Medicare is health insurance run by the federal government for people 65 and older

Medicare is not one insurance plan — it is four separate parts that cover different things. Part A covers hospital stays, skilled nursing care, and hospice. Part B covers doctor visits, outpatient care, and medical equipment. Part D covers prescription drugs. Part C, also called Medicare Advantage, is an alternative way to get Parts A and B through a private insurance company instead of the government.

You become may be able to access for Medicare the month you turn 65, regardless of whether you are still working. You do not have to retire. If you have been receiving Social Security Disability Insurance (SSDI) for 24 months, or if you have end-stage renal disease or ALS, you may be may be able to access before 65. Most people pay a monthly premium for Part B and Part D, and Part A is usually free if you or your spouse paid Medicare taxes for at least 10 years.

Medicare is different from Medicaid, which is a separate program for people with lower incomes. Some people have both. The key difference: Medicare is based on age or disability status; Medicaid is based on income.

Key Takeaways

  • Medicare Part A covers hospital care, Part B covers doctor visits and outpatient services, and Part D covers prescription drugs — you can use all three together through Original Medicare.
  • Part C (Medicare Advantage) is an alternative that bundles Parts A, B, and usually D through a private insurance company, often with lower out-of-pocket costs but a smaller network of doctors.
  • You must sign up for Part B and Part D during your initial enrollment period or pay a penalty for every month you delay, even if you do not yet need the coverage.
  • Original Medicare (Parts A and B) has no network restrictions — you can see any doctor or hospital that accepts Medicare — but you pay a deductible and coinsurance for each service.
  • Medigap insurance is a separate policy you buy from a private company to cover the costs Medicare does not pay, such as deductibles and coinsurance.

How Original Medicare works and what you pay

Original Medicare is the government-run option. You use your Medicare card at any hospital, doctor's office, or medical facility that accepts Medicare — which is most of them. There is no network, no referral requirement, and no gatekeeper. You can see any specialist without asking permission first.

You pay three types of costs: a monthly premium for Part B (about $165 in 2024, though it varies by income), a yearly deductible before Medicare starts paying (about $1,600 for hospital care in 2024), and coinsurance after that — usually 20 percent of the cost for doctor visits and outpatient services. For hospital stays, you pay a flat amount per day after the deductible, not a percentage. These dollar amounts change each year.

Part A (hospital insurance) is usually free. Part D (prescription drugs) costs extra — the premium varies by plan, typically $7 to $100 per month depending on which drugs you take and which plan you choose. You choose a Part D plan during the annual enrollment period (October 15 to December 7 each year), and the plan you pick affects what you pay for medications.

Medicare Advantage (Part C) as an alternative

Medicare Advantage is a way to get your Medicare coverage through a private insurance company instead of the government. The insurance company must cover everything Original Medicare covers — hospital care, doctor visits, and prescription drugs — but they can add extra benefits like dental, vision, or gym memberships. Many Advantage plans have $0 monthly premiums, though you still pay the Part B premium to Medicare.

The trade-off is that Advantage plans use networks. You must see doctors and hospitals in the plan's network, except in emergencies. If you see an out-of-network doctor, you pay more or the plan may not cover it at all. Some plans require referrals to see specialists. Out-of-pocket costs are often lower than Original Medicare — many plans cap your yearly spending — but you have less freedom to choose your providers.

Advantage plans change their networks, benefits, and costs every year. If your doctor leaves the network or the plan changes in a way you do not like, you can switch during the annual enrollment period. If you move out of the plan's service area, you can switch when ready.

Medigap insurance fills the gaps Original Medicare leaves

Original Medicare does not cover everything. You pay coinsurance, deductibles, and copays out of your own pocket. Medigap is supplemental insurance sold by private companies that pays some or all of these costs. It is separate from Medicare itself — you buy it in addition to Parts A and B.

There are ten standardized Medigap plans, labeled A through N. Plan G covers the most — it pays your Part B deductible, coinsurance, and copays — but it costs more. Plan A is cheaper but covers less. You choose which plan fits your budget and health needs. The coverage is the same no matter which insurance company sells it to you; the only difference is the premium.

You can only buy Medigap during your initial enrollment period (the six months starting the month you turn 65 and enroll in Part B) without answering health questions. If you wait, insurance companies can deny you or charge more based on your health history. You cannot use Medigap with Medicare Advantage — Advantage plans already include coverage for coinsurance and copays.

When you must sign up and what happens if you miss the important date

Your initial enrollment period for Medicare is the three months before the month you turn 65, the month you turn 65, and the three months after. If you sign up during this window, your coverage starts the month you turn 65 (or the first day of the month you turn 65, depending on your birthday).

