What Medicare Actually Covers

And How to Choose the Right Plan Before December 7th

Every October, the Medicare commercials start flooding in. Mailers stack up on the kitchen counter. And for many people, it all blurs together into background noise and becomes something to deal with later.

Here's the problem with later: 2027 Medicare open enrollment only runs from October 15 to December 7, 2026. And for those already on Medicare who don't quite understand how their coverage works, or whether they need to make any changes, this is the moment to get clarity.

Let's break it down.

The Four Parts of Medicare

Medicare isn't a single plan. It's a system with four distinct parts, and understanding what each one covers is the foundation for making any good decision during open enrollment.

• Part A - Hospital Insurance. Medicare Part A covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health care. It has no premium cost if you've paid payroll taxes for at least 10 years.
• Part B - Medical Insurance. Medicare Part B covers outpatient care, doctor visits, preventive services, and some home health care. It does require a monthly premium.
• Part C - Medicare Advantage. A private insurance alternative that bundles Parts A and B, and usually D, into one plan.
• Part D - Prescription Drug Coverage. A Medicare Part D plan provides coverage for prescription drugs, which is not included in Original Medicare. These plans are sold by private insurance companies.

When people talk about "Original Medicare," they typically mean Parts A and B. Everything beyond that, including drug coverage, dental, and vision, requires supplemental coverage.

What You Can (and Can't) Change During Open Enrollment

During Medicare Open Enrollment, you can:

• Switch from Original Medicare to a Medicare Advantage plan, or vice versa
• Switch from one Medicare Advantage plan to another
• Join, switch, or drop a Medicare Part D prescription drug plan

What you cannot do during this period:

• Enroll in Medicare for the first time (that has its own Initial Enrollment Period)
• Purchase or switch a Medigap policy (which is a supplement to Original Medicare, more on this below) outside of your Medigap Open Enrollment Period. Insurers can deny coverage or charge higher premiums based on your health history.

Note that if you miss the Annual Enrollment Period and are currently in a Medicare Advantage plan, there's a secondary window: the Medicare Advantage Open Enrollment Period, which runs January 1 through March 31, allowing one switch per year.

Your Two Main Paths: Original Medicare or Medicare Advantage

At the center of any open enrollment decision is a fundamental choice: do you want to stay with Original Medicare, or do you want coverage through a Medicare Advantage plan?

These two systems work very differently, and the right answer depends on your health situation, how you use care, and what matters most to you.

Original Medicare gives you nationwide flexibility. You can visit any doctor, specialist, or hospital in the country that accepts Medicare. There's no referral requirement, minimal prior authorization, and a consistent structure that doesn't change year to year. The trade-off? Original Medicare has no annual cap on what you pay out of pocket. Most people pair it with a Medigap (Medicare Supplement) policy, plus a standalone Part D plan for prescriptions.

Medicare Advantage takes a different approach entirely, and it's become the most popular way to receive Medicare benefits.

Medicare Advantage (Part C): What It Is and How It Works

Medicare Advantage is a private insurance alternative to Original Medicare that bundles Part A, Part B, and usually Part D drug coverage into one plan, often with extra benefits like dental, vision, and hearing. In 2026, more than 33 million Americans are enrolled in a Medicare Advantage plan.

When you enroll, you don't lose your Medicare benefits. Instead, you receive the same core coverage as Original Medicare, but it's delivered through a private insurer instead of the government directly.

One of the reasons Medicare Advantage has grown so popular is the manageable cost. Many plans carry $0 monthly premiums and $0 medical deductibles, though you still owe your Part B premium. The most financially significant feature may be the out-of-pocket maximum. Unlike Original Medicare, which has no annual cap, Medicare Advantage plans are required to include an annual out-of-pocket ceiling intended to keep costs manageable for retirees.

The potential downside to Medicare Advantage? Dealing with provider networks. Unlike Original Medicare, which is accepted by virtually every doctor and specialist who participates in Medicare, Medicare Advantage plans operate within provider networks. Many also require prior authorization for certain procedures, tests, and specialist referrals. Original Medicare has far fewer prior authorization requirements.

Types of Medicare Advantage Plans

Not all Medicare Advantage plans are the same. The most common types are:

• HMO (Health Maintenance Organization). HMO plans feature a network of participating providers. You typically select a primary care physician who coordinates your care and makes referrals to specialists. Coverage is generally limited to the HMO network.
• PPO (Preferred Provider Organization). A Medicare PPO plan offers more flexibility to see out-of-network providers at a higher cost, and no referral is required.
• SNP (Special Needs Plan). Designed for people with a specific health condition, those who are dual-eligible for Medicare and Medicaid, or those who reside in institutional facilities.

One Thing Most People Miss: Medicare Advantage Plans Change

Medicare Advantage plans can change their benefits, premiums, deductibles, formularies, and provider networks every single year. Every September, your plan mails an Annual Notice of Change (ANOC) letter detailing what's different for the coming year. Most people don't read it, and that's a costly habit. A drug that was covered this year may not be covered next year. A specialist you rely on may no longer be in-network.

How Medicare Advantage Plans Are Rated: The Star System

When comparing Medicare Advantage plans, the CMS Star Rating is a useful starting point. CMS rates every Medicare Advantage plan annually on a 1-to-5-star scale based on quality of care, health outcomes, member satisfaction, and plan performance.

Star ratings are available on Medicare's free Plan Finder tool at medicare.gov, and comparing plans side by side with your actual drug list and preferred providers takes less time than most people expect.

Before December 7th: Your Open Enrollment Checklist

1. Read your Annual Notice of Change (ANOC). This arrived in September and outlines every change to your plan for 2027, including premiums, drug lists, and provider networks. Don't skip it.
2. Verify your prescriptions are still covered. A medication covered this year is not guaranteed next year. Also check whether your doctors remain in-network.
3. Use Medicare's Plan Finder tool at medicare.gov. It's free, updated for 2027 plans, and lets you enter your medications to compare true out-of-pocket costs across plans, not just premiums.
4. Confirm your doctors are still in-network. Networks shift annually, and an out-of-network specialist is a real cost exposure.

The Bottom Line

Medicare isn't so complicated once you understand the structure. You have two main paths, Original Medicare with supplemental coverage (Medigap), or Medicare Advantage, and open enrollment is the one window each year where you can move between them or simply make sure what you have still fits.

Reviewing your ANOC letter, checking your true costs, confirming your doctors and prescriptions, and watching the December 7 deadline are the core steps that keep you from costly surprises heading into 2027.

If you have questions about how your coverage fits into your broader financial picture, this is a conversation worth having before the window closes.

Let's Connect → hello@hylafinancial.com

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