- Written by Terry Turner
Senior Financial Writer and Financial Wellness Facilitator
Terry Turner has more than 35 years of journalism experience, including covering benefits, spending and congressional action on federal programs such as Social Security and Medicare. He is a Certified Financial Wellness Facilitator through the National Wellness Institute and the Foundation for Financial Wellness and a member of the Association for Financial Counseling & Planning Education (AFCPE®).Read More
- Edited ByLamia Chowdhury
Lamia Chowdhury is a financial content editor for RetireGuide and has over three years of marketing experience in the finance industry. She has written copy for both digital and print pieces ranging from blogs, radio scripts and search ads to billboards, brochures, mailers and more.Read More
- Reviewed ByMichael Jones
Medicare Expert and Owner of Grand Anchor Insurance Solutions
Michael Jones is a licensed insurance agent who manages his own agency called Grand Anchor Insurance Solutions. In addition to being a Medicare expert, Michael specializes in other insurance products such as voluntary benefits for employees of businesses.Read More
- Published: April 16, 2020
- Updated: October 20, 2023
- 14 min read time
- This page features 16 Cited Research ArticlesKey Takeaways
- Medicare is divided into four different parts. Parts A and B make up Original Medicare, Part C is often known as Medicare Advantage (which is provided by private insurers) and Part D is prescription drug insurance.
- Original Medicare (Parts A and B) is a federal health plan that becomes available once you turn 65 years old. Original Medicare does not cover everything. Routine prescription drugs, dental, vision and hearing are a few of the necessary services not covered.
- You generally pay a deductible for your health care before Medicare pays its share. Medicare will then take over and you pay the coinsurance or copayment for covered services and supplies.
- There are optional Medicare plans that you can purchase during select enrollment periods. These plans cover the additional health care costs not covered by Original Medicare. These plans vary by state and include Medicare Advantage plans, supplement insurance (Medigap) and Part D prescription drug coverage.
Medicare is the most common form of health care coverage for seniors. The program provides a way for older Americans to have their health needs taken care of after they retire from the workforce.
The Medicare program was originally founded in 1965. At that time, what is now known as Original Medicare was created. The first major expansion to the program came seven years later, when people with disabilities or end-stage renal disease (ESRD) became qualified for coverage.
Part C was originally established in 1997 and was first known as the Medicare+Choice program. It took on its modern form and was renamed as Medicare Advantage a few years later in 2003. Part D, prescription drug insurance, took effect starting in 2006.
The Medicaid program was founded at the same time as Medicare. Medicaid was originally created to provide insurance to those who needed cash assistance but has been expanded beyond that since. The program is separate from Medicare and exists today to provide health care to low-income Americans.
The basics of Medicare include both plans that are provided by the federal government and ones that are available through private insurers. Different types of plans can cover different parts of your health care.There is no reason to only stay with Original Medicare. Consider looking into either a Medicare Advantage plan or a Medicare Supplement plan to take care of the costs that Original Medicare does not cover.
Understanding Medicare Coverage Plans
Medicare is divided into four parts, named alphabetically from Part A through Part D.
Parts A and B are sometimes referred to as Original Medicare. Parts C and D are newer options. Generally, you can get coverage through Original Medicare or through Medicare Advantage plans if you qualify.
Medicare Advantage plans require that you live in the service area of the plan you want to join.Have you selected your 2024 Medicare plan?Maximize your Medicare savings by connecting with a licensed insurance agent. Annual Enrollment is open until December 7th.
What Is Original Medicare?
Original Medicare is provided through the federal government. Americans are typically eligible to enroll in Original Medicare when they turn 65. It is divided into Parts A and B, which each handle different parts of your health care.
It’s important to remember that Original Medicare does not cover everything, with notable areas like vision and dental coverage excluded.
Medicare Part A
Medicare Part A is hospital insurance. It covers the costs of a hospital or nursing facility stay, but does not cover long-term care. Each part will cover different types of services.Part A Covered Services
- Inpatient hospital stays
- Inpatient care in a skilled nursing facility
- Home health care
- Hospice care
Part A does not cover the costs of treatments you receive while in the hospital. That falls under Part B.
Medicare Part B
Medicare Part B is medical insurance that covers doctor visits. It also covers the costs of what the Centers for Medicare and Medicaid Services (CMS) calls medically necessary services and preventative services.
Medically necessary services include supplies, tests or other services needed to diagnose and treat your medical condition. Preventative services include health care required to detect and treat a condition early on.Part B-Covered Services
- Doctor visits
- Durable medical equipment
- Ambulance services
- Diagnostic tests
Medicare Advantage plans can sometimes include coverage for services that go beyond the scope of Original Medicare.