If you are still working and have health insurance through your employer, you may be able to delay Part B without penalty. You must tell Medicare you are still working and have coverage; this is called creditable coverage. Once you leave your job or lose that coverage, you have eight months to sign up for Part B without penalty. If you miss this window, you pay a permanent penalty — an extra 10 percent of your Part B premium for every 12 months you were late.

The same rule applies to Part D. If you go without drug coverage for more than 63 days in a row, you pay a penalty when you finally sign up. The penalty is 1 percent of the national average Part D premium for every month you were late, and it is permanent.

What Medicare does not cover

Medicare does not cover routine dental care, vision exams, hearing aids, or long-term care (nursing home or in-home care for non-medical reasons). It does not cover most prescription glasses or contacts. It does not cover routine foot care, unless you have diabetes. It does not cover cosmetic surgery.

Some of these gaps can be filled by Medigap or Medicare Advantage plans. Many Advantage plans include dental and vision benefits. Medigap does not add these benefits, but it does cover the coinsurance and deductibles that Original Medicare leaves you to pay.

If you need long-term care — help with daily activities like bathing, dressing, or eating — Medicare does not pay for it. Medicaid may, if your income is low enough. Long-term care insurance, purchased before you need care, is another option. Some people pay out of pocket.

How to find doctors and check coverage before you need care

Use the Medicare Plan Finder tool on Medicare.gov to see which doctors, hospitals, and pharmacies are in your area and which plans cover them. You can search by doctor's name or by location. If you use Original Medicare, any Medicare-accepting provider is in your network. If you are considering Medicare Advantage, search the specific plan's network to make sure your doctors participate.

Before you have a procedure or test, ask your doctor's office whether it is covered by Medicare and what you will owe. Medicare covers some services only under certain conditions — for example, it covers physical therapy only if a doctor orders it for a specific medical reason. The office can check your coverage and give you an estimate of your out-of-pocket cost.

If your doctor is not in your plan's network or does not accept Medicare, you have options: switch to a plan that includes that doctor, switch to Original Medicare, or ask your doctor if they will make an exception. Some doctors do, especially if you have been their patient for years.

Questions to ask your doctor or Medicare counselor

Before you turn 65, ask your current doctor whether they accept Medicare and which Medicare plans they participate in. Ask whether they are accepting new Medicare patients. If you take prescription drugs, ask which Part D plans cover them and at what cost — the same drug can cost very different amounts in different plans.

Ask your doctor about any procedures or tests you know you will need in the next year, and whether Medicare covers them. Ask whether you need any preventive care — Medicare covers many screenings and vaccines at no cost to you. If you are considering Medicare Advantage, ask your doctor's office which Advantage plans they participate in and whether they require referrals.

If you are confused about your options, contact your State Health Insurance information Program (SHIP). It is free, and counselors can walk you through Original Medicare versus Advantage, help you compare Medigap plans, and answer questions about enrollment important date. Find your state's SHIP at shiptalk.org.

Frequently Asked Questions

Can I switch from Original Medicare to Medicare Advantage or back again?

Yes. You can switch during the annual enrollment period (October 15 to December 7 each year), and your new plan starts January 1. If you move out of your Advantage plan's service area, you can switch when ready. If you switch from Advantage back to Original Medicare, you can buy Medigap during the annual enrollment period, but insurance companies can charge more or deny you if you wait.

What happens to my Medicare if I move to another state?

Original Medicare works in all 50 states and U.S. territories. If you have Medicare Advantage, check whether your plan operates in your new state. Many do not. You can switch to a different Advantage plan or to Original Medicare when you move, even outside the annual enrollment period.

Do I have to take Part D if I do not take any prescription drugs?

You do not have to take it now, but if you enroll in Part D later, you pay a permanent penalty for every month you were late — 1 percent of the national average Part D premium per month. If you are certain you will never need prescription drugs, you can skip it, but most people eventually do.

What is the difference between Medicare and my VA benefits if I am a veteran?

You can have both. Medicare is your federal health insurance as a senior; VA benefits are your veteran's health care. You do not have to choose. Some veterans use VA for most care and Medicare for specialists or when they travel. Talk to your VA provider about how to coordinate the two.

Can I use Medicare outside the United States?

Original Medicare does not cover care outside the U.S., except in limited cases in Canada and Mexico near the border. Some Medicare Advantage plans offer limited international coverage. If you travel abroad regularly or plan to retire outside the U.S., ask your plan what is covered before you go.