Medicare can seem complicated when you first encounter Parts A, B, C and D, Medicare Advantage, Medicare Supplement insurance and prescription drug coverage.

This Medicare 101 guide for Minnesota explains how the major pieces fit together so you can better understand your choices before comparing individual plans.

At YourMedicareMN, our approach is simple:

Learn First. Decide With Confidence.

What Is Medicare?

Medicare is a federal health insurance program primarily for people age 65 and older. Some people under 65 may also qualify because of a disability, End-Stage Renal Disease (ESRD), or ALS (Lou Gehrig’s disease).

Medicare is divided into different parts that cover different types of health care.

Understanding those parts is the first step.

What Are the Four Parts of Medicare?

Medicare Part A — Hospital Insurance

Medicare Part A is primarily hospital insurance.

Part A helps cover Medicare-approved services including:

Inpatient hospital care
Skilled nursing facility care when Medicare requirements are met
Hospice care
Certain home health care services

Most people qualify for premium-free Part A because they or their spouse worked and paid Medicare taxes long enough.

Part A doesn’t necessarily pay the entire cost of covered care. Deductibles, coinsurance and other cost sharing can apply.

Medicare Part B — Medical Insurance

Medicare Part B is medical insurance.

Part B helps cover Medicare-approved services including:

Doctors and other health care providers
Outpatient care
Preventive services
Diagnostic testing
Durable medical equipment
Certain home health services

Most people pay a monthly premium for Part B.

For many Part B-covered services under Original Medicare, you generally pay 20% of the Medicare-approved amount after meeting the annual Part B deductible.

Part A and Part B together are known as Original Medicare.

Medicare Part C — Medicare Advantage

Medicare Advantage, also called Medicare Part C, is another way to receive your Medicare Part A and Part B benefits.

Medicare Advantage plans are offered by private insurance companies approved by Medicare.

To join a Medicare Advantage plan, you must have Medicare Part A and Part B. You continue paying your Medicare Part B premium while enrolled in Medicare Advantage.

Medicare Advantage plans must cover almost all medically necessary services covered by Original Medicare.

Most Medicare Advantage plans also include Medicare Part D prescription drug coverage.

Depending on the individual plan, Medicare Advantage may also provide additional benefits that Original Medicare doesn’t cover.

Medicare Advantage plans can have:

Provider networks
Copayments and coinsurance
Deductibles
Prior authorization requirements
Different rules for receiving services
An annual maximum out-of-pocket limit for covered Part A and Part B services

Premiums, benefits, networks, formularies and cost sharing vary by plan and service area.

Medicare Part D — Prescription Drug Coverage

Medicare Part D helps cover outpatient prescription drugs.

Part D coverage is provided by private insurance companies that contract with Medicare.

You can generally receive Medicare prescription drug coverage in one of two ways:

A standalone Medicare Part D plan used with Original Medicare or certain other eligible types of Medicare coverage; or
A Medicare Advantage plan that includes Part D prescription drug coverage.

Each Part D plan has its own list of covered drugs, called a formulary, as well as its own cost-sharing structure and pharmacy arrangements.

Prescription drug coverage should be evaluated based on the medications you actually take, not simply the plan’s premium.

Original Medicare vs. Medicare Advantage

After you have Medicare Part A and Part B, there are two main ways to receive your Medicare health coverage:

Option 1: Original Medicare

Original Medicare consists of:

Medicare Part A + Medicare Part B

With Original Medicare:

You can generally use any doctor or hospital in the United States that accepts Medicare.
You can add a standalone Part D plan for prescription drug coverage.
You may purchase Medicare Supplement insurance to help with certain out-of-pocket costs.
Original Medicare itself does not have an annual maximum out-of-pocket limit for Part A and Part B services.

You remain enrolled directly in the federal Medicare program for your Part A and Part B coverage.

Option 2: Medicare Advantage

Medicare Advantage is an alternative way to receive your Medicare Part A and Part B benefits through a Medicare-approved private insurance company.