Medicare Advantage Plans (Part C)
Medicare Part C is also called Medicare Advantage, a form of private insurance. Enrollment in Part C is voluntary.
These plans are sold through insurance firms that are contracted with the federal government. All Medicare Advantage plans must provide the same coverage as Medicare Part A and Part B, but other benefits vary from plan to plan.
Most Medicare Advantage plans also offer prescription drug coverage. Medicare Advantage plans may also bundle coverage beyond what Original Medicare plans cover and may include vision, hearing and dental coverage.What Can Medicare Advantage Include?
- Vision coverage
- Dental coverage
- Prescription drug coverage
- Other additional benefits
Medicare Advantage plans are provided regionally, so specific benefits and coverage available can vary based on where you live and the plans that are sold in your area.3 Minute Quiz: Can You Retire Comfortably?Take our free quiz & match with a financial advisor in 3 easy steps. Tailored to your goals. Near you or online.
Medicare Part D Prescription Drug Plans
Medicare Part D covers the cost of prescription drugs and is provided through private insurers. People who enroll in Part D pay a monthly premium. It covers the prescription drugs you buy at your local or mail-order pharmacy.
Most states have more than two dozen private insurers to choose from for Part D coverage. You can often receive prescription drug coverage through a Medicare Advantage plan, essentially combining Parts C and D.
You can also purchase a standalone drug plan to pair with Original Medicare. Different Part D plans come with their own formulary, and there may be some variety in what drugs they cover.
If you do not enroll in a drug plan or an Advantage plan with drug coverage, you will pay a penalty for the time that you did not have credible drug coverage.
Medicare Supplement Plans (Medigap)
A Medicare Supplement plan, commonly known as Medigap, is an additional coverage option to Original Medicare.
Medicare Part A and Part B only covers 80 percent of services. Adding a Medigap plan covers the remaining 20 percent, eliminating coinsurance or copayments as well as some additional out-of-pocket costs.What Medigap Can Cover
These policies are sold by private insurance companies. If you have Medicare Advantage, you cannot pair your coverage with supplemental insurance. Medigap is only meant to help with Original Medicare.
How To Compare Medicare Plans
When comparing Medicare plans, one of the first things to determine is how much money you are willing or able to spend on your health care coverage. This can help you narrow down your initial options.How To Choose a Medicare Plan
- Determine how much you can spend on health care.
- Figure out what treatments, services or coverage are most important to you.
- Look into Original Medicare and Medigap.
- Compare Medicare Advantage and Part D plans available in your area.
- Compare plan ratings.
- Ensure your doctors are in network.
- Make sure your plan covers your medications.
Medicare Advantage plans and Part D plans also come with a star rating system based on what they provide and how well they do. Be sure to take star ratings into account when choosing between plans.
It’s also important to continuously compare plans each year during enrollment periods. Coverage and plans available near you can change year to year, opening new and potentially better coverage options.Never Miss Important News or Updates with Our Weekly NewsletterGet money-saving tips, hard-to-find info and tactics for a successful retirement in our free weekly newsletter.
Medicare Enrollment and Eligibility
Most people are eligible for Medicare Parts A and B when they turn 65. But there are some exceptions. You will have to pay premiums for Part B.TipFind out if you are eligible for Medicare and how much your expected premium would cost with the Medicare.gov Eligibility Tool.Source: U.S. Centers for Medicare & Medicaid Services
You should sign up during your 65th birthday month or sometime in the three months before or after your birthday month. If you miss this window, you may face permanent financial penalties.
If you are eligible for Medicare — and already receiving Social Security benefits — you’ll be automatically enrolled in Medicare when you turn 65. Otherwise, you will have to manually enroll in Medicare on your own.
How to Enroll in Medicare
The best time to enroll in Medicare is when you first become eligible. You’ll enroll through the Social Security Administration. There are three options.Three Ways To Enroll in Medicare
- Online at the Social Security website. It takes less than 10 minutes, according to the Social Security Administration.
- A toll-free phone call to 1-800-772-1213 from 7 a.m. to 7 p.m., Monday through Friday. Deaf and partially deaf people can call TTY 1-800-325-0778.
- In person at your local Social Security office, but you are required to call first to make an appointment.
Most people also qualify for Medicare Parts A without having to pay premiums when they turn 65.
But if you or your spouse didn’t pay Medicare taxes while working, you may have to pay Part A premiums. But you have to be a U.S. citizen or legal permanent resident and 65 or older. In that case, you may be eligible to buy Medicare Part A coverage.
You can also qualify for premium-free Medicare Part A if you are under 65 and require dialysis or are a kidney transplant patient. People younger than 65 diagnosed with Lou Gehrig’s disease (ALS) also qualify the first month after they receive disability benefits.
