The type of Medicare coverage you choose determines more than how much your premium costs each month – your plan affects how much you spend out of pocket and receive services.

Let’s dive into the differences between and similarities of Medicare, Medicare Advantage, Medigap and Medicaid so you can make the best Medicare coverage decision for your needs and lifestyle.

Medicare Part A

This is hospital insurance, which generally covers medically necessary:

• Home health care 
• Hospice care
• Inpatient hospital stays and care
• Skilled nursing facility services

For Part A, you usually don’t pay a monthly premium if you or your spouse paid Medicare payroll taxes for an extended length of time – at least 10 years. However, some people will pay a monthly premium. Regardless of your monthly premium cost, everyone pays the same deductible, copays and coinsurances for health care services.

Medicare Part B

This is medical insurance. Though not a complete list, Part B generally covers medically necessary:

• Alcohol use counseling
• Chemotherapy
• Doctor visits
• Durable medical supplies and equipment
• Preventive care (i.e., screenings, vaccines, wellness visits)
• Outpatient care
• Outpatient mental health care
• Physical therapy
• Preventive care and screenings
• Vaccinations
• Wellness visits

Vaccines (e.g., influenza, pneumococcus)

Part B typically requires that you pay a standard premium each month.

Original Medicare

Original Medicare is another name for Medicare Parts A and B. This fee-for-service plan covers most – but not all – basic and medically necessary health care services and supplies. With Original Medicare, you will pay a deductible and 20% coinsurance anytime you receive Medicare-approved care.

Medicare Supplement Insurance

Also called Medigap, this is a supplemental plan option chosen alongside Original Medicare to help pay for additional out-of-pocket costs, including: 

• Deductibles
• Copays
• Coinsurance

Medigap plans are offered by Medicare-approved private health insurance companies and will have a monthly premium. Some Medigap plans also provide additional benefits not covered by Original Medicare, such as health care coverage for when you travel outside the U.S. These plans do not include prescription drug coverage.

Medicare Part C

Also called Medicare Advantage, these are plans through Medicare-approved private health insurance companies that administer the benefits of your Original Medicare. Even though you are receiving your benefits from a private health insurance company, you are still in the Medicare program, with Medicare rights and protections.

Not all Part C plans work the same, but many do have additional coverage options that are not provided through Original Medicare. This often includes chronic illness, dental, hearing and vision care, as well as drug coverage.

A benefit of Part C is that, unlike Original Medicare, there is an out-of-pocket maximum each year for covered services, protecting you from excessive annual health care costs.

With many Part C plans, you'll likely be required to use health care providers within the plan’s network, known as in-network providers. Some, but not all, Part C plans offer out-of-network coverage but for a higher out-of-pocket cost.

When shopping for Medicare Advantage plans, you may also see these acronyms for other MA plans: PPO, HMO and SNP. You can learn more about these plans at medicare.gov.

To learn more about Medicare Advantage plans from Sanford Health Plan, download our free guide.

Medicare Part D

This is prescription drug coverage through a Medicare-contracted private insurance company. It may help lower the cost you pay for your prescription medications. You will pay a monthly premium for Part D. Part D cannot be combined with Part C plans that provide prescription drug coverage. If you have both, you will be disenrolled from Part C and instead returned to Original Medicare with Part D coverage.

Many Part C plans include prescription coverage through Part D. If you already have Part D prescription coverage, it cannot be combined with Part C plans that also provide Part D prescription drug coverage. If you have both, you will be disenrolled from Part C and instead returned to Original Medicare with the addition of Part D coverage.

Medicaid

Medicaid is a state and federal program providing free or low-cost health care coverage to millions of people in the U.S. who meet eligibility requirements based on assets and income. If you are eligible, you can have both Medicare and Medicaid coverage. They will work together to cover and lower your health care costs. A dual special needs plan (D-SNP) may be a good option for you to review.

Download a free guide to Medicare Advantage plans from Align powered by Sanford Health Plan or contact a licensed agent at (888) 535-4831 (TTY: 711) Monday through Friday from 8 a.m. to 5 p.m. local time, excluding holidays, to learn more.

Sanford Health Plan and Sanford Health Plan of Minnesota have HMO and PPO plans with a Medicare contract. Sanford Health Plan D-SNPs have contracts with state Medicaid programs. Enrollment in our plans depends on contract renewal. Sanford Health Plan complies with applicable federal civil rights laws and does not discriminate on the basis of race, color, national origin, age, disability, sex, or any other classification protected under the law. This information is not a complete list of benefits. Limitations, copayments and restrictions may apply. Call (888) 605-9277 (TTY: 711) 8 a.m.–8 p.m. local time, Monday–Friday for more information.

CMS ID Number: H8385_444-507-691-PY2025-ND-SD-IA_M, H3186_444-507-691-PY2025-MN_M; H8967_444-507-691-PY2025-ND_M