What Traditional Medicare Is

Traditional Medicare is the federal health insurance program run directly by the Centers for Medicare & Medicaid Services (CMS). It is not an insurance company you choose — it is the program itself. When you turn 65 or become may be able to access through disability or end-stage renal disease, you enroll in Medicare, and Traditional Medicare is the standard path unless you actively choose a private alternative.

Traditional Medicare has two main parts. Part A covers hospital stays, skilled nursing facility care, hospice, and some home health services. Part B covers doctor visits, outpatient care, lab work, imaging, and medical equipment. You pay premiums, deductibles, and coinsurance for both parts. The government pays the rest directly to hospitals and doctors on your behalf.

The key difference from private Medicare plans is that you go to any doctor or hospital that accepts Medicare — there is no network restriction, no need for referrals, and no requirement to use in-network providers. You carry a red, white, and blue Medicare card.

Key Takeaways

  • Traditional Medicare is the federal program itself, not a private insurance plan, and covers hospital care (Part A), doctor visits (Part B), and prescription drugs if you add Part D.
  • You can see any doctor or hospital in the country that accepts Medicare without needing a referral or permission from an insurance company.
  • You pay a monthly premium for Part B, an annual deductible, and coinsurance (usually 20 percent of the cost after you meet the deductible), and the government pays the rest.
  • Traditional Medicare does not cover dental, vision, hearing aids, or long-term care, though you can buy a separate Medigap policy to cover some of these gaps.
  • You must enroll during your initial enrollment period when you first turn 65, or you may face permanent late penalties on your premiums.

How You Pay Under Traditional Medicare

Traditional Medicare costs you money in four ways: premiums, deductibles, coinsurance, and copayments. The Part B premium is deducted from your Social Security check each month (or you pay it directly if you do not receive Social Security). The standard amount changes each year; in 2024 it was $164.90 per month for most people, though higher earners pay more.

Once you use a service, you pay an annual deductible before Medicare starts paying. For Part B in 2024, that deductible was $240. After you meet it, you typically pay coinsurance — usually 20 percent of what Medicare approves — for the rest of the year. For example, if a doctor visit costs $100 and Medicare approves $80, you pay $16 (20 percent of $80) and Medicare pays $64.

Hospital stays under Part A work differently. You pay a deductible for each hospital stay (not per year), and then Medicare covers most costs. If you stay longer than 60 days, you pay coinsurance for days 61 through 90, and even more for days beyond that. Part A has no monthly premium if you or your spouse paid Medicare taxes for at least 10 years while working.

These costs add up, which is why many people buy a Medigap policy — a private insurance plan that covers some or all of the deductibles and coinsurance you would otherwise pay out of pocket.

What Traditional Medicare Covers and Does Not Cover

Traditional Medicare covers medically necessary hospital care, doctor visits, lab work, X-rays, CT scans, physical therapy, and durable medical equipment like wheelchairs and oxygen. It covers preventive services like annual wellness visits, cancer screenings, and vaccinations with no coinsurance. It covers mental health services and substance abuse treatment.

Traditional Medicare does not cover dental care, vision exams, eyeglasses, hearing aids, or routine foot care. It does not cover long-term care in a nursing home or assisted living facility (though it does cover short-term skilled nursing care after a hospital stay). It does not cover most prescription drugs unless you add Part D, a separate prescription drug plan you choose from private insurers.

It also does not cover routine physical exams, cosmetic surgery, or experimental treatments. Hearing aids are a common gap — Medicare does not cover them, though some Medigap plans and Medicare Advantage plans do.

Prescription Drug Coverage Under Part D

Traditional Medicare does not include prescription drug coverage. You must enroll in a Part D plan — a private insurance plan that covers medications — separately. You choose which Part D plan to join during your initial enrollment period or during the annual open enrollment period in October and November.

