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 division of the U.S. Department of Health and Human Services. It pays doctors, hospitals, and other providers when you receive care. You do not buy Medicare directly from a private company — it is a government program funded through payroll taxes and premiums you pay.

Most people become may be able to access at age 65. If you worked and paid Medicare taxes for at least 10 years (40 quarters), you may have access to automatically. If you did not work that long, you can still enroll, but your premiums will be higher. Some people under 65 may have access to if they have been receiving Social Security disability benefits for 24 months, or if they have end-stage renal disease or ALS (amyotrophic lateral sclerosis).

Medicare has four parts, and they cover different things. Understanding what each part does helps you know what costs you will and will not pay yourself.

Key Takeaways

  • Medicare Part A covers hospital stays, skilled nursing facility care, hospice, and some home health services.
  • Medicare Part B covers doctor visits, outpatient care, medical equipment, and preventive services like screenings and vaccines.
  • Medicare Part D covers prescription drugs, and you choose a plan from private insurers approved by Medicare.
  • You enroll in Medicare during your Initial Enrollment Period, which starts three months before the month you turn 65 and lasts nine months total.
  • If you delay enrollment without a valid reason, you may pay higher premiums for the rest of your life.

Part A: Hospital and Facility Care

Part A covers inpatient hospital care, skilled nursing facility stays, hospice care, and some home health services. You do not pay a monthly premium for Part A if you or your spouse paid Medicare taxes for 40 quarters. If you did not work that long, you can still enroll, but you will pay a monthly premium — the amount depends on how many quarters of work history you have.

When you use Part A, you pay a deductible — a set amount you pay out of pocket before Medicare starts paying. For a hospital stay in 2024, the deductible is $1,632 for the first 60 days. If you stay longer, you pay a daily amount called coinsurance. These dollar amounts change each year. After 90 days in the hospital, you enter what Medicare calls "lifetime reserve days" — you have 60 of these over your entire lifetime, and you pay a higher coinsurance amount for each one you use.

Part A does not cover private-duty nursing, a private hospital room (unless medically necessary), or personal care like bathing and dressing in your own home. If you need long-term care in a nursing home, Part A covers only the first 100 days under specific conditions — you must have been hospitalized for at least three days first, and the care must be for a condition related to that hospital stay.

Part B: Doctor Visits and Outpatient Care

Part B covers doctor office visits, outpatient hospital services, medical equipment like wheelchairs and oxygen, and preventive care such as cancer screenings, vaccines, and annual wellness visits. You pay a monthly premium for Part B — in 2024, the standard premium is $164.90 per month, though higher earners pay more. The amount changes each year.

After you pay your annual deductible (in 2024, $240), Medicare pays 80 percent of most services and you pay 20 percent. This is called coinsurance. For some preventive services — like mammograms, colonoscopies, and flu shots — you pay nothing after you meet your deductible, and sometimes you pay nothing at all.

Part B does not cover routine dental care, eyeglasses, hearing aids, or long-term care. It also does not cover services that are not medically necessary, such as cosmetic surgery. If you see a doctor who does not accept Medicare, you may pay more out of pocket, though some doctors will still see you and bill Medicare directly.

Part D: Prescription Drug Coverage

Part D is prescription drug coverage offered by private insurance companies approved by Medicare. You choose a plan from the options available in your area — plans vary in which drugs they cover, what pharmacies you can use, and how much you pay. There is no single "Medicare Part D" plan; instead, you pick one that fits your medications and budget.

You pay a monthly premium for whichever Part D plan you choose. After you pay your annual deductible (which varies by plan), you pay a copay or coinsurance for each prescription — the amount depends on the drug and your plan. Once you and Medicare together spend a certain amount on drugs in a year, you enter the "donut hole," a coverage gap where you pay a larger share of drug costs. After you spend enough out of pocket, catastrophic coverage kicks in and Medicare pays most of the cost.

You must enroll in Part D when you first become may be able to access for Medicare, or during the annual enrollment period (October 15 to December 7). If you go without Part D coverage when you are may be able to access, you may pay a penalty for each month you were not enrolled — this penalty is added to your premium permanently.

