You Might Think You Know the Basics of Medicare—But Here’s What You’re Still Missing

Key Takeaways

• Even if you’re familiar with Medicare Parts A, B, C, and D, many essential details—including cost-sharing rules, late enrollment penalties, and supplemental options—are often overlooked.

• Understanding how Medicare works in 2025, especially with recent changes to Part D, Advantage plans, and out-of-pocket limits, is critical to making the best decisions for your health and finances.

Medicare Basics Only Scratch the Surface

You might feel confident about what Medicare covers, when to enroll, and how much it costs. But many Medicare beneficiaries are surprised by what they learn too late—especially when they encounter out-of-pocket charges, limited networks, or missed enrollment periods. If you think you already know the essentials, here’s what you might still be missing.

1. Original Medicare Doesn’t Cover Everything

Original Medicare (Parts A and B) lays the foundation for your coverage. But in 2025, it still excludes many services that people commonly expect to be covered:

• Routine dental, vision, and hearing care are not included.

• Prescription drugs are not covered under Parts A or B—you need separate Part D coverage for that.

• Long-term custodial care, such as nursing home stays for daily living assistance, is not part of Medicare.

Understanding these gaps early can help you prepare to fill them—whether through separate coverage or personal budgeting.

2. Late Enrollment Penalties Don’t Go Away

If you delay enrolling in Medicare when you’re first eligible and don’t qualify for a Special Enrollment Period, penalties can stick with you for life:

• Part B late enrollment results in a 10% premium increase for each 12-month period you were eligible but didn’t enroll.

• Part D penalties are calculated based on the number of months you went without creditable prescription coverage.

These penalties are permanent and can significantly raise your monthly costs year after year. That’s why understanding your Initial Enrollment Period (IEP) is essential—it starts 3 months before your 65th birthday, includes your birth month, and extends 3 months after.

3. Part C (Medicare Advantage) Isn’t Just a Simple Replacement

Many assume that Medicare Advantage plans (Part C) are just a bundled, convenient version of Original Medicare. But in 2025, Advantage plans come with both advantages and potential trade-offs:

• You still must enroll in both Parts A and B to join an Advantage plan.

• Networks are limited; you often must use providers within the plan.

• Referrals and prior authorizations may be required for many services.

• Out-of-pocket maximums exist, but costs can vary widely by plan.

While some plans offer additional benefits like dental or vision, they also limit your flexibility to seek care out-of-network.

4. Medicare Part D Has Changed Significantly in 2025

This year brings a major change to how prescription drug coverage works under Medicare Part D:

• The out-of-pocket cap is now $2,000 annually, eliminating the previous coverage gap (“donut hole”).

• After reaching this limit, you won’t pay anything more for covered medications during the year.

• A monthly payment option is available through the new Medicare Prescription Payment Plan, letting you spread costs evenly over the year instead of paying large sums all at once.

This offers meaningful financial relief, but you still need to review your plan each year to ensure it covers your medications affordably.

5. Medicare Supplement Plans Work Differently Than Advantage Plans

Many people confuse Medigap (Medicare Supplement) plans with Medicare Advantage. But in reality, they serve very different purposes:

• Medigap plans supplement Original Medicare and help cover things like copayments, coinsurance, and deductibles.

• You can’t use a Medigap plan with a Medicare Advantage plan—it’s one or the other.

• Medigap plans usually don’t include drug coverage; you need a separate Part D plan.

And in most states, once you’re beyond your Medigap open enrollment window—6 months starting the month you’re 65 or older and enrolled in Part B—you could be subject to medical underwriting. That means you could be denied coverage or charged more based on health status.

6. Out-of-Pocket Costs Still Add Up

Even with Medicare, you’re still responsible for cost-sharing:

• Part A: In 2025, the inpatient hospital deductible is $1,676 per benefit period. Daily coinsurance applies after 60 days.

• Part B: The monthly premium is $185, and the deductible is $257. After the deductible, you generally pay 20% of Medicare-approved services.

• Part D: You may pay premiums, copayments, and up to $2,000 out of pocket for the year.

Costs can climb quickly if you need frequent hospital care, outpatient procedures, or prescription medications. Choosing supplemental coverage or budgeting for health care is essential.

7. Not All Services Are Covered at All Locations

Medicare coverage isn’t always portable the way you might assume:

• Original Medicare is accepted nationwide, but some Advantage plans have local networks and limited service areas.

• If you travel seasonally or live in multiple states, make sure your plan will cover you wherever you go.

• Emergency coverage is generally available, but routine or specialist care may not be unless you’re in-network.

Portability can be especially important if you move, split time between homes, or travel regularly.

8. Preventive Services Are Free—but Only If Conditions Are Met

Medicare offers a long list of preventive services at no cost to you, including screenings and vaccines. But many of these benefits come with eligibility conditions:

• Screenings may be free only once every few years, depending on your risk profile.

• You must use providers who accept Medicare assignment to avoid unexpected charges.

• Some follow-up care or diagnostic services after a screening could result in copays.

It’s important to ask your provider in advance whether a preventive service will trigger additional charges.

9. Coordination with Employer Coverage Can Be Complex

If you’re still working past 65 or covered under a spouse’s plan, the coordination between employer insurance and Medicare depends on employer size:

• If the employer has 20 or more employees, that insurance usually pays first, and Medicare is secondary.

• If the employer has fewer than 20 employees, Medicare generally pays first.

Failing to enroll in Medicare Part B when it becomes primary can result in penalties and coverage gaps. Timing is everything.

10. Annual Changes Require Active Review

Medicare is not a one-and-done enrollment. Every fall, during the Annual Enrollment Period (October 15 to December 7), plans can—and often do—change:

• Premiums, deductibles, and copays may go up.

• Drug formularies might drop medications you take.

• Provider networks can shrink or shift.

If you’re not reviewing your coverage each year, you risk higher costs or reduced benefits without realizing it. Active comparison is essential.

Stay Proactive About Medicare in 2025

Even if you feel confident about your Medicare choices, the truth is that many details can affect your health and finances more than you realize. From how Advantage plans restrict networks to how Part D’s new out-of-pocket limit helps—or doesn’t—every piece of information matters.

Now more than ever, staying informed is key. Medicare is changing, and so should your understanding. If you’re uncertain or just want a second opinion on your coverage choices, it’s worth speaking to a licensed agent listed on this website who can guide you based on your unique needs.