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

Medicare is a federal health insurance program that covers hospital stays, doctor visits, prescription drugs, and some preventive care. It does not cover everything — dental work, vision care, hearing aids, and long-term nursing home care are not included. Understanding what Medicare pays for and what you pay out of your own pocket helps you plan for healthcare costs in retirement.

Medicare has four parts, each covering different services. Part A covers hospital care. Part B covers outpatient doctor visits and tests. Part D covers prescription drugs. Part C, called Medicare Advantage, is an alternative way to get Parts A and B through a private insurance company. Most people who turn 65 become may be able to access for Medicare, though some younger people with disabilities or end-stage renal disease can join too.

Key Takeaways

  • Medicare Part A covers hospital stays, skilled nursing care after hospitalization, hospice, and some home health services, with you paying a deductible per hospital stay.
  • Medicare Part B covers doctor visits, outpatient surgery, lab tests, imaging, and some preventive screenings, and you pay a monthly premium plus a deductible and copays.
  • Medicare does not cover dental care, vision exams or glasses, hearing aids, long-term custodial nursing home care, or most prescription drugs without Part D.
  • Part D prescription drug coverage varies by plan, and you choose a plan each year during the enrollment period or you may face a penalty if you join later.
  • Medigap supplemental insurance can help pay some of the costs Medicare does not cover, such as copays and deductibles, but it is sold by private insurers and costs extra.

What Medicare Part A covers

Part A covers inpatient hospital care — that means you are admitted to the hospital and stay overnight. It pays for your room, meals, nursing care, and most medical supplies while you are there. Part A also covers up to 100 days in a skilled nursing facility after a hospital stay of at least three days, though you pay a daily copay after day 20. Skilled nursing means a facility where you receive medical care from nurses and therapists, not a regular nursing home where you live long-term.

Part A also covers hospice care if you have a terminal illness, and some home health services such as nursing visits or physical therapy at home after hospitalization. You do not pay a monthly premium for Part A if you or your spouse paid Medicare taxes while working. You do pay a deductible — the amount you pay before Medicare starts paying — for each hospital stay. The deductible changes each year.

What Medicare Part B covers

Part B covers outpatient care: doctor office visits, emergency room visits, lab tests, X-rays, ultrasounds, and outpatient surgery. It also covers some preventive services at no cost to you, such as annual wellness visits, cancer screenings, and vaccinations. Part B pays 80 percent of the approved cost after you meet your deductible; you pay the other 20 percent, called coinsurance.

You pay a monthly premium for Part B. The amount depends on your income — people with higher incomes pay more. You also pay an annual deductible before Part B starts paying. If you do not sign up for Part B when you first turn 65, you may have to pay a penalty for each month you delay, even if you join later.

What Medicare does not cover

Medicare does not cover dental care, including cleanings, fillings, root canals, or dentures. It does not cover routine vision exams, eyeglasses, or contact lenses. Hearing aids and hearing exams are not covered. Long-term custodial care in a nursing home — care that helps you with daily living but is not medical care — is not covered by Medicare, though Medicaid may cover it if you meet income and asset limits.

Medicare does not cover most prescription drugs without Part D. It does not cover cosmetic surgery, most acupuncture, or private-duty nursing. It does not cover care you receive outside the United States, except in limited situations near the border. If you need services Medicare does not cover, you pay the full cost yourself, or you can buy supplemental insurance called Medigap to help cover some of those gaps.

How prescription drug coverage works with Part D

Part D is optional prescription drug coverage sold by private insurance companies approved by Medicare. You choose a Part D plan during the enrollment period each year, usually in October and November. Different plans cover different drugs at different costs, so comparing plans before you choose matters. If you do not sign up for Part D when you first turn 65, you may pay a penalty for each month you go without coverage, even if you join later.

Part D plans have a monthly premium, a deductible, and copays or coinsurance for each prescription. Some drugs are covered at lower cost than others depending on the plan's formulary — the list of drugs it covers. If a drug you take is not on the formulary, you can ask your doctor to request an exception, or you can switch to a different Part D plan during the next enrollment period.

Medigap supplemental insurance fills gaps in Medicare coverage

Medigap, also called supplemental insurance, is sold by private insurance companies to help pay costs that Medicare does not cover — such as copays, coinsurance, and deductibles. It is separate from Medicare and costs an additional monthly premium. Different Medigap plans, labeled A through N, cover different combinations of costs. Plan G, for example, covers the Part B deductible and coinsurance; Plan N covers copays and coinsurance but not the deductible.

You can buy Medigap anytime, but the best time is within six months of turning 65 and signing up for Part B. During this window, insurers cannot deny you coverage or charge you more based on your health history. If you wait longer, you may face higher premiums or denial of coverage. Medigap does not cover prescription drugs — you need Part D for that — and it does not cover long-term nursing home care.

Medicare Advantage is an alternative to Original Medicare

Medicare Advantage, also called Part C, is a way to get your Medicare coverage through a private insurance company instead of the federal government. The insurance company must cover everything Original Medicare covers — Parts A and B — but it may offer extra benefits such as dental, vision, or fitness programs. Most Medicare Advantage plans have lower monthly premiums than Medigap, but they usually have higher copays and may require you to use doctors in their network.

Medicare Advantage plans change their benefits and costs each year, so you can switch plans during the annual enrollment period in October and November. If you leave a Medicare Advantage plan and go back to Original Medicare, you may have a limited window to buy Medigap without being denied or charged more for pre-existing conditions. Understanding the trade-offs between Original Medicare with Medigap and Medicare Advantage helps you choose what works for your health and budget.

Frequently Asked Questions

Do I have to sign up for Medicare at 65?

You become may be able to access for Medicare at 65, but you do not have to sign up if you are still working and covered by your employer's health plan. If you delay signing up without a valid reason, you may pay a penalty when you do join. If you are not working at 65, you should sign up during your initial enrollment period, which starts three months before the month you turn 65.

What is the difference between Original Medicare and Medicare Advantage?

Original Medicare is run by the federal government and covers hospital (Part A) and outpatient (Part B) care nationwide. You can see any doctor who accepts Medicare. Medicare Advantage is run by private insurers and usually requires you to use doctors in their network, but it may offer extra benefits like dental or vision. Both cover the same basic services, but costs and rules differ.

Can I change my Medicare plan after I sign up?

You can change your Part D drug plan or Medicare Advantage plan during the annual enrollment period in October and November each year. If you have a major life change — such as moving, losing employer coverage, or getting married — you may have a special enrollment period to change plans outside the regular window. Contact Medicare to ask if your situation qualifies.

Will Medicare cover my medications?

Part D prescription drug plans cover most common medications, but coverage varies by plan. Each plan has a formulary listing which drugs it covers and at what cost. Some drugs may require prior approval from your doctor. If your drug is not covered, your doctor can request an exception, or you can switch to a different Part D plan during enrollment.

What happens if I cannot afford my Medicare costs?

If your income is low, you may may have access to for programs that help pay Medicare premiums and copays, such as Medicaid, the Medicare Savings Program, or the Low-Income Subsidy for Part D. Your state Medicaid office or local Area Agency on Aging can tell you whether you meet the income limits and how the process works.