Medicare Parts A–D, Original vs Advantage, the lettered Medigap plans, and long-term care insurance end to end.
Before you read — prime your brain
Take a shot at these. Being wrong here is the point — it primes you for the answers, which are all in this lesson.
After the annual deductible, Medicare Part B pays what portion of approved charges?
Noted — the answer comes up in this lesson.
To enroll in a Medicare Advantage plan, an individual must
Noted — the answer comes up in this lesson.
A Medigap policy may be sold to
Noted — the answer comes up in this lesson.
Primed. Read on — then finish the lesson to see how you did.
The senior chapter is dense but formulaic: Medicare is a machine of numbers (benefit periods, reserve days, enrollment windows, penalties), Medigap is a lettered menu built on core benefits, and LTC turns on two triggers and three levels of care. Watch the vocabulary trap that runs through everything — government PARTS versus private PLANS — and learn each program by what it deliberately does NOT cover.
Medicare: Structure, Eligibility & Enrollment
[2]–[2.4]
Medicare (CMS, 1965) has four parts: A hospital, B medical, C Advantage, D drugs. Original vs Advantage is the framing contrast: any-provider/no-cap/no-drugs vs networked/capped/bundled. Eligibility: 65+ with 40 credits (premium-free Part A) — or earlier via 24 months of SSDI, instantly with ALS, or ESRD after 3 months of dialysis. Enrollment: the 7-month initial window, the Jan–Mar general period with its 10%-per-year lifetime Part B penalty, and the penalty-free 8-month special period for those leaving 20+ employee group plans.
The enrollment numbers ARE the exam: 7-month IEP · 10% lifetime penalty · 8-month SEP · Oct 15–Dec 7 annual switch window.
Check yourself
Which part of Medicare provides hospital insurance?
How sure are you?
A = hospital · B = medical/outpatient · C = Medicare Advantage · D = drugs.
Check yourself
Which concept does this describe? Original (A+B): federal fee-for-service, any provider nationwide, no referrals, NO out-of-pocket maximum, no drugs (buy Part D), pairs with Medigap. Advantage (C): private networked plans (HMO/PPO), annual out-of-pocket cap, usually includes drugs + extras (dental/vision/hearing), limited service area — and cannot be combined with Medigap.
Part A is premium-free for the fully insured and runs on benefit periods (admission → 60 days post-discharge). Each period: deductible, 90 hospital days (61–90 with daily coinsurance), then the 60 never-restored lifetime reserve days. The skilled nursing benefit needs a 3-day prior hospital stay: 100 days, first 20 free. Hospice (6-month prognosis), home health, and 190 lifetime psychiatric days round it out. Not covered: physicians' fees (Part B), private-duty nursing, personal conveniences, custodial care, and the first 3 pints of blood.
Per-claim benefit periods — not calendar years — are Part A's signature. And reserve days never come back.
Check yourself
A Medicare beneficiary is readmitted to the hospital 45 days after discharge. Which is TRUE?
How sure are you?
A benefit period ends only 60 days after discharge. Within 60 days = same period, same deductible; after = new period, new deductible, fresh 90 days.
Check yourself
Medicare Part A lifetime reserve days
How sure are you?
The 60 reserve days are once-per-lifetime — unlike the 90 basic days, which reset each benefit period.
Part B: monthly premium, annual deductible, then 80/20 with no out-of-pocket cap — covering physicians (even inpatient surgeons), outpatient care, DME, therapy, 100% preventive and clinical lab. Excluded: dental, vision, hearing, outpatient drugs, custodial care, routine exams. Participating providers accept assignment (approved fee = full payment); nonparticipating ones may bill 15% over. Claims flow through MACs; the quarterly Medicare Summary Notice is not a bill, and appeals get 120 days.
Surgeon's fee during a hospital stay = Part B. The building = Part A. Sort every service by who sends the bill.
Check yourself
After the annual deductible, Medicare Part B pays what portion of approved charges?
How sure are you?
80/20 — and unlike modern major medical, Part B has NO annual out-of-pocket maximum. (That's a core reason Medigap exists.)
Check yourself
A doctor who accepts Medicare assignment agrees to
How sure are you?
Accepting assignment = Medicare's fee is payment in full, paid directly — balance billing prohibited. NONparticipating providers may add up to 15%.
