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. Medicare is not the same as Medicaid — Medicare is based on age, while Medicaid is based on income and is run by states.

You do not automatically get Medicare when you turn 65. You have to sign up during your enrollment period, which starts three months before the month you turn 65 and lasts until three months after. If you miss this window, you may pay a penalty for as long as you have Medicare.

Most people do not pay a monthly premium for Part A (hospital insurance) if they or their spouse paid Medicare taxes while working. Part B (doctor and outpatient care) has a monthly premium that changes each year. Part D (prescription drug coverage) and supplemental plans also have premiums that vary by plan.

Key Takeaways

  • Medicare starts at age 65 and covers hospital care, doctor visits, and prescription drugs through different parts.
  • You must sign up during your enrollment period — three months before through three months after the month you turn 65 — or face a lifetime penalty.
  • Medicare has four parts: Part A (hospital), Part B (doctor), Part D (drugs), and optional supplemental coverage to fill gaps.
  • You can choose between Original Medicare (Parts A and B) plus a separate drug plan, or a Medicare Advantage plan that bundles coverage.

The four parts of Medicare and what each covers

Part A covers inpatient hospital stays, skilled nursing facility care after a hospital stay, hospice care, and some home health services. You pay a deductible for each hospital stay, and if your stay is longer than 60 days, you pay a daily coinsurance amount. Most people do not pay a monthly premium for Part A.

Part B covers doctor visits, outpatient care, medical equipment, and preventive services like screenings and vaccines. You pay a monthly premium, an annual deductible, and then 20 percent of the cost of most services after you meet the deductible. Your Part B premium is based on your income from two years ago, so it can change if your income changes.

Part D is prescription drug coverage. You choose a plan from private insurance companies, and each plan covers a different list of drugs at different costs. You pay a monthly premium, and your costs for drugs depend on which plan you pick and which drugs you take. Part D has a coverage gap (sometimes called the "donut hole") where you pay more out of pocket after you and your plan have spent a certain amount.

You can also buy supplemental insurance (called Medigap) to cover costs that Original Medicare does not pay, such as coinsurance and deductibles. These plans are sold by private insurers and have their own monthly premiums.

Original Medicare versus Medicare Advantage

When you turn 65, you choose between two ways to get Medicare coverage. Original Medicare is the traditional program run directly by the federal government. You use any doctor or hospital that accepts Medicare, and you pay the costs outlined in Parts A and B. You then choose a separate Part D plan for prescription drugs. Many people also buy Medigap to cover the gaps in Original Medicare.

Medicare Advantage (Part C) is an alternative offered by private insurance companies. These plans bundle Parts A, B, and usually D into one plan. They often have lower monthly premiums and out-of-pocket costs than Original Medicare plus Medigap, but they usually require you to use doctors and hospitals in their network. Some Medicare Advantage plans include dental, vision, or hearing coverage that Original Medicare does not offer.

You can switch between Original Medicare and Medicare Advantage during the Annual Enrollment Period, which runs from October 15 to December 7 each year. Changes take effect January 1. If you switch to Medicare Advantage and then want to go back to Original Medicare, you may have a limited window to do so without penalty.

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

Your Initial Enrollment Period is seven months long: it starts three months before the month you turn 65, includes the month you turn 65, and ends three months after. You can sign up online at Medicare.gov, by phone at 1-800-MEDICARE, by mail, or in person at your local Social Security office.

If you do not sign up during this window, you can sign up later during the General Enrollment Period, which runs January 1 to March 31 each year. However, you will owe a penalty for each month you were may be able to access but not signed up. For Part B, the penalty is 10 percent of the standard premium for each year you were late. For Part D, the penalty is 1 percent of the national average premium for each month you were late. These penalties stay with you for life.

There are exceptions: if you have health insurance through your job or your spouse's job, you may be able to delay signing up without penalty. You must sign up within eight months of losing that coverage. If you are still working and covered by an employer plan, talk to your employer's benefits office before your 65th birthday to understand your options.

How much Medicare costs

Part A has no monthly premium for most people, but you pay a deductible of $1,676 per benefit period in 2024 (this amount changes each year). If your hospital stay lasts more than 60 days, you pay $419 per day for days 61 through 90, and $838 per day for days 91 and beyond.

Part B has a monthly premium that varies by income. In 2024, the standard premium is $174.70 per month, but if your income is higher, you pay more. You also pay an annual deductible of $240 and then 20 percent of the cost of most services. These amounts change each year.

Part D premiums depend on which plan you choose and range widely. The average is around $30 to $100 per month, but some plans cost more or less. You also pay out-of-pocket costs for drugs that vary by plan and by which drugs you take.

Medigap premiums vary by plan and by insurance company. Plans that cover more costs have higher premiums. You can compare plans and costs at Medicare.gov or by calling 1-800-MEDICARE.

What to ask your doctor and when to call Medicare

Before your 65th birthday, ask your current doctor whether they accept Medicare. Ask about any ongoing treatments or prescriptions you take and whether they will be covered. If you are considering Medicare Advantage, ask whether your doctor is in the plan's network.

After you enroll, call Medicare at 1-800-MEDICARE if you have questions about your coverage, if you receive a bill you think is wrong, or if you want to report fraud. You can also visit Medicare.gov to view your claims, check your coverage, and find doctors and hospitals in your area.

Call your insurance company (the company that runs your Medicare Advantage plan or your Medigap plan) if you have questions about your specific plan's costs or coverage. Call your pharmacy if you have questions about your Part D coverage or the cost of a prescription.

Frequently Asked Questions

Do I have to sign up for Medicare at 65 if I am still working?

If you are still working and covered by your employer's health plan, you can delay signing up for Part B without penalty. You must sign up within eight months of leaving your job or losing coverage. Part A has no penalty for late enrollment if you have employer coverage, but you should still sign up when you become may be able to access to avoid gaps in coverage.

Can I change my Medicare plan after I sign up?

Yes, during the Annual Enrollment Period from October 15 to December 7, you can switch between Original Medicare and Medicare Advantage, change your Part D plan, or change your Medigap plan. Changes take effect January 1. If you switch to Medicare Advantage and then want to go back to Original Medicare within 12 months, you may be able to do so.

What if I cannot afford the monthly premiums?

If your income is low, you may be able to get help paying Part B and Part D premiums through programs like the Medicare Savings Program or the Low-Income Subsidy. Contact your state Medicaid office or call 1-800-MEDICARE to learn whether you may be may be able to access for these programs.

Does Medicare cover dental, vision, or hearing?

Original Medicare does not cover routine dental, vision, or hearing care. However, some Medicare Advantage plans include these benefits. If these services are important to you, compare Medicare Advantage plans to see which ones offer them, or budget for paying out of pocket.

What happens if I move to a different state?

Your Medicare coverage works in all 50 states and U.S. territories. However, if you have a Medicare Advantage plan or Medigap plan, you may need to switch plans if your new state is outside your plan's service area. Contact your plan or call 1-800-MEDICARE to find out what plans are available where you are moving.