Medicare is a federal health insurance program for people 65 and older, some younger people with disabilities, and people with end-stage renal disease

Medicare is run by the Centers for Medicare & Medicaid Services (CMS), a federal agency. It pays for hospital stays, doctor visits, prescription drugs, and other medical care. You do not have to be retired to get Medicare — you become may be able to access at 65 regardless of whether you still work. Some people under 65 also may have access to: those who have received Social Security disability benefits for 24 months, those with ALS (Lou Gehrig's disease), and those with end-stage renal disease.

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 Medicare and Medicaid — they are called "dual may be able to access." This guide focuses on Medicare.

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 must sign up for Medicare during your enrollment period or pay a penalty for late sign-up that lasts as long as you have Medicare.
  • Most people pay a monthly premium for Part B and Part D, and all parts have deductibles and copayments you pay when you use care.
  • Original Medicare (Parts A and B) lets you see any doctor who accepts Medicare, while Medicare Advantage plans (Part C) usually require you to use doctors in their network.

The four parts of Medicare and what each one covers

Part A covers inpatient hospital care, skilled nursing facility care (nursing home care after a hospital stay), hospice care, and some home health care. Most people do not pay a monthly premium for Part A if they or their spouse paid Medicare taxes while working. Part A has a deductible — the amount you pay before Medicare starts paying — and you pay copayments for each day you stay in the hospital after the first few days.

Part B covers doctor visits, outpatient care, medical equipment, and preventive services like screenings and vaccines. Part B has a monthly premium that changes each year. In 2024, the standard premium is $164.90 per month, but the amount varies based on your income. Part B also has a yearly deductible and a 20 percent copayment for most services after you meet the deductible.

Part D covers prescription drugs. You choose a Part D plan from private insurance companies, and the monthly premium and the drugs covered vary by plan. Part D has a deductible, a coverage gap (sometimes called the "donut hole") where you pay more out of pocket, and a catastrophic coverage phase where Medicare pays most costs.

Part C, also called Medicare Advantage, is an alternative to Original Medicare. A private insurance company provides Part A, Part B, and usually Part D coverage under one plan. Medicare Advantage plans often have lower premiums than Original Medicare, but they usually require you to use doctors in their network and may require referrals to see specialists. Part C plans have different deductibles and copayments than Original Medicare.

Original Medicare versus Medicare Advantage

Original Medicare is the traditional program run directly by the federal government. You have Part A and Part B, and you choose a separate Part D plan for drugs. You can see any doctor, hospital, or specialist who accepts Medicare — you do not need a referral. You pay a deductible and copayments, and Medicare pays its share of the cost. Original Medicare covers care anywhere in the United States.

Medicare Advantage is an alternative run by private insurance companies. The company receives a payment from Medicare for each person enrolled, and in return provides all the coverage of Parts A, B, and usually D. Most Medicare Advantage plans are HMOs or PPOs, which means they have networks of doctors and hospitals. You usually must use doctors in the network, and you may need a referral to see a specialist. Some plans cover dental, vision, or hearing aids — benefits Original Medicare does not cover. However, you can only use the plan's coverage in its service area, so Medicare Advantage is not ideal if you travel or split time between states.

Neither choice is right for everyone. Original Medicare gives you more freedom to choose doctors but requires you to manage two separate enrollments (Part B and Part D). Medicare Advantage simplifies enrollment and may offer extra benefits, but limits your choice of doctors and may cost more if you need care outside the network.

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

You become may be able to access for Medicare three months before the month you turn 65. Your Initial Enrollment Period is seven months long: it starts three months before your 65th birthday month and ends three months after. During this time, you can sign up for Part A and Part B without penalty.

If you do not sign up during your Initial Enrollment Period, you will pay a late enrollment penalty. For Part B, the penalty is 10 percent of the standard premium for each 12-month period you were may be able to access but not enrolled. This penalty is permanent — you pay it for as long as you have Medicare. For Part D, the penalty is 1 percent of the national average Part D premium for each month you were may be able to access but not enrolled. This penalty also stays with you.

There is one exception: if you or your spouse are still working and covered by a group health plan through that job, you may be able to delay Part B sign-up without penalty. You must sign up within eight months of losing that coverage or retiring, whichever comes first. This is called the Special Enrollment Period. Part D has a similar rule for people with creditable drug coverage through an employer.