Part D plans vary widely in which drugs they cover, how much you pay, and which pharmacies you can use. You pay a monthly premium to the insurance company, and then you pay out of pocket for medications until you reach your deductible. After that, you typically pay a copayment or coinsurance per prescription.

If you do not enroll in Part D when you first become may be able to access, you may face a permanent penalty on your premiums if you join later. The penalty is roughly 1 percent of the national average Part D premium for each month you were not covered.

Enrollment and Timing

You enroll in Traditional Medicare through Social Security, either online at ssa.gov, by phone at 1-800-772-1213, or in person at a local Social Security office. Your initial enrollment period is seven months long: three months before the month you turn 65, the month you turn 65, and three months after. If you enroll during this window, your coverage starts the month you turn 65.

If you miss this window, you can still enroll, but your coverage will not start until the following month, and you may owe a permanent penalty on your Part B premium. The penalty is 10 percent of the standard Part B premium for each year you were not enrolled.

You can change your mind about Traditional Medicare and switch to a Medicare Advantage plan during the annual open enrollment period (October 15 to December 7), or you can switch from Medicare Advantage back to Traditional Medicare during the same window.

Medigap: Filling the Gaps in Traditional Medicare

Because Traditional Medicare leaves you responsible for deductibles and coinsurance, many people buy a Medigap policy — also called Medigap insurance — from a private insurance company. Medigap is not the same as Medicare Advantage; it is a supplement that works alongside Traditional Medicare.

Medigap plans are standardized by the federal government and labeled A through N. Each letter covers a different set of gaps. For example, Plan G covers the Part B deductible, coinsurance, and copayments, while Plan N covers most of the same but not the Part B deductible. You pay a monthly premium to the Medigap insurer in addition to your Medicare premiums.

You have the best rates and easiest time getting approved for Medigap during your Medigap open enrollment period, which is six months long starting the month you turn 65 and enroll in Medicare Part B. After that window, insurers can charge you more or deny you based on your health history.

Traditional Medicare vs. Medicare Advantage

The main alternative to Traditional Medicare is Medicare Advantage (also called Part C), which is a private insurance plan that covers everything Traditional Medicare does, plus usually prescription drugs and sometimes dental or vision. With Medicare Advantage, you must use doctors and hospitals in the plan's network (except in emergencies), and you typically need referrals to see specialists.

Medicare Advantage plans often have lower or zero monthly premiums and lower out-of-pocket costs than Traditional Medicare plus Medigap. However, you have less choice of doctors, and you may have to deal with insurance company approvals before getting certain treatments. Traditional Medicare gives you more freedom to see any doctor, but it costs more out of pocket unless you buy Medigap.

You cannot have both Traditional Medicare and Medicare Advantage at the same time. You choose one or the other when you enroll, and you can switch during open enrollment each year.

Frequently Asked Questions

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

You must enroll in Medicare when you turn 65 unless you are still working and covered by your employer's health plan. If you delay enrollment beyond your initial enrollment period, you will face permanent penalties on your premiums. However, you can choose Medicare Advantage instead of Traditional Medicare if you prefer.

Can I see any doctor I want with Traditional Medicare?

Yes. Any doctor or hospital that accepts Medicare can treat you, and you do not need a referral or permission from an insurance company. You can change doctors at any time. The only restriction is that the provider must accept Medicare as payment.

What happens if my doctor does not accept Medicare?

If a doctor does not accept Medicare, you can still see them, but Medicare will not pay, and you will owe the full cost. Some doctors accept Medicare for some patients but not others. Always ask before scheduling whether the doctor accepts Medicare.

Do I need Medigap if I have Traditional Medicare?

Medigap is optional but recommended. Without it, you pay 20 percent coinsurance for most services after meeting your deductible, which can add up quickly. Medigap covers these gaps, though you pay a monthly premium for the coverage.

What is the difference between Part D and Medigap?

Part D covers prescription drugs. Medigap covers deductibles and coinsurance for medical services. You can have both. Part D is required if you want drug coverage; Medigap is optional but helps with medical costs.