Medicare is a federal health insurance program for people 65 and older

Medicare is a health insurance program run by the federal government through the Centers for Medicare & Medicaid Services (CMS). It covers hospital care, doctor visits, prescription drugs, and preventive services for people who are 65 or older. Some younger people with disabilities or end-stage renal disease also receive Medicare coverage.

The program is funded through payroll taxes that workers and employers pay during working years. When you turn 65, you become may be able to access to join Medicare regardless of your income or health history. You do not have to be retired to sign up, though most people do join around the time they stop working.

Medicare is divided into four separate parts, each covering different services. Understanding which parts exist and what they cover helps you know what to expect when you reach 65 or when you help someone else navigate the program.

Key Takeaways

  • Medicare Part A covers hospital stays, skilled nursing care, and hospice; Part B covers doctor visits and outpatient services; Part D covers prescription drugs; and Part C is an alternative plan that combines A, B, and D through private insurers.
  • You can join Medicare starting three months before you turn 65, and enrollment happens through Social Security or Medicare.gov, not through a separate process process.
  • Most people pay no premium for Part A because they paid Medicare taxes while working, but Part B and Part D have monthly premiums that vary based on income.
  • Original Medicare (Parts A and B) has deductibles and copayments, so many people also buy supplemental insurance or choose a Medicare Advantage plan to reduce out-of-pocket costs.

The four parts of Medicare and what each one covers

Part A covers inpatient hospital care, including room, meals, and nursing services during a hospital stay. It also covers skilled nursing facility care (short-term care after a hospital stay), hospice care for people with terminal illness, and some home health services. Part A has a deductible per hospital stay, and you pay coinsurance for stays longer than 60 days.

Part B covers doctor office visits, outpatient hospital services, medical equipment like wheelchairs or oxygen, and preventive care such as screenings and vaccinations. Part B requires a monthly premium, which is usually deducted from your Social Security check. You also pay a deductible and a percentage of the cost for most services.

Part D covers prescription medications. It is offered through private insurance companies that contract with Medicare, so the drugs covered and the cost vary by plan. You choose a Part D plan during your enrollment period, and coverage begins January 1 of the following year.

Part C, also called Medicare Advantage, is an alternative to Original Medicare (Parts A and B). Private insurance companies offer Part C plans that must cover everything Part A and B cover, plus usually include Part D prescription coverage. Many Part C plans have lower out-of-pocket costs than Original Medicare, but they often limit which doctors and hospitals you can use.

When you can join Medicare and how enrollment works

You can begin the enrollment process three months before the month you turn 65. Your Initial Enrollment Period lasts seven months total — three months before, the month you turn 65, and three months after. If you join during this window, your coverage starts on the first day of the month you turn 65 or the month after, depending on when you sign up.

Most people enroll through Social Security, either online at ssa.gov or by visiting a local Social Security office. You can also enroll directly through Medicare.gov or by calling 1-800-MEDICARE. You will need your Social Security number and information about any current health coverage you have.

If you miss your Initial Enrollment Period, you can still join during the General Enrollment Period, which runs January 1 through March 31 each year. However, late enrollment penalties explore — your Part B and Part D premiums increase permanently by a percentage for each year you delayed joining. This makes enrolling on time financially important.

How much Medicare costs and what you pay out of pocket

Part A has no monthly premium for most people because you paid Medicare taxes while working. However, you pay a deductible when you are admitted to the hospital, and you pay coinsurance if your stay extends beyond 60 days.

Part B has a monthly premium that changes each year. In 2024, the standard premium is $164.90 per month, though higher-income individuals pay more. You also pay an annual deductible and typically 20 percent of the cost for most services after you meet the deductible.

Part D premiums vary widely depending on which plan you choose and which drugs you take. Plans range from roughly $7 to $100 per month. You also pay out-of-pocket costs for medications, which vary based on the plan's formulary and your income level.

Part C premiums vary by plan and location. Some plans have no monthly premium, while others charge $50 to $200 or more per month. Out-of-pocket costs depend on the specific plan you choose.