If you have Medicare Advantage or a Medigap plan (supplemental insurance), you have a yearly chance to change plans during the Annual Enrollment Period, which runs from October 15 to December 7 each year. Changes take effect January 1.

How much Medicare costs

Medicare costs vary by part and by your income. Part A has no monthly premium for most people, but it has a deductible of $1,632 per benefit period in 2024 (this amount changes yearly). After you meet the deductible, you pay copayments for hospital stays.

Part B has a monthly premium. The standard premium in 2024 is $164.90, but if your income is above a certain level, you pay more — up to $560.50 per month for the highest earners. Part B also has a yearly deductible of $240 in 2024 and a 20 percent copayment for most services.

Part D premiums vary by plan and range from zero to over $100 per month. You pay the premium, a deductible (usually $35 to $100), and copayments for drugs. Once you spend $5,030 out of pocket in 2024, you enter the coverage gap, where you pay 25 percent of drug costs until you reach $7,781 in total spending. After that, Medicare pays most costs.

Part C premiums vary widely. Some plans have no premium, while others charge $50 to $200 or more per month. You still pay the Part B premium even if you choose Part C. Part C plans have deductibles and copayments that differ from Original Medicare.

Many people with low income and limited resources may be able to get help paying Medicare costs through programs like the Medicare Savings Program or Extra Help (for Part D). These are run by your state, and you can learn more by calling 1-800-MEDICARE.

What Medicare does not cover

Medicare does not cover dental care, vision care (including eyeglasses and contacts), hearing aids, or long-term care in a nursing home or at home. It does not cover most routine foot care, acupuncture, or cosmetic surgery. Prescription drugs are only covered if you have Part D or a Medicare Advantage plan that includes drug coverage.

Some people buy Medigap (supplemental insurance) to cover costs that Original Medicare does not pay, such as copayments and deductibles. Medigap is sold by private insurance companies and is separate from Medicare. If you have Medicare Advantage, you cannot buy Medigap.

If you need coverage for dental, vision, or hearing, you can buy it separately through a private insurance company, or you can choose a Medicare Advantage plan that includes these benefits.

How to get more information about your specific situation

Medicare rules are complex, and your situation may be different from someone else's. You can call 1-800-MEDICARE (1-800-633-4227) to speak with a representative who can answer questions about your coverage, help you understand your costs, and tell you about programs that may help you pay for care. The line is open 24 hours a day, seven days a week. You can also visit Medicare.gov to compare plans, read your coverage details, and find local resources.

If you are turning 65 soon, Social Security will send you information about Medicare enrollment. Read it carefully, because missing your enrollment important date can cost you money for the rest of your life.

Frequently Asked Questions

Do I have to take Medicare when I turn 65?

You do not have to take Medicare, but if you do not sign up during your Initial Enrollment Period and you do not have a valid reason to delay, you will pay a late enrollment penalty for as long as you have Medicare. If you are still working and covered by your employer's health plan, you may be able to delay without penalty — ask your employer's benefits office.

Can I switch from Original Medicare to Medicare Advantage or back again?

Yes. You can switch during the Annual Enrollment Period (October 15 to December 7 each year), and the change takes effect January 1. You can also switch if you have a may have access to life event, such as moving out of your plan's service area or losing other health coverage. Call 1-800-MEDICARE to learn about your situation qualifies.

What is the difference between Medicare and Social Security?

Medicare is health insurance. Social Security is a retirement, disability, and survivor benefit program that provides monthly income. You can have one without the other. Most people sign up for both around age 65, but you can delay Social Security while starting Medicare, or vice versa.

If I have Medicare Advantage, can I see any doctor I want?

Most Medicare Advantage plans are HMOs or PPOs with networks of doctors and hospitals. You usually must use doctors in the network, and you may need a referral to see a specialist. Some plans allow out-of-network care but charge you more. Check your plan's provider directory to see which doctors are in your network.

What happens to my Medicare if I move to another state?

Original Medicare (Parts A and B) works in all 50 states, so you can move without losing coverage. If you have Medicare Advantage or a Medigap plan, you may need to switch plans because they are usually limited to a specific service area. Call your plan or 1-800-MEDICARE before you move to understand your options.