With Medicare Advantage:

You remain enrolled in Medicare Part A and Part B.
The Medicare Advantage plan administers your covered Part A and Part B benefits.
Most plans include Part D prescription drug coverage.
Many plans use provider networks.
Some services may require prior authorization.
Copayments and coinsurance vary by plan.
Plans have an annual maximum out-of-pocket limit for covered Part A and Part B services.
Plans may offer additional benefits that Original Medicare doesn’t cover.

Medicare Advantage plans vary by plan and service area, so the plans available to one Minnesota resident may not be the same as those available to someone living elsewhere in Minnesota.

What Is Medicare Supplement Insurance?

Medicare Supplement insurance—often called Medigap—is private insurance designed to work with Original Medicare.

A Medicare Supplement policy can help pay some of the deductibles, copayments and coinsurance that Original Medicare doesn’t pay.

You must have Medicare Part A and Part B to purchase a Medicare Supplement policy.

Medicare Supplement insurance is not Medicare Advantage.

A Medicare Supplement policy works alongside Original Medicare rather than replacing the way you receive your Original Medicare benefits.

Medicare Supplement Insurance Is Different in Minnesota

This is especially important for Minnesota residents.

Many national Medicare websites describe Medicare Supplement coverage using standardized letter plans such as Plan G.

Minnesota standardizes Medicare Supplement insurance differently from most states.

Minnesota insurers that sell Medicare Supplement coverage are required to offer:

Basic
Basic with Optional Rider(s)
Extended Basic

Some Minnesota insurers may also offer other approved Medicare Supplement options, including certain copayment, high-deductible and percentage-coverage policies.

The benefits, premiums and out-of-pocket costs depend on the Minnesota policy you select.

Because Minnesota’s Medicare Supplement structure differs from most states, Minnesota residents should use Minnesota-specific information when comparing Medicare Supplement coverage.

Minnesota Medicare Supplement Enrollment Rights

There are both federal and Minnesota-specific rules affecting when you can purchase Medicare Supplement insurance.

A federal Medigap Open Enrollment Period generally begins when you are age 65 or older and enrolled in Medicare Part B and lasts six months.

During that initial period, important guaranteed-issue protections apply.

Minnesota law also provides additional Medicare Supplement protections and enrollment opportunities.

Effective August 1, 2026, Minnesota law includes an annual Medicare Supplement open-enrollment opportunity tied to specified Medicare enrollment periods. This provides qualifying Medicare beneficiaries an opportunity to purchase marketed Medicare Supplement coverage or switch Medicare Supplement coverage without medical underwriting, subject to Minnesota law and applicable requirements.

Because Medicare Supplement rights can depend on your age, existing coverage, Medicare enrollment history and timing, Minnesota-specific rules should be reviewed before changing or dropping existing Medicare Supplement coverage.

Medicare Supplement and Medicare Advantage Are Not the Same Thing

This distinction is important.

Medicare Supplement works with Original Medicare.

Medicare Advantage is an alternative way of receiving your Medicare Part A and Part B benefits.

You don’t use a Medicare Supplement policy to pay the normal cost sharing of a Medicare Advantage plan.

When comparing the two approaches, consider more than premiums.

Important considerations can include:

Doctors and hospitals
Prescription medications
Provider networks
Travel
Premiums
Deductibles
Copayments and coinsurance
Maximum out-of-pocket exposure
Prior authorization
Supplemental coverage
Your preferences for how you receive care

There is no single Medicare coverage approach that is best for everyone.

Does Original Medicare Cover Prescription Drugs?

Original Medicare Part A and Part B do not provide comprehensive outpatient prescription drug coverage.

Some drugs are covered by Part A or Part B under specific circumstances, but beneficiaries who want Medicare coverage for typical outpatient prescriptions generally obtain Part D coverage.

If you use Original Medicare, you can generally add a standalone Part D plan.

Most Medicare Advantage plans include Part D coverage.

Do You Have to Enroll in Part D?

Medicare prescription drug coverage is optional, but delaying coverage can have financial consequences.

If you go 63 consecutive days or more without Medicare drug coverage or other creditable prescription drug coverage after the applicable enrollment period, you may have to pay a Part D late-enrollment penalty if you enroll later.

The penalty can continue for as long as you have Medicare drug coverage.

