Medicare 101: Overview

At Compass Health and Wealth, we help you understand your Medicare choices, so you feel empowered to make confident decisions about your health.

Person on a laptop with a chat bubble icon above the screen

Join us for a free Medicare Webinar

Whether you’re approaching Medicare for the first time or simply want a better understanding of how it works, our webinars break down important Medicare topics into straightforward, easy-to-understand information so you can feel more prepared for the decisions ahead.

On-Demand Medicare Webinar →
Live Medicare Webinar →

What Is Medicare?

Medicare is federal health insurance primarily for people age 65 and older, as well as some younger people with certain disabilities or health conditions. Medicare is divided into different parts, each covering specific healthcare needs.

Original Medicare

Part A — Hospital Insurance
Helps cover hospital stays, skilled nursing care, hospice care,
and certain home health services.


Part B — Medical Insurance
Helps cover doctor visits, outpatient care, preventive services,
and medical supplies.

Additional Medicare Coverage

Medicare Supplement (Medigap)
Works with Original Medicare to help cover certain out-of-pocket costs, such as deductibles, copayments, and coinsurance. Prescription drug coverage is purchased separately.


Part C — Medicare Advantage
An alternative to Original Medicare that includes Parts A and B and may offer additional benefits. Coverage, costs, and provider networks vary by plan.



Part D — Prescription Drug Coverage
Helps cover prescription medications and can be paired with Original Medicare or included in certain Medicare Advantage plans.

October 15 – December 7

During AEP, you can make changes to Medicare Advantage or Part D coverage, including joining, switching, or dropping a plan.

Medicare Enrollment Periods

Medicare has several enrollment periods for joining or changing coverage. Certain life events, such as moving or losing employer coverage, may allow you to enroll or change coverage outside the standard enrollment periods. We can help you determine which one applies to your situation.


Initial Enrollment Period (IEP)


A seven-month window around your 65th birthday when you can first enroll in Medicare.


Annual Enrollment Period (AEP)


October 15 – December 7

Join, switch, or drop a Medicare Advantage or Part D prescription drug plan.

Medicare Advantage Open Enrollment (OEP)


January 1 – March 31

If you have Medicare Advantage, you can switch plans or return to Original Medicare.

Special Enrollment Period (SEP)

Glossary of Common Medicare Terms

Here we’ll explain some common Medicare terms you may come across as you look at plans and policies:

  • Advance Beneficiary Notice (ABN)

    A notice from your provider if they think Original Medicare may not pay for a service. Allows you to decide whether to proceed and pay out of pocket.

  • Annual Notice of Change (ANOC)

    A yearly notice sent by your Medicare Advantage (Part C) or Part D prescription drug plan that explains changes to your coverage, costs, and benefits for the upcoming plan year.

  • Assignment

    When a provider agrees to accept Medicare’s approved amount as full payment.

  • Copayment (Copay)

    A fixed dollar amount you pay for a covered service (like $20 for a doctor visit).

  • Coinsurance

    Your share of the costs for a covered service, usually a percentage (like 20%).

  • Coverage Determination (Part D)

    A decision your drug plan makes about whether it will cover a drug and what you’ll pay for it.

  • Creditable Coverage

    Drug coverage (an employer plan, VA benefits, or other) that’s determined to be at least as good as Medicare Part D coverage. Helps you avoid enrollment penalties. See the Medicare > Prescription Drug Plans page for more information.

  • Durable Medical Equipment (DME)

    Medical items ordered by a physician for you to use at home, such as wheelchairs, walkers, oxygen machines, etc.

  • Deductible

    The amount you pay out of pocket during a calendar year before your plan starts to pay benefits.

  • Emergency Care

    Care needed immediately for a life-threatening injury or illness (such as chest pain, trouble breathing, severe bleeding, or signs of a stroke). Covered anywhere in the U.S., even outside your plan’s network (if you are in a Medicare Advantage plan).

  • Guaranteed Issue Rights

    Your right to enroll in a Medigap policy without being denied or charged a higher premium based on existing health conditions. You get this right during standard enrollment periods and special situations.

  • Lifetime Reserve Days

    Extra hospital days Medicare covers after you use up your regular hospital coverage. You will pay a daily copayment. This is limited to 60 days over your lifetime.

  • Limiting Charge

    A cap on what some doctors can charge you in the case that they don’t accept Medicare assignment.

  • Medicare Summary Notice (MSN)

    A statement you get every three months if you are in Original Medicare showing what Medicare paid for services and what you may owe.

  • Premium

    The monthly amount you pay for your Original Medicare or Medicare plan. You may have separate premiums for a Medigap plan, a Medicare Advantage plan, or a Part D drug plan.

  • Prior Authorization

    Approval required by some plans in order for the plan to cover a certain service or medication. This approval must be obtained from the insurance company.

  • Urgently Needed Care

    Care you need soon for a sudden illness or injury that isn’t life-threatening (such as a sprained wrist, minor cut, or respiratory infection while traveling). Usually covered even if you’re out of your Medicare Advantage plan’s service area.