Medicare is federal health insurance for people 65 and older

Medicare is a health insurance program run by the federal government. You become may be able to access for it when you turn 65, regardless of your income or health history. It covers hospital stays, doctor visits, prescription drugs, and some preventive care. You do not have to be retired to get Medicare — age 65 is the only requirement for most people.

Medicare is not the same as Medicaid. Medicaid is a separate program for people with low income, and it is run by states. Medicare is the same in every state and is based on age, not money. Some people have both programs at the same time.

You pay into Medicare through payroll taxes while you work. When you turn 65, that money becomes your insurance. You do not explore for Medicare the way you explore for other benefits — you enroll during a specific window, usually the three months before the month you turn 65.

Key Takeaways

  • Medicare starts at age 65 and is the same federal program in every state, paid for through payroll taxes you paid while working.
  • Medicare has four parts: Part A covers hospital care, Part B covers doctor visits, Part D covers prescription drugs, and Part C is an alternative plan that combines them.
  • You must enroll during your initial enrollment window — usually three months before the month you turn 65 — or you may pay higher premiums for life.
  • Original Medicare (Parts A and B) requires you to pay a deductible and coinsurance, so many people also buy a Medigap policy or choose a Medicare Advantage plan.
  • You can change your coverage once a year during the annual enrollment period, which runs from October 15 to December 7.

The four parts of Medicare and what each one covers

Part A covers inpatient hospital care — stays in a hospital bed, skilled nursing facilities, hospice, and some home health care. You do not pay a monthly premium for Part A if you or your spouse paid Medicare taxes for at least 10 years. You do pay a deductible when you are admitted to the hospital, and you pay coinsurance (a daily amount) if you stay longer than 60 days.

Part B covers outpatient care: doctor visits, lab tests, X-rays, ambulance services, and durable medical equipment like wheelchairs or oxygen. Part B has a monthly premium, which changes each year. Most people pay this premium automatically from their Social Security check. You also pay a yearly deductible and then 20 percent coinsurance for most services.

Part D covers prescription drugs. It is optional, but if you do not sign up when you first become may be able to access and you go without drug coverage, you will pay a penalty for every month you delay. Part D plans are offered by private insurance companies, and the cost and drugs covered vary by plan and by year. You choose a plan during enrollment.

Part C, also called Medicare Advantage, is an alternative to Original Medicare. Instead of Parts A and B, you join a private insurance plan that must cover at least what Medicare covers. Most Medicare Advantage plans include Part D drug coverage. The trade-off is that you usually have a network of doctors and hospitals you must use, and you may pay more if you see someone outside the network.

Original Medicare versus Medicare Advantage

With Original Medicare (Parts A and B), you can see any doctor or hospital that accepts Medicare anywhere in the country. You pay a deductible and coinsurance for each service. Original Medicare does not have a yearly limit on what you pay out of pocket — theoretically, you could owe thousands of dollars in a year with high medical costs. This is why many people buy a Medigap policy, a supplemental insurance plan that covers some or all of the deductible and coinsurance you would otherwise owe.

Medicare Advantage plans usually have lower or no monthly premiums than Original Medicare plus Medigap, and they cap your yearly out-of-pocket costs. However, you must use doctors and hospitals in the plan's network, except in emergencies. If you travel frequently or have a doctor you want to keep, check whether that doctor is in the plan's network before you enroll.

Both routes require you to pay for Part D separately unless you choose a Medicare Advantage plan that includes drug coverage. The choice between Original Medicare and Medicare Advantage depends on your health, your doctors, your budget, and how much you travel. There is no single right answer for everyone.

When and how to enroll in Medicare

Your initial enrollment window is the seven-month period that includes the three months before the month you turn 65, the month you turn 65, and the three months after. For example, if you turn 65 in June, your window runs from March through September. You should enroll as early as possible in this window so your coverage starts on time.