The difference between Original Medicare and Medicare Advantage

Original Medicare consists of Part A and Part B. You can see any doctor or hospital that accepts Medicare anywhere in the country. You pay the deductibles and coinsurance amounts set by the federal government, which are the same nationwide. If you want prescription drug coverage, you must choose a separate Part D plan.

Medicare Advantage (Part C) is offered by private insurance companies. These plans must cover everything Original Medicare covers, but they often have lower out-of-pocket costs. The trade-off is that most Advantage plans use a network — you must see doctors and use hospitals within that network, except in emergencies. Some plans require referrals to see specialists.

Original Medicare works well if you travel frequently, see specialists, or prefer the freedom to choose any provider. Medicare Advantage works well if you want lower monthly costs, prefer a single plan to manage, and do not mind using a network of providers.

Supplemental insurance and what it covers

Supplemental insurance, also called Medigap, is a policy you buy from a private insurance company to cover costs that Original Medicare does not pay — deductibles, coinsurance, and copayments. Medigap is separate from Medicare itself and is not available if you have a Medicare Advantage plan.

There are ten standardized Medigap plans, labeled A through N. Each plan covers a different combination of costs. For example, Plan F covers the Part B deductible, while Plan G does not. You choose which plan fits your needs and budget. Premiums vary by insurance company and your age.

If you have a Medicare Advantage plan, you do not need Medigap because Advantage plans already limit your out-of-pocket costs. However, some people with Advantage plans buy a separate dental or vision plan if those services are not included in their Advantage coverage.

Special situations: disability, end-stage renal disease, and younger people

You do not have to wait until 65 to join Medicare if you have been receiving Social Security Disability Insurance (SSDI) for 24 months. After 24 months of receiving disability payments, Medicare coverage begins automatically. You do not need to do anything — you will receive your Medicare card in the mail.

People with end-stage renal disease (ESRD) — permanent kidney failure requiring dialysis or transplant — can join Medicare regardless of age. Coverage typically begins the first month of dialysis treatment or the month of a kidney transplant. You should contact Social Security or Medicare to enroll as soon as you receive an ESRD diagnosis.

Some people under 65 with ALS (amyotrophic lateral sclerosis) also may have access to for Medicare. If you have ALS and are receiving SSDI, you become may be able to access for Medicare after just one month of disability payments instead of the usual 24 months.

Frequently Asked Questions

Do I have to join Medicare when I turn 65?

You do not have to join, but if you delay and do not have other may have access to coverage, you will face late enrollment penalties on your Part B and Part D premiums for the rest of your life. If you are still working and covered by your employer's health plan, you may be able to delay Part B without penalty, but you should contact Medicare to confirm your specific situation.

Can I change my Medicare plan after I join?

Yes, during the Annual Enrollment Period from October 15 through December 7 each year, you can switch between Original Medicare and Medicare Advantage plans, or change your Part D prescription drug plan. Changes take effect January 1 of the following year. Outside this window, you can only change plans if you have a may have access to life event such as moving out of your plan's service area.

What happens if I do not have prescription drug coverage?

If you go without Part D coverage for more than 63 days in a row, you will pay a late enrollment penalty on top of your regular Part D premium for as long as you have Medicare. The penalty is about 1 percent of the national average Part D premium for each month you were without coverage. It is better to join a plan even if you do not take medications regularly.

Does Medicare cover dental, vision, or hearing?

Original Medicare does not cover routine dental, vision, or hearing services. Some Medicare Advantage plans include these benefits, though coverage is usually limited. You can buy standalone dental, vision, or hearing plans from private insurers if you want this coverage.

How do I know which Medicare plan is right for me?

Compare plans based on which doctors and hospitals you use, which medications you take, and how much you can afford to pay out of pocket. Medicare.gov has a plan comparison tool where you can enter your information and see side-by-side costs for different plans in your area. You can also call 1-800-MEDICARE to speak with someone who can walk you through your options.