Medicare parts, Medigap, and Medicare Advantage

What this page covers

On the InsTX-LAH05 outline in force on or after 1 September 2026, Medicare Parts A, B, C, and D sit under Social Insurance (VII.A, part of 6 scored questions). Medicare supplement policies sit under Types of Policies (V.D). These unofficial notes treat them together because stems constantly ask you to sort Original Medicare, Medigap, and Medicare Advantage. They are not exam questions. Not a prelicensing course. Not affiliated with Pearson VUE, TDI, CMS, or NAIC. Passing is not guaranteed.

Original Medicare is the federal program: Part A (hospital insurance) and Part B (medical insurance). Part C is Medicare Advantage — a private plan that replaces A and B (and often includes D). Part D is standalone prescription-drug coverage for people who stay on Original Medicare. Medigap (Medicare supplement) is a private policy that fills gaps in Original Medicare. It does not work with Medicare Advantage.

VII.A Medicare Parts A, B, C, and D

Part A covers inpatient hospital, skilled nursing after a qualifying hospital stay, hospice, and some home health. It is premium-free for most people who paid Medicare taxes long enough; others can buy in. Benefit periods, deductibles, and daily coinsurance apply. Part A does not cover long-term custodial nursing-home care.

Part B covers physician services, outpatient care, durable medical equipment, and preventive services. It has a monthly premium and an annual deductible, then typically 80/20 coinsurance on approved amounts. There is no annual out-of-pocket maximum on Original Medicare alone.

Part C (Medicare Advantage) is offered by private insurers that contract with Medicare. The enrollee must still be entitled to A and B and keep paying the Part B premium. The plan may charge an extra premium. It can include extra benefits (dental, vision, fitness) and usually includes drug coverage. Care is often through a network. You cannot buy a Medigap policy to wrap a Medicare Advantage plan.

Part D is the prescription-drug benefit. It can be a standalone PDP with Original Medicare or embedded in many Advantage plans. Formularies, tiers, prior authorization, and a coverage gap or out-of-pocket threshold show up on stems. Late enrollment can trigger a permanent penalty. Medicaid is a separate needs-based program (VII.B); do not call Medicaid “Part E.”

V.D Medicare supplement (Medigap)

Medigap is standardized private insurance that pays some of the deductibles, coinsurance, and excess charges left by Parts A and B. Plans are lettered (A, B, D, G, N, and so on). The letter, not the company name, tells you the benefit package. Plan A is the core package; other letters add items such as the Part A deductible or Part B excess charges. Open enrollment when first entitled to Part B at 65 is the cleanest guarantee-issue window; later issue can mean underwriting except where guaranteed-issue rights apply.

Medigap does not pay Part D drugs. It does not replace Part A or B. The insured must have A and B. Selling Medigap to someone on Medicare Advantage, or implying it covers long-term custodial care, is the usual trap. Texas has additional Medigap rules on the state-law half of the exam (TX III.B) — minimum standards and cancellation sit there. This page is the general-knowledge product distinction.

Sort three living arrangements. Original Medicare only: A + B, optional D, no network in most of the country, no out-of-pocket cap. Original Medicare + Medigap: same providers as Medicare, gaps filled by the lettered plan, still buy D separately. Medicare Advantage: one private plan, network rules, often D included, no Medigap.

Study cues

If the stem says “hospital deductible under federal Medicare,” think Part A. If it says “doctor visit coinsurance,” think Part B. If it says “private plan that replaces A and B,” think Part C / Advantage. If it says “standalone drugs with Original Medicare,” think Part D. If it says “fills the 20 percent,” think Medigap — and only with Original Medicare.

These notes are unofficial original summaries aligned to outline headings. After you can name each part and explain why Medigap and Advantage do not stack, drill the L&AH social-insurance and policy-type sets. Passing is not guaranteed.