Medicare Enrollment Periods
There are several periods during which you can enroll in Medicare depending on your circumstances.
- Initial Medicare Enrollment Period
- Runs from the three months leading up to your 65th birthday to the three months after.
- General Medicare Enrollment Period
- Runs from Jan. 1 to Mar. 31 and can be used if you missed your initial enrollment window.
- Special Enrollment Period
- Only available under specific circumstances, like a move or sudden loss of coverage.
Medicare Costs and Coverage
There are costs and fees associated with Medicare. These include premiums, deductibles and coinsurance. You may also pay penalties for waiting to enroll in Medicare Part B.
Most people don’t have to pay a premium for Medicare Part A because they paid for it through years of payroll taxes while they worked.Definitions to Know
- Your monthly payment in exchange for coverage.
- The amount you have to pay for medical care or prescriptions before Medicare Part A, Part B, Part D or your Medicare Advantage plan starts to pay.
- A cost you may be required to pay for your share of medical services after paying any deductibles. It’s usually measured as a percentage of the bill.
- Lifetime Reserve Day
- Additional days Medicare pays for when you are in a hospital for more than 90 days. You have 60 of these for your entire lifetime. Medicare pays all covered costs, except coinsurance, for each of these days you use.
Medicare premiums are updated annually and depend on a variety of factors. Economic and political factors have a high influence on Medicare changes.Out-of-Pocket Medicare Costs in 2024
Part A Premium
- Most people pay no premium
- Up to $505/month (in 2024) if you buy Part A coverage
- $505/month if you worked and paid Medicare taxes for fewer than 30 quarters (7.5 years)
- $278/month if you worked and paid Medicare taxes for 30 to 39 quarters (7.5 to 9.75 years)
Part A Hospital Inpatient Deductible and Coinsurance
- $1,632 deductible per year
- $0 coinsurance for first 60 days you’re hospitalized
- $408 coinsurance for days 61 to 90 of your hospitalization
- $816/day coinsurance per each lifetime-reserve day after day 90 in the hospital
- All costs for anything beyond all remaining lifetime-reserve days (you have 60)
Part B Premium
- $174.70 – It may be higher if you have a higher income
Part B Deductible and Coinsurance
- $240 deductible
- 20 percent of all costs after your deductible is met
Part C Premium
- Monthly premiums vary by plan
Part D Premium
- Monthly premiums vary by plan
- People with higher incomes pay higher premiums
What Medicare Does Not Cover
Medicare Parts A and B do not cover everything. Medicare Advantage plans may offer extra benefits that Original Medicare does not cover.Services and Items Not Covered by Medicare Parts A and B
- Long-term (custodial) care
- Most dental care
- Routine eye exams for prescription lenses
- Cosmetic surgery
- Hearing aids and hearing aid exams
- Routine foot care
The most expensive thing Medicare Parts A and B does not cover is long-term care. Medicaid, another federal health insurance, will sometimes cover these costs, but generally only for low-income Americans with little or no savings.
Medical Treatments Covered Under Medicare
Original Medicare can cover a wide range of treatments for several different conditions or ailments. The guiding principle for much of Medicare’s coverage is that a treatment considered a medical necessity should be covered.
Whether something is medically necessary can sometimes be up for interpretation, but there are several areas that Parts A and B can be counted on to provide coverage for.Examples of Conditions and Treatments Covered Under Medicare
- COPD Treatment
- End-Stage Renal Disease
- Heart Disease
- Hip and Knee Replacements
- Medically Necessary Surgery
Parts A and B can cover many treatments for several conditions if care for them is shown to be medically necessary. Also keep in mind that Medicare rarely covers the entire cost of a treatment. You may still have to pay a significant amount out of pocket depending on the type of care you are receiving.
There are some situations where Original Medicare can cover the diagnosis of a condition, but not necessarily treatment for it. For example, you would be covered for a bone density test to determine if you have osteoporosis, but drugs to treat it would only be covered if you had a Part D plan as well.Have you selected your 2024 Medicare plan?Maximize your Medicare savings by connecting with a licensed insurance agent. Annual Enrollment is open until December 7th.
How To Contact Medicare Customer Service
There are several different ways to get in contact with Medicare Customer Service if you have questions about your plan or want to resolve an issue.
Medicare can be reached by phone at 1-800-MEDICARE (1-800-633-4227) at any time of day. You can also contact Medicare by sending a letter by mail or by emailing them. When calling, make sure you have your Medicare card ready and a way to take notes or record the information you get.
You can call Medicare to resolve several issues, from cost and billing information to coverage or medical record questions.
