Medicare is a federal health insurance program for people 65 and older

Medicare is health insurance 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. Most people who worked in the United States for at least 10 years pay nothing for the basic hospital part — it comes from payroll taxes you already paid.

Medicare is not the same as Medicaid. Medicaid is a separate program run by states and covers people with low income at any age. Some people have both, but they are different programs with different rules.

Key Takeaways

  • Medicare has four parts: Part A covers hospital care, Part B covers doctor visits and outpatient care, Part D covers prescription drugs, and Part C (Medicare Advantage) is an alternative way to get Parts A, B, and D through a private insurance company.
  • You pay nothing for Part A if you or your spouse worked and paid Medicare taxes for at least 10 years; Part B and Part D require monthly premiums.
  • You must sign up for Medicare during your enrollment period, which starts three months before the month you turn 65 and lasts seven months; missing this window can mean paying higher premiums for life.
  • Original Medicare (Parts A and B) has no network — you can see any doctor who accepts Medicare — but you pay a share of costs; Medicare Advantage plans have networks and lower out-of-pocket costs but limit which doctors you can see.
  • Medicare covers some preventive services at no cost, such as annual wellness visits and cancer screenings, but does not cover dental, vision, or hearing aids.

The four parts of Medicare and what each covers

Part A covers inpatient hospital care, skilled nursing facility stays (up to 100 days per benefit period), hospice care, and some home health services. You pay nothing for Part A if you or your spouse paid Medicare taxes while working. If you did not work long enough, you can buy Part A, but the monthly premium is high.

Part B covers doctor visits, outpatient care, lab tests, imaging, physical therapy, and durable medical equipment like wheelchairs and oxygen. Part B requires a monthly premium, which changes each year. In 2024, the standard premium is $164.90 per month, but it is higher if your income is above a certain threshold. You also pay a yearly deductible before Part B coverage begins, and then you pay 20 percent of the cost of most services.

Part D covers prescription drugs. You choose a Part D plan from private insurance companies, and the plan you pick affects which drugs are covered and how much you pay. Part D has a monthly premium and an annual deductible. Like Part B, premiums are higher if your income is above certain limits.

Part C, also called Medicare Advantage, is an alternative to Original Medicare. Instead of getting Parts A and B from the government, you get them through a private insurance company that contracts with Medicare. Medicare Advantage plans usually include Part D (drug coverage) and often add dental, vision, or hearing coverage that Original Medicare does not. The trade-off is that you must use doctors and hospitals in the plan's network, and you may pay more if you see an out-of-network provider.

Original Medicare versus Medicare Advantage

With Original Medicare (Parts A and B), you can see any doctor or hospital in the United States that accepts Medicare. There is no network. You pay a share of the cost — a deductible, coinsurance, and copays — but you have freedom to choose your providers. If you want drug coverage, you must sign up for a separate Part D plan.

With Medicare Advantage, you join a private plan that covers Parts A, B, and usually D. The plan has a network of doctors and hospitals. If you see someone outside the network, you pay more or the plan may not cover it at all. However, Medicare Advantage plans often have lower monthly premiums and lower out-of-pocket costs than Original Medicare plus a Part D plan. Some plans cover dental, vision, or hearing — services Original Medicare does not cover.

Neither choice is right for everyone. Original Medicare gives you more freedom but may cost more out of pocket. Medicare Advantage limits your choices but often costs less upfront. Your decision depends on which doctors you want to see, how much medical care you expect to need, and whether you want dental or vision coverage.

When and how to sign up for Medicare

You must sign up during your Initial Enrollment Period, which is seven months long: it starts three months before the month you turn 65 and ends three months after. For example, if you turn 65 in June, your enrollment period runs from March through September.

You can sign up online at Medicare.gov, by phone at 1-800-MEDICARE (1-800-633-4227), or in person at your local Social Security office. If you sign up during your enrollment period, coverage begins the month you turn 65 (or the first day of the month you turn 65, depending on your birthday).