You can enroll online at Medicare.gov, by phone at 1-800-MEDICARE, or in person at your local Social Security office. You will need your Social Security number and information about your current health coverage. If you are still working and have health insurance through your job, tell Medicare — you may be able to delay enrolling in Part B without a penalty.

If you miss your initial enrollment window, you can still enroll, but you will pay a permanent penalty on your Part B and Part D premiums. The penalty is 10 percent of the Part B premium for each full year you were may be able to access but not enrolled, and it stays with you for life. This is why enrolling on time matters.

After your initial enrollment, you can change your coverage once a year during the annual enrollment period, which runs from October 15 to December 7. Changes take effect on January 1. You can also make changes if you have a may have access to life event, such as moving to a new state or losing other health coverage.

What Medicare costs and what you pay out of pocket

Part A has no monthly premium for most people, but you pay a deductible ($1,632 in 2024, though this amount changes yearly) when you are admitted to a hospital. Part B has a monthly premium that varies by income — in 2024, the standard premium is $174.70 per month, but higher-income people pay more. You also pay a yearly deductible for Part B ($240 in 2024) before Medicare starts to pay.

Part D premiums vary widely depending on which plan you choose. Some plans cost $5 to $10 per month, while others cost $50 or more. The coverage and cost change every year, so you should review your options during the annual enrollment period even if you have been happy with your plan.

With Original Medicare, you pay 20 percent coinsurance for most doctor visits and services after you meet your deductible. There is no yearly cap on what you can owe. With Medicare Advantage, you typically pay a copay (a fixed amount like $20 or $40) for each visit, and your yearly out-of-pocket costs are capped — in 2024, the cap is $8,050 for in-network care.

Many people find that the total cost of Original Medicare plus a Medigap policy is similar to or higher than a Medicare Advantage plan, depending on their health and which doctors they see. Comparing plans during enrollment can save you hundreds of dollars per year.

Common mistakes to avoid when enrolling

The biggest mistake is missing your initial enrollment window. If you turn 65 and do not enroll in Medicare, you will owe a lifetime penalty even if you enroll later. The only exception is if you are still working and have health coverage through your job — in that case, you can delay Part B without penalty, but you must tell Medicare about your work coverage.

Another common mistake is not choosing a Part D plan. If you go without prescription drug coverage and later enroll, you will pay a penalty for each month you were uninsured. Even if you do not take prescription drugs now, signing up for a low-cost plan protects you from this penalty.

A third mistake is not reviewing your coverage during the annual enrollment period. Plans change their premiums, deductibles, and drug formularies (the list of drugs they cover) every year. A plan that was good for you last year may cost more or cover fewer of your drugs this year. The annual enrollment period is your chance to switch to a better plan without penalty.

Frequently Asked Questions

Do I have to enroll in Medicare when I turn 65?

Yes, unless you are still working and have health coverage through your job. If you work past 65 and have employer coverage, you can delay enrolling in Part B without penalty, but you must tell Medicare about your work coverage. If you do not enroll and do not have an exception, you will pay a penalty for life.

Can I have Medicare and Medicaid at the same time?

Yes. If you are 65 or older and have low income, you may be may be able to access for both. Medicaid can help pay your Medicare premiums and out-of-pocket costs. Contact your state Medicaid office to learn whether you may have access to.

What happens if I move to a different state?

Your Medicare coverage moves with you. However, if you are in a Medicare Advantage plan, you may need to switch plans because networks are usually state-specific. You can change plans when you move without waiting for the annual enrollment period.

Does Medicare cover dental, vision, or hearing?

Original Medicare does not cover routine dental, vision, or hearing care. Some Medicare Advantage plans include limited dental or vision benefits, but coverage varies widely. You can buy standalone dental or vision plans, or pay out of pocket.

What if I disagree with a decision Medicare made about my claim?

You have the right to appeal. You will receive a notice explaining why Medicare denied your claim. The notice includes instructions for filing an appeal. You can also contact your State Health Insurance information Program (SHIP) for free help understanding your appeal rights.