A Guide to Coverage, Costs, and the Clinical Experience

Medicare is the federal health insurance program primarily for Americans age 65 and older, as well as certain younger individuals with disabilities. Whether you have recently enrolled, are helping a spouse or aging parent navigate their coverage, or are simply trying to better understand how the program works, this article is for you. We will walk through the key components of Medicare — including how billing works, supplemental insurance options, prescription drug coverage, income-related premium adjustments (IRMAA), and what to expect from your clinical experience. 

What are the “Parts” of Medicare? 

Before we dive into the details, it is important to understand the “Parts” of Medicare that comprise health insurance for so many. 

Traditional or Original Medicare “Parts” include: 

• Medicare Part A – hospital insurance 

• Medicare Part B – medical insurance 

• Medicare Part D – prescription drug insurance (discussed below) 

Medicare Part C, also referred to as Medicare Advantage, is an alternative to Traditional/Original Medicare that provides the same benefits as Parts A and B under a managed care type of plan, and may also cover Part D prescription coverage. 

Part D — Prescription Drug Coverage 

Many people are surprised to learn that Medicare Part D prescription drug coverage is a separate plan that you must actively choose and enroll in. If you go without creditable drug coverage when first eligible and enroll later, you may face a late enrollment penalty added to your premium — and it stays with you permanently. 

Prescription drug plan options, formularies (the list of drugs covered under the plan), and costs vary, so comparing plans based on your specific medications each year is time well spent. A good place to begin your research is Medicare.gov. 

And some good news for 2026: out-of-pocket prescription drug costs are now capped at $2,000 per year — a meaningful protection for anyone managing ongoing or high-cost medications. 

Medicare Premiums and IRMAA (Income Related Monthly Adjustment Amount) 

If you are enrolled in Medicare, you know there is a premium for Part B. What you may not know is that higher-income enrollees may pay higher premiums, depending on which tier their Modified Adjusted Gross Income (MAGI) falls into — and here’s the part that surprises many people — the MAGI tier is based on your tax return filed two years prior. That’s right; they go back two years to determine your current year’s premium. 

If you fall into a higher tier, you will receive a notice from Social Security called an Initial IRMAA Determination Notice. And, once you are collecting Social Security, the annual letter confirming your monthly benefit will also include your IRMAA tier, if applicable. Social Security will automatically adjust your premium as your MAGI changes — so what you pay one year may not be what you pay the next year. If you experience a qualifying life-change event (such as retirement, marriage, or divorce, to name a few), filing Form SSA-44 to report a change in circumstance may help to reduce your IRMAA. 

What Is Supplemental Insurance? 

Supplemental insurance (also referred to as Medigap) is private insurance designed to cover out-of-pocket costs not paid by Original Medicare (Parts A & B), such as deductibles, coinsurance, and copayments. This private coverage helps limit your financial liability for medical services, offering peace of mind by covering most or all of the 20% coinsurance Medicare typically doesn’t pay. 

Medigap policies are standardized and designated by a letter (Plans A–D, F, G, and K–N). Policies with the same plan letter offer identical coverage by law, regardless of which insurer you choose. For instance, all Plan G policies offer the same benefits. As a result, the decision of which insurance company to work with is typically based on cost and customer service. Take the time to do your research and/or speak with a Medicare insurance agent to find the plan that best fits your situation. 

Here’s something many new enrollees are surprised to learn: Original Medicare has no out-of-pocket maximum. Without a Medigap plan, your cost exposure is unlimited — and that’s exactly why purchasing supplemental coverage is so important. 

Provider Acceptance 

This fact catches people off guard: Not all providers accept Medicare, and some who do accept it may not accept a Medicare assignment — meaning the provider can charge more than the Medicare-approved amount, which can translate to higher costs for you. Before scheduling an appointment, it’s worth a call to the provider to confirm that your physician and/or specialist not only accepts Medicare, but also “accepts an assignment” and agrees to limit billing to the Medicare-approved amount. The Medicare website (medicare.gov) has a helpful provider search tool if you need it. 

How Does Medicare and Supplemental Insurance Billing Work? 

As you may know, Medicare has deductibles just like most other health insurance plans. For 2026, the Original Medicare Part A inpatient hospital deductible is $1,736, and the Original Medicare Part B deductible is $283. The deductibles change annually, so it’s worth checking the amount each year. 

Medicare billing can be slow! Fortunately, the Medicare website is quite good and provides claim information so you can easily track claim status. Your supplemental insurer’s website does the same. Keep in mind that claims are first sent to Medicare for processing and then forwarded to the supplemental insurer for a second round of processing. It can take a few weeks for the supplemental insurer to process a claim, so don’t be alarmed if there’s a lag. Once the insurer processes the claim, a bill may follow if there is an outstanding deductible or balance. 

The Clinical Experience 

Medicare requires an Annual Wellness Visit (AWV) with a primary care provider (PCP) to create or update a personalized prevention plan. Think of it less as a traditional checkup and more as a conversation about where you are and where you want to be. It is not a physical exam, but rather a screening for health risks and cognitive impairment, along with a review of your medical history and medications. Your provider may include your physical exam in the same visit or schedule it separately. 

During or prior to the wellness visit, a questionnaire is provided to assess your home safety, mental well-being, food insecurity, and more. Additionally, your provider may ask you to remember three words or draw a clock showing a specific time. It’s more straightforward than it sounds — and it’s all in your best interest. 

Beyond the AWV, Medicare covers a broad range of preventive screenings at no cost to you, including mammograms, colonoscopies, bone density scans, cardiovascular screenings, and more. These services are available, but they are not automatic — you will generally need to request them. Make it a habit to check in with your provider at each visit about which screenings may be due based on your age and health history. Being proactive can make a real difference. 

Annual Enrollment Period 

Even after making thoughtful initial choices, your needs — and the plans available to you — will change over time. Each year during the Annual Enrollment Period (from October 15 through December 7), be sure to review and potentially adjust your Medicare coverage. During this period, you can switch, join, or drop a Part D prescription plan or Medicare Advantage plan. Changes take effect on January 1. 

Put it on your calendar and treat it like the annual financial check-in it is. A little time spent during this window can save you money and ensure your coverage still fits your life. 

Note: The Medicare Advantage Open Enrollment Period runs from January 1 through March 31 and allows those already enrolled in a Medicare Advantage Plan to switch to another Medicare Advantage Plan or return to Original Medicare. 

---

Copyright (C) 2026 Mosaic FI, LLC. All rights reserved.  The opinions expressed herein are those of the firm and are subject to change without notice. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of Jenifer Aronson, Tammy Wener, and Leslie Meisner, may differ from the views or opinions expressed by other areas of the firm, and are only for general informational purposes as of April 2, 2026, 2026, and does not contain untrue statements of material facts, or misleading information” for the following third-party disclosure.

While Mosaic FI, LLC believes this information to be current and valuable to its clients, and does not contain untrue statements of material facts, or misleading information, Mosaic FI, LLC provides these links on a strictly informational basis only and cannot be held liable for the accuracy, time-sensitive nature, or viability of any information shown on these sites.

Mosaic FI, LLC is domiciled in Illinois and is a registered investment adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk and, unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

Mosaic FI, LLC may provide links to third-party websites for informational convenience. Mosaic FI, LLC does not adopt or endorse the content on those sites and is not responsible for the accuracy or timeliness of that content.

Mosaic FI, LLC is a State of Illinois-registered investment adviser. This newsletter is for general informational purposes only and does not constitute tax, legal, or accounting advice; it does not take into account the objectives, financial situation, or needs of any individual. Tax laws and regulations may change; consult a qualified tax professional for advice tailored to you.