If you have prescription coverage through an employer, union or another source, determine whether it is considered creditable prescription drug coverage before deciding to delay Part D.

Keep any creditable-coverage notices you receive.

What Does Medicare Cost?

Medicare isn’t free.

Depending on your coverage, Medicare costs can include:

Monthly premiums
Deductibles
Copayments
Coinsurance
Prescription drug costs
Medicare Supplement premiums
Medicare Advantage plan premiums, when applicable

Most people don’t pay a monthly premium for Part A because they or their spouse paid Medicare taxes long enough.

Most people do pay a monthly Part B premium.

Higher-income beneficiaries may pay an Income-Related Monthly Adjustment Amount (IRMAA) in addition to their regular Part B and/or Part D premiums.

Medicare premiums, deductibles and other cost-sharing amounts can change from year to year.

For that reason, check current Medicare amounts rather than relying on figures from a previous year.

Does Original Medicare Have a Maximum Out-of-Pocket Limit?

No.

Original Medicare by itself does not have an annual maximum out-of-pocket limit for covered Part A and Part B services.

This is one reason some Original Medicare beneficiaries choose supplemental coverage, such as Medicare Supplement insurance.

Medicare Advantage works differently.

Medicare Advantage plans must have an annual maximum out-of-pocket limit for covered Part A and Part B services. The specific limit can vary by plan within Medicare requirements.

Once you reach your plan’s applicable maximum out-of-pocket amount, the plan pays 100% of covered Part A and Part B health services for the remainder of the year, subject to the plan’s terms and Medicare rules.

What Does Medicare Generally Not Cover?

Original Medicare doesn’t cover every health-related service.

Examples of services Original Medicare generally doesn’t cover include:

Most routine dental care
Routine eye exams for prescription glasses
Hearing aids and exams for fitting them
Most long-term custodial care
Routine physical examinations

There are exceptions and specific circumstances in which Medicare may cover related services, so coverage should be checked for the particular service you need.

Some Medicare Advantage plans may offer additional benefits for services that Original Medicare doesn’t cover. Benefits vary by plan.

How Do You Decide Which Medicare Approach Is Right for You?

Before comparing individual plans, start with your own needs.

Consider:

Your doctors

Do you want to continue seeing particular doctors or specialists?

Your hospitals and health systems

Are there specific Minnesota hospitals or health systems you prefer?

Your prescriptions

Which medications do you take, and how does each coverage option handle them?

Your travel

Do you frequently travel or spend part of the year outside Minnesota?

Your budget

Consider both monthly premiums and potential out-of-pocket costs when you receive care.

Provider networks

Are you comfortable using a plan’s network, or do you prefer the broader provider access available through Original Medicare?

Your existing coverage

Employer, retiree, union, VA, TRICARE or other health coverage can affect Medicare decisions.

Your circumstances—not someone else’s plan choice—should drive your Medicare decision.

Medicare Coverage Can Change From Year to Year

Medicare Advantage and Part D plans can change each year.

Changes can include:

Premiums
Deductibles
Copayments and coinsurance
Provider networks
Pharmacy networks
Drug formularies
Prior authorization requirements
Additional benefits

If you have Medicare Advantage or Part D, review the plan’s Annual Notice of Change (ANOC) each year.

Don’t assume that a plan that works well for you today will necessarily remain the best fit in a future year.

Next Steps

Compare Plans in Minnesota: Options vary by county

Review Your Needs: Consider prescriptions, preferred providers, travel, and extra benefits
Get Personalized Guidance: A Medicare advisor can help you make sense of the choices

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Medicare Guidance for Minnesotans

At YourMedicareMN, our focus is education first.

We help Minnesota Medicare beneficiaries understand how Medicare works, what their options mean and what questions to ask before making a Medicare decision.

Visit Contact Us to schedule a personalized Medicare review and get answers tailored to your situation.

For official Medicare information, visit the Medicare.gov website.

YourMedicareMN is not connected with or endorsed by the U.S. government or the federal Medicare program. Plan availability and benefits vary by location and plan. Contact the plan or Medicare for complete plan information.

Learn first. Decide With Confidence.