📍Serving Houston, TX & surrounding areas
Medicare In A Nutshell
A non-government Medicare resource
powered by SMRTPlanning,
a retirement and healthcare planning office.
Medicare Basics · Free Guidance
What is Medicare?
Here's everything you need to know — in plain English.
Medicare is the federal health insurance program for people 65 and older. It sounds simple — but the parts, the plans, the deadlines, and the decisions can feel overwhelming fast. This page breaks it all down clearly so you know exactly
what you're working with.
Medicare in a Nutshell
Medicare is the federal health insurance program created in 1965 for Americans aged 65 and older. It also covers certain younger people with qualifying disabilities and anyone with
End-Stage Renal Disease (permanent kidney failure).
Unlike private insurance through an employer, Medicare is administered by the federal government through the Centers for Medicare & Medicaid Services (CMS). Most people pay little or nothing for Part A if they've worked and paid Medicare taxes for at least 10 years — but there are premiums, deductibles, and out-of-pocket costs that vary depending on the coverage you choose.
The most important thing to understand is this: Medicare is not one single plan. It's a system made up of different parts — and the decisions you make about those parts affect your coverage
and costs for years to come.
💡 Medicare is not automatic for everyone. Even if you're already receiving Social Security benefits, it's important to understand your enrollment options and deadlines. Missing a window can result in permanent penalties.
The Parts of Medicare — Explained Simply
Medicare is divided into four main parts. Each covers something different. Here's what you need to know about each one.
PART A: Medicare Part A — Hospital Insurance
WHAT IT COVERS:
Part A covers inpatient hospital stays, care in a skilled nursing facility following a hospital stay, hospice care, and some home health care services.
WHAT IT COSTS:
Most people pay $0 for Part A if they or their spouse worked and paid Medicare taxes for at least 10 years (40 quarters). If you don't qualify for premium-free Part A, you may pay up to $505 per month in 2024.
KEY POINT:
Part A does NOT cover everything that happens in a hospital. There are deductibles and coinsurance costs. That's why most people add additional coverage on top of Parts A and B.
PART B: Medicare Part B — Medical Insurance
WHAT IT COVERS:
Part B covers doctor visits, outpatient care, preventive services, lab tests, X-rays, durable medical equipment, and mental health services. Essentially — anything that doesn't require an overnight hospital stay.
WHAT IT COSTS:
The standard Part B premium in 2024 is $174.70 per month. Higher-income beneficiaries pay more through IRMAA (Income-Related Monthly Adjustment Amount). There is also an annual deductible of $240 and 20% coinsurance
after the deductible is met — with no out-of-pocket maximum under Original Medicare alone.
KEY POINT:
The 20% coinsurance under Part B has no cap. A serious illness could cost you tens of thousands of dollars. This is the primary reason most people add either a Medicare Supplement or Medicare Advantage plan.
PART C: Medicare Part C — Medicare Advantage
WHAT IT COVERS:
Medicare Advantage plans are offered by private insurance companies approved by Medicare. They bundle Part A and Part B coverage into one plan — and most include Part D prescription drug coverage as well.
HOW IT WORKS:
When you enroll in a Medicare Advantage plan, you still have Medicare — but your benefits are delivered through the private plan instead of Original Medicare. Most Advantage plans have a network of doctors and hospitals
you must use (HMO) or prefer (PPO).
WHAT IT COSTS:
Many Medicare Advantage plans have $0 monthly premiums beyond what you pay for Part B. However, you typically pay copays and coinsurance when you use services, up to an annual out-of-pocket maximum.
KEY POINT:
The $0 premium is appealing but doesn't tell the whole cost story. Networks, out-of-pocket maximums, and prior authorization requirements vary significantly between plans. Always compare total potential costs —
not just the monthly premium.
PART D: Medicare Part D — Prescription Drug Coverage
WHAT IT COVERS:
Part D covers prescription drugs. It is offered through private insurance companies approved by Medicare and can be added to Original Medicare as a standalone plan, or may be included in a Medicare Advantage plan.
WHAT IT COSTS:
Premiums, deductibles, and copays vary by plan. The specific drugs covered — and at what cost tier — are listed in each plan's formulary. The same drug can cost dramatically different amounts depending on which Part D plan you're enrolled in.
KEY POINT:
If you don't enroll in a Part D plan when you're first eligible and you don't have other creditable drug coverage, you'll pay a permanent late enrollment penalty added to your Part D premium for as long as you have Medicare.
MEDIGAP: Medicare Supplement — Medigap
WHAT IT IS:
Medicare Supplement insurance (also called Medigap) is private insurance that fills in the "gaps" left by Original Medicare — covering things like the Part B 20% coinsurance, deductibles, and excess charges.
HOW IT WORKS:
Medigap plans are federally standardized and labeled A through N. Plan G and Plan N are currently the most popular. You pay a monthly premium for your Medigap plan in addition to your Part B premium.
KEY POINT:
With a Medigap plan, you can typically see any doctor in the country who accepts Medicare — with no networks and very predictable out-of-pocket costs. This is the key difference from Medicare Advantage.
The Big Decision: Original Medicare vs. Medicare Advantage
Once you understand the parts, the most important decision most people face is this: do you want to stay with Original Medicare (Parts A and B) and add a Supplement and Part D — or do you want to replace your Medicare benefits with a Medicare Advantage plan (Part C)?
This is not a one-size-fits-all decision. The right choice depends on your health, your doctors, your prescriptions, your budget, and how much you travel. Here's a simple side-by-side comparison:
Original Medicare
+ Supplement + Part D
Medicare Advantage
(Part C)
-
Any doctor who accepts Medicare nationwide
-
Very predictable out-of-pocket costs
-
No referrals required
-
No prior authorization required
-
Excellent travel coverage
-
Higher monthly premium
-
Network of doctors (HMO/PPO)
-
Often $0 premium but copays apply
-
May require referrals (HMO)
-
May require prior authorization
-
Limited to network area
-
Has annual out-of-pocket maximum
Ready to Take the Next Step?
Understanding what Medicare is is just the beginning. The next step is understanding what your specific options look like in Houston — which plans are available, which cover your doctors, and which gives you the best value for your situation.
That's exactly what we cover in our free 45-minute workshops at your local public library. No sales pressure, no obligation — just clear, honest information from licensed independent advisors who work for you.