If you miss your enrollment period, you can still sign up, but you may pay a late enrollment penalty for the rest of your life. The penalty is a percentage of the Part B premium for each month you were may be able to access but did not sign up. For Part D, the penalty is based on how long you went without coverage. The only way to avoid the penalty is to have had other health insurance (such as coverage through an employer) that was as good as Medicare.

What Medicare costs

Part A costs nothing for most people. Part B has a monthly premium (the standard amount in 2024 is $164.90, but it changes yearly and is higher for higher incomes), a yearly deductible ($240 in 2024), and then you pay 20 percent of the cost of covered services.

Part D premiums vary by plan and change yearly. You also pay an annual deductible (which varies by plan) and then a share of drug costs. Once your total drug spending reaches a certain amount in a year, you enter a coverage gap where you pay more out of pocket. After you spend enough out of pocket, catastrophic coverage kicks in and you pay a small copay for the rest of the year.

Medicare Advantage plans have monthly premiums (some have zero premium), annual deductibles, and copays or coinsurance for services. The costs vary widely by plan and by location. If your income is above certain thresholds, you pay higher premiums for Parts B and D, and some Medicare Advantage plans also charge more.

What Medicare does and does not cover

Medicare covers hospital stays, doctor visits, lab tests, imaging, physical therapy, mental health services, and some preventive care such as annual wellness visits, cancer screenings, and vaccinations. It covers some home health services and hospice care. If you need skilled nursing care after a hospital stay, Medicare covers up to 100 days per benefit period.

Medicare does not cover dental care, vision care (including eyeglasses and contact lenses), hearing aids, long-term custodial care in a nursing home, or most prescription drugs (unless you have Part D). It does not cover routine foot care, most cosmetic surgery, or acupuncture. Some Medicare Advantage plans add dental, vision, or hearing coverage, but Original Medicare does not.

How to find doctors and check coverage

If you have Original Medicare, you can see any doctor or hospital that accepts Medicare. To find one, use the Medicare Provider Search tool on Medicare.gov. You can search by location and specialty. Before you see a doctor, ask whether they accept Medicare and whether they are accepting new patients.

If you have Medicare Advantage, you must use doctors and hospitals in your plan's network. Your plan will send you a list of in-network providers, or you can search on the plan's website or call the plan's customer service number.

To check whether a specific service or drug is covered, call Medicare at 1-800-MEDICARE or log into your Medicare account on Medicare.gov. You can also ask your doctor's office — they often know what Medicare covers.

Frequently Asked Questions

Do I have to sign up for Medicare when I turn 65?

Yes, you must sign up during your Initial Enrollment Period, which is seven months long and starts three months before you turn 65. If you do not sign up and do not have other health insurance that is as good as Medicare, you will pay a late enrollment penalty for the rest of your life.

Can I have both Original Medicare and Medicare Advantage?

No. You choose one or the other. If you have Original Medicare and want to switch to Medicare Advantage, you can do so during the Annual Enrollment Period (October 15 to December 7 each year). If you have Medicare Advantage and want to switch to Original Medicare, you can also switch during this period, but you must sign up for Part D at the same time if you want drug coverage.

What happens if I do not sign up for Part D when I first turn 65?

If you do not sign up for Part D during your Initial Enrollment Period and do not have other drug coverage, you will pay a late enrollment penalty each month for the rest of your life. The penalty is added to your Part D premium. You can sign up for Part D during the Annual Enrollment Period, but the penalty will still explore.

Does Medicare cover my medications?

Part D covers prescription drugs, but which drugs are covered depends on the plan you choose. Each plan has a formulary — a list of covered drugs. You can search for your medications on Medicare.gov or call your Part D plan to find out whether they are covered and how much you will pay.

Can I use my Medicare in other countries?

Medicare generally does not cover care outside the United States, except in very limited situations such as emergency care in Canada or Mexico if you are traveling from the United States. If you travel internationally, you may want to buy supplemental travel insurance that covers medical care abroad.