Medicare provides health coverage for Americans 65 and older and some younger people with disabilities. Understanding the parts and options helps you make the best choices for your healthcare needs.
Medicare Overview
Medicare has multiple components:
Advertisement
- Part A: Hospital insurance
- Part B: Medical insurance
- Part C: Medicare Advantage (alternative to A+B)
- Part D: Prescription drug coverage
- Medigap: Supplemental insurance
Medicare Part A (Hospital Insurance)
What's Covered
- Inpatient hospital stays
- Skilled nursing facility care (limited)
- Hospice care
- Home health care (some)
Cost
- Premium-free for most (if paid Medicare taxes 10+ years)
- Deductible per benefit period
- Coinsurance for extended stays
Medicare Part B (Medical Insurance)
What's Covered
- Doctor visits
- Outpatient care
- Preventive services
- Durable medical equipment
- Mental health services
- Some home health care
Cost
- Monthly premium (income-based)
- Annual deductible
- 20% coinsurance (no cap)
Original Medicare vs. Medicare Advantage
Original Medicare (Parts A + B)
- Use any Medicare-accepting provider
- No network restrictions
- No referrals needed
- 20% coinsurance with no maximum
- Add Part D for drugs, Medigap for gaps
Medicare Advantage (Part C)
- Private insurance that replaces Parts A + B
- Usually includes Part D
- Often includes extra benefits (dental, vision)
- Network restrictions (HMO, PPO)
- Out-of-pocket maximum (Original Medicare has none)
- May have lower premiums
Medicare Part D (Prescription Drugs)
How It Works
- Optional coverage through private insurers
- Needed if you have Original Medicare
- Each plan has its own formulary
- Coverage gap ("donut hole") may apply
Costs
- Monthly premium (varies by plan)
- Annual deductible
- Copays or coinsurance for prescriptions
- Higher costs in coverage gap
Medigap (Medicare Supplement Insurance)
What It Does
- Fills gaps in Original Medicare
- Pays deductibles, coinsurance
- Standardized plans (A, B, C, D, F, G, K, L, M, N)
- Sold by private insurers
Most Popular Plans
- Plan G: Comprehensive coverage, must pay Part B deductible
- Plan N: Lower premium, some copays
- Plan F: Most comprehensive (not available to new enrollees)
Important Rules
- Cannot have Medigap with Medicare Advantage
- Best to buy during Medigap Open Enrollment (first 6 months of Part B)
- Guaranteed issue during this period
Medicare Enrollment Periods
Initial Enrollment Period
- 7-month period around 65th birthday
- 3 months before, birthday month, 3 months after
- Enroll on time to avoid penalties
General Enrollment Period
- January 1 - March 31 annually
- For those who missed initial enrollment
- Coverage starts July 1
- Late penalties may apply
Annual Enrollment Period
- October 15 - December 7 annually
- Change Medicare Advantage or Part D plans
- Switch between Original Medicare and Advantage
Medicare Costs to Plan For
- Part B premium: Income-based, ~$174.70/month base (2024)
- Part D premium: Varies by plan
- Medigap premium: Varies by plan and location
- Deductibles: Part A and Part B
- Coinsurance/copays: For services and drugs
Getting Help Choosing
- Medicare.gov plan finder tool
- State Health Insurance Assistance Program (SHIP)
- Independent insurance agents
- Social Security Administration
Review coverage annually—plan benefits and your needs may change.
