If you ask most people on Medicare what kind of coverage they have, they'll say 'Medicare' — and leave it at that. But that single word now describes at least five meaningfully different coverage arrangements, each with its own cost structure, network rules, and financial risk profile. A KFF analysis of Medicare enrollment data reveals just how fragmented — and how consequential — these distinctions have become for the program's 67 million beneficiaries.
The broadest split is between Original Medicare (Parts A and B, administered directly by the federal government) and Medicare Advantage (Part C, delivered through private insurers under contract with CMS). As of 2024, Medicare Advantage enrollment crossed the 50 percent threshold for the first time, meaning more than half of all Medicare beneficiaries are now in a private plan rather than the traditional government program. That's a seismic shift from 2010, when Medicare Advantage covered roughly 25 percent of beneficiaries. The remaining beneficiaries — roughly 47 to 48 percent — are in Original Medicare, though very few of them rely on Parts A and B alone.
Here's why that matters: Original Medicare by itself has no out-of-pocket maximum. In 2025, the Part A hospital deductible is $1,676 per benefit period, and there is no cap on how many benefit periods you can have in a year. Part B carries a 20 percent coinsurance on most outpatient services, also with no ceiling. A serious illness — a cancer diagnosis, a major surgery, a prolonged hospital stay — can generate tens of thousands of dollars in cost-sharing under Original Medicare alone. This is why the overwhelming majority of Original Medicare enrollees carry some form of supplemental coverage.
Among those in Original Medicare, KFF data shows the supplemental coverage landscape breaks into several distinct groups. The largest segment carries Medigap (also called Medicare Supplement Insurance), which is private insurance that wraps around Parts A and B and pays some or all of the cost-sharing those parts leave behind. Medigap Plan G, currently the most popular option for new enrollees, covers the Part A deductible, all Part A coinsurance, Part B coinsurance, skilled nursing facility coinsurance, and foreign travel emergencies — leaving only the Part B deductible ($257 in 2025) as the enrollee's responsibility. Plan N covers similar benefits but requires copays of up to $20 for office visits and up to $50 for emergency room visits. Monthly premiums for Medigap vary widely by plan type, age, and geography — a 65-year-old might pay $120 to $200 per month for Plan G in a lower-cost state, while the same plan could run $250 or more in high-cost markets like New York or Massachusetts.
A second significant group within Original Medicare is covered through Medicaid as a dual-eligible beneficiary. These are individuals who qualify for both Medicare and Medicaid based on income and asset limits, and Medicaid typically covers Medicare's premiums, deductibles, and cost-sharing. In 2025, the full low-income subsidy (also called Extra Help) for Part D drug costs is available to individuals with incomes up to roughly 150 percent of the federal poverty level. Dual-eligible beneficiaries represent a disproportionately vulnerable population — older, sicker, and more likely to need long-term services — and their coverage coordination between two massive government programs is notoriously complex. Some dual-eligibles are enrolled in Dual Eligible Special Needs Plans (D-SNPs), a type of Medicare Advantage plan specifically designed to coordinate Medicare and Medicaid benefits.
A third group within Original Medicare relies on employer-sponsored retiree coverage as their supplement. These are beneficiaries who worked for large employers — often government entities, unions, or major corporations — that continue to provide health benefits in retirement. Retiree coverage typically wraps around Medicare similarly to Medigap, though the specific benefits, cost-sharing, and formularies vary enormously by employer plan. Critically, retiree coverage is not guaranteed: employers can reduce or eliminate these benefits, and many have done so over the past two decades. If your retiree coverage ends, you may face a gap in supplemental protection, and your ability to buy Medigap without medical underwriting depends heavily on your state and the timing of your loss of coverage.
On the Medicare Advantage side, the coverage picture is also more nuanced than a single enrollment number suggests. Medicare Advantage plans are not monolithic — they include HMOs, PPOs, Private Fee-for-Service plans, and Special Needs Plans. HMO plans, which typically require you to use a defined network of providers and get referrals to see specialists, represent the majority of Medicare Advantage enrollment. PPO plans offer more flexibility — you can see out-of-network providers, though usually at higher cost — and tend to carry higher premiums. In 2025, the average Medicare Advantage plan premium is relatively low (many plans advertise $0 premiums), but the real cost comparison requires looking at maximum out-of-pocket limits, which CMS caps at $9,350 for in-network services and $14,000 for combined in- and out-of-network in 2025. Individual plans set their own limits below those caps, and a plan with a $0 premium but an $8,000 out-of-pocket maximum is a very different financial proposition than a plan with a $60 monthly premium and a $3,500 cap.
One coverage source that often gets overlooked in these analyses is the Program of All-Inclusive Care for the Elderly, or PACE. PACE serves a small but medically complex population — individuals who are 55 or older, certified as needing nursing home-level care, and able to live safely in the community. PACE programs provide comprehensive medical and social services through an interdisciplinary team, and for dual-eligible participants, there is typically no premium or cost-sharing. PACE is only available in certain geographic areas, but for those who qualify and have access, it represents one of the most integrated care models in American healthcare.
Understanding which coverage category you fall into isn't just an academic exercise — it determines what you pay when you get sick, which hospitals and doctors are available to you, how your prescription drugs are covered, and what happens if you need care while traveling. If you're in Original Medicare without a Medigap policy and you're not Medicaid-eligible, you're carrying significant financial risk. If you're in Medicare Advantage, you need to review your plan's provider network and formulary every year during the Annual Enrollment Period (October 15 through December 7), because both can change. If you're relying on retiree coverage, you should have a contingency plan in case that coverage changes or ends.
For beneficiaries who want to switch from Medicare Advantage back to Original Medicare and add a Medigap policy, timing matters enormously. Outside of specific guaranteed issue windows — like the six-month Medigap Open Enrollment Period that begins when you first enroll in Part B at 65, or a Special Enrollment Period triggered by a qualifying event — insurers in most states can use medical underwriting to deny you coverage or charge higher premiums based on your health history. If you live in California, Idaho, Illinois, Kentucky, Louisiana, Maine, Maryland, Missouri, Nevada, New Jersey, New York, Oklahoma, or Oregon, your state's birthday rule gives you an annual 30-day window to switch Medigap plans without underwriting. Knowing your state's rules before you need them can be the difference between having access to comprehensive supplemental coverage and being locked out of it.
The bottom line from the KFF data is that Medicare is not one program — it's a patchwork of coverage arrangements that each carry different tradeoffs. The right choice depends on your health status, your financial situation, your geographic location, your preferred doctors, and your tolerance for administrative complexity. Medicare's State Health Insurance Assistance Programs (SHIPs) offer free, unbiased counseling to help you evaluate your specific situation; you can find your local SHIP counselor at shiphelp.org.