Part C: Medicare Advantage Plans

Part C, also called Medicare Advantage, is an alternative to Original Medicare (Parts A and B). Instead of enrolling in Part A and Part B separately, you enroll in a private insurance plan approved by Medicare. The plan must cover everything Part A and Part B cover, but it may offer extra benefits like dental, vision, or fitness programs.

Medicare Advantage plans often have lower or zero monthly premiums than Original Medicare, but they usually have network restrictions — you must use doctors and hospitals in the plan's network, except in emergencies. They also have out-of-pocket maximums, meaning once you spend a certain amount in a year, the plan pays 100 percent of covered services for the rest of that year.

If you choose Medicare Advantage, you still need Part D coverage for prescription drugs unless your plan includes it. You can switch between Original Medicare and Medicare Advantage during the annual enrollment period, which runs October 15 to December 7 each year.

When and How to Enroll

Your Initial Enrollment Period begins three months before the month you turn 65 and lasts for nine months total — three months before, the month you turn 65, and three months after. You can enroll online at Medicare.gov, by phone at 1-800-MEDICARE, or in person at your local Social Security office.

If you are still working and covered by your employer's health plan when you turn 65, you may be able to delay enrolling in Medicare without penalty. This is called creditable coverage. When you do enroll, you have eight months after your coverage ends to sign up without penalty. If you miss this window and do not have a valid reason, you will pay a permanent penalty on your premiums.

If you miss your Initial Enrollment Period, you can enroll during the General Enrollment Period, which runs January 1 to March 31 each year. Coverage begins July 1. However, your premiums will be higher — you pay a 10 percent penalty for each 12-month period you were may be able to access but not enrolled in Part B, and a similar penalty for Part D.

Costs You Pay Under Medicare

Medicare is not free. You pay premiums (monthly fees), deductibles (a set amount before coverage begins), and coinsurance or copays (your share of the cost when you use services). The exact amounts change each year and depend on which parts of Medicare you use and which plan you choose.

Part A has no monthly premium for most people, but you pay a deductible and coinsurance for hospital and facility stays. Part B costs a monthly premium plus a deductible and 20 percent coinsurance for most services. Part D premiums vary by plan. If you choose Original Medicare (Parts A and B), you may want to buy a Medigap policy — a private insurance plan that covers some of the costs Medicare does not, such as coinsurance and deductibles. Medigap plans have their own premiums.

Your actual costs depend on how much care you use. Someone who rarely sees a doctor pays mainly premiums and deductibles. Someone with chronic conditions or frequent hospital stays may pay more in coinsurance and copays. Understanding your expected health care needs helps you choose whether Original Medicare with Medigap, or Medicare Advantage, will cost you less.

Frequently Asked Questions

Do I have to enroll in Medicare at 65 if I am still working?

If your employer has 20 or more employees and you are covered by their health plan, you can delay enrolling in Part B without penalty. You must enroll within eight months after your coverage ends. Part A enrollment is optional if you have creditable coverage, but many people enroll anyway because Part A has no monthly premium.

What is the difference between Original Medicare and Medicare Advantage?

Original Medicare is Parts A and B run by the federal government — you can see any doctor who accepts Medicare. Medicare Advantage is a private plan that covers the same services but usually requires you to use doctors in the plan's network. Medicare Advantage often costs less per month but may cost more when you use care.

Can I change my Medicare plan after I enroll?

Yes, during the annual enrollment period from October 15 to December 7, you can switch between Original Medicare and Medicare Advantage, or change your Part D plan. Changes take effect January 1. Outside this window, you can change plans only if you have a may have access to life event, such as moving out of your plan's service area.

What happens if I do not enroll in Part D when I become may be able to access?

If you go without Part D coverage when you are first may be able to access for Medicare, you will pay a permanent penalty — roughly 1 percent of the national average Part D premium for each month you were not enrolled. This penalty is added to your premium for as long as you have Medicare.

Does Medicare cover dental, vision, or hearing?

Original Medicare does not cover routine dental, vision, or hearing services. Some Medicare Advantage plans include these benefits, though coverage is usually limited. You can also buy standalone dental, vision, or hearing plans from private insurers.