Frequently Asked Questions About MedicareHow do I get a Medicare card?If you are automatically enrolled because you are already drawing Social Security benefits, you will receive your card three months before your 65th birthday or your 25th month of drawing disability benefits. If you enroll online, by phone or at your local Social Security office, you’ll receive your card in the mail.Does Medicare cover dental and vision?Original Medicare, Parts A and B, do not cover dental and vision. But a Medicare Advantage plan (Part C) may cover them. You should ask about the coverage your Part C plan offers before you purchase it.What is the difference between Medicare and Medicaid?Both Medicare and Medicaid are administered by the same federal agency, the Centers for Medicare and Medicaid Services. Medicare is a federal health insurance program for people 65 and older, or younger than 65 if they have a disability. Medicaid is a joint state and federal program that provides health insurance coverage to people with very low incomes.Can I have Both Medicare and Medicaid?Some people may qualify for both Medicare and Medicaid at the same time. This is called “dual eligibility.” Dually eligible beneficiaries must be eligible for Medicare and meet the low income and limited financial resources requirements of Medicaid to qualify for both programs.Is Medicare mandatory?Medicare is not mandatory but most people choose to have it if they qualify. There are reasons you may want to delay enrolling in Medicare. This includes continuing to work after 65 and remaining on your employer health plan or wanting to continue contributing to a Health Savings Account — also called an HSA. But lapses in coverage after you turn 65 may lead to financial penalties when you later choose to enroll in Medicare.Advertisement
Connect With a Financial Advisor InstantlyLast Modified: October 20, 2023
16 Cited Research Articles
- National Council on Aging. (2023, October 13). What You'll Pay in Out-of-Pocket Medicare Costs in 2024. Retrieved from https://www.ncoa.org/article/what-you-will-pay-in-out-of-pocket-medicare-costs-in-2024
- Centers for U.S. Medicare & Medicaid Services. (2023, October 12). 2024 Medicare Parts A & B Premiums and Deductibles. Retrieved from https://www.cms.gov/newsroom/fact-sheets/2024-medicare-parts-b-premiums-and-deductibles
- U.S. Centers for Medicare & Medicaid Services. (2023, September 26). Medicare Advantage and Medicare Prescription Drug Programs to Remain Stable in 2024. Retrieved from https://www.cms.gov/newsroom/press-releases/medicare-advantage-and-medicare-prescription-drug-programs-remain-stable-2024?wpisrc=nl_health202
- U.S. Centers for Medicare & Medicaid Services. (2023, July 31). Center for Medicare. Retrieved from https://www.cms.gov/files/document/july-31-2023-parts-c-d-announcement-pdf.pdf
- U.S. Centers for Medicare & Medicaid Services. (2023, July 31). Yearly Deductible for Drug Plans. Retrieved from https://www.cms.gov/newsroom/fact-sheets/cms-releases-2024-projected-medicare-part-d-premium-and-bid-information
- U.S. Centers for Medicare & Medicaid Services. (2023). Catastrophic coverage. Retrieved from https://www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/catastrophic-coverage
- U.S. Centers for Medicare & Medicaid Services. (2023). Costs in the Coverage Gap. Retrieved from https://www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/costs-in-the-coverage-gap
- U.S. Centers for Medicare & Medicaid Services. (2023). Costs of Medigap Policies. Retrieved from https://www.medicare.gov/costs-of-medigap-policies
- U.S. Centers for Medicare and Medicaid Services. (2022, August 15). Trustees Report & Trust Funds. Retrieved from https://www.cms.gov/OACT/TR/2021
- U.S. Centers for Medicare and Medicaid Services. (n.d.). Preventive & Screening Services. Retrieved from https://www.medicare.gov/coverage/preventive-screening-services
- U.S. Centers for Medicare and Medicaid Services. (n.d.). What’s Medicare? Retrieved from https://www.medicare.gov/what-medicare-covers/your-medicare-coverage-choices/whats-medicare
- U.S. Centers for Medicare and Medicaid Services. (n.d.). What Medicare Health Plans Cover. Retrieved from https://www.medicare.gov/what-medicare-covers/what-medicare-health-plans-cover
- U.S. Centers for Medicare and Medicaid Services. (n.d.). What’s Not Covered by Part A & Part B? Retrieved from https://www.medicare.gov/what-medicare-covers/whats-not-covered-by-part-a-part-b
- U.S. Centers for Medicare and Medicaid Services. (n.d.). What Part A Covers. Retrieved from https://www.medicare.gov/what-medicare-covers/what-part-a-covers
- U.S. Centers for Medicare and Medicaid Services. (n.d.). What Part B Covers. Retrieved from https://www.medicare.gov/what-medicare-covers/what-part-b-covers
- U.S. Department of Health and Human Services. (2014, September 11). Who is Eligible for Medicare? Retrieved from https://www.hