll need to act fast.

A Special Enrollment Period (SEP) allows you to enroll penalty-free within 8 months of losing creditable coverage. However, drug coverage requires you to act within 2 months to avoid Part D penalties.

How Medicare Works with Other Insurance

In some cases, Medicare is secondary insurance:

• If you’re 65+ and still actively working for an employer with 20 or more employees, your group plan pays first.

• If you’re under 65 and have disability-based Medicare with employer coverage from a company with 100+ employees, the employer plan pays first.

Understanding this coordination is crucial, especially if you have other retiree or veteran benefits.

What About Medigap?

Medigap plans help cover some out-of-pocket costs left by Original Medicare, such as:

• Part A and B coinsurance

• Deductibles (except the Part B deductible in most new plans)

• Foreign travel emergency care

However:

• You must have Original Medicare (not Advantage) to buy a Medigap plan.

• You generally get the best pricing if you enroll during your 6-month Medigap Open Enrollment Period that starts when you are both 65 and enrolled in Part B.

After that, insurers can deny you coverage or charge more based on pre-existing conditions.

Medicare Is a Foundation, Not a Finish Line

Even with all parts in place, Medicare is just one piece of your healthcare puzzle. It lays the groundwork, but you must actively plan around it to meet your full medical and financial needs.

This includes:

• Assessing your total healthcare costs annually

• Reviewing plan changes every October through the Annual Notice of Change (ANOC)

• Understanding your drug needs and checking Part D formularies

• Making sure your doctors and specialists are in-network if using Advantage

• Consulting a licensed agent if your situation changes

When Clarity Makes a Difference in Your Medicare Journey

In 2025, understanding Medicare means more than just knowing the difference between Parts A, B, C, and D. It’s about seeing the blind spots, enrollment pitfalls, cost traps, and coverage gaps. By taking a more proactive role in your Medicare planning, you protect yourself from financial and medical surprises.

If you’re unsure how all these moving parts apply to your specific situation, get in touch with a licensed agent listed on this website who can guide you based on your personal healthcare needs and goals.