Medicare Advantage requires A + B enrollment (B premium continues), comes as HMO / PPO / PFFS / SNP, caps out-of-pocket costs, and usually bundles drugs and extras — but locks you to a service area and can never coexist with Medigap. Part D drug plans run on formularies (2+ drugs per class, all six protected classes, four tiers), charge a 1%-per-month lifetime penalty for gaps in creditable coverage, and flip to 100% catastrophic coverage past the out-of-pocket cap.
Joining MA cancels stand-alone Part D; buying Part D cancels MA. The programs are exclusive by design.
Check yourself
A senior goes 20 months without creditable prescription drug coverage before joining Part D. Her penalty is
How sure are you?
1% per month, permanently — here a 20% lifetime surcharge (computed on the national base premium, not her plan's premium). Keep creditable drug coverage to stop the clock.
Check yourself
To enroll in a Medicare Advantage plan, an individual must
How sure are you?
MA requires both A and B (and continued B premiums) plus residence in the service area. Medigap can NEVER be sold alongside it.
Medigap fills Original Medicare's cost-sharing gaps — one policy per person, no networks, no ancillary benefits. Open enrollment = six guaranteed-issue months from being 65 AND in Part B (6-month pre-ex allowed). Plan A's core benefits live in every plan: days 61–90 + reserve coinsurance, an extra 365 hospital days, the Part B 20%, three pints of blood, hospice coinsurance. The lettered menu adds deductibles and extras (C/F closed to newly eligibles since 2020 → D/G; K/L partial-pay; 65/75% loss ratios; issue-age/attained-age/community rating). Medicare SELECT discounts premiums for a network, and marketing rules ban duplication, high pressure, cold leads, and twisting.
PLANS are private Medigap letters; PARTS are the government program. And the Part B deductible can no longer be sold to the newly eligible.
Check yourself
Which benefit is part of the Medigap CORE benefits found in every plan?
How sure are you?
Core = Part A coinsurance + 365 extra hospital days + Part B 20% coinsurance + 3 pints of blood + hospice coinsurance. The deductibles are add-ons — and Part B's deductible is closed to newly eligible members (Plans C/F grandfathered).
Check yourself
Which Medigap plans pay only 50% or 75% of most cost-sharing until an annual out-of-pocket limit is reached?
How sure are you?
K (50%) and L (75%) share costs until their out-of-pocket cap, then pay 100% — trading coverage for lower premiums.
LTC insurance covers ≥12 months of chronic care outside hospitals across three levels — skilled, intermediate, custodial — in settings from nursing homes to adult day care (formal, paid care only). Benefits trigger on 2 of the 6 ADLs or cognitive impairment, and pay per day (indemnity or reimbursement) from a pool of money that stretches when care is cheap. Provisions include waiver of premium, third-party lapse notice, and mandatory nonforfeiture offers; inflation riders compound ~5%. Tax-qualified policies (2-of-6/cognitive, 90-day diagnosis, no cash value) earn deductible premiums and tax-free benefits. Regulation: no prior-hospitalization requirements, no post-claims underwriting, Medicaid's 5-year look-back, and asset-sheltering Partnership programs. Hybrids bolt LTC onto life insurance or annuities so somebody always collects.
Memorize B-D-T-T-C-E and '2 of 6 or cognitive.' Walking is not an ADL, custodial care is what Medicare won't touch, and hospital stays can never be a prerequisite.
Check yourself
Which concept does this describe? Accelerated death benefit rider: lump-sum share of a life policy's death benefit on terminal diagnosis (NOT LTC insurance under the NAIC model; payouts reduce the death benefit). LTC rider: monthly benefit carved from the face amount, same ADL/cognitive triggers. Hybrid (linked/asset-based): whole life or annuity + LTC — use it for care, or the unused value pays out as income/death benefit.
How sure are you?
Check yourself
Which concept does this describe? Covers medical + personal services for people needing help with the activities of daily living due to chronic (not acute) conditions — at least 12 consecutive months of care in a setting other than a hospital. Sold as stand-alone policies, life riders, or hybrid contracts. Medicare and Medigap barely touch this risk.
Close your eyes for a moment, then write everything you remember from this chapter — rules, numbers, traps. Recalling first is worth more than rereading.
Recall captured. Compare it against the summary below.
Memorize B-D-T-T-C-E and '2 of 6 or cognitive.' Walking is not an ADL, custodial care is what Medicare won't touch, and hospital stays can never be a prerequisite.
Lesson completion
Lesson complete — every check passed from memory. Your pretest answers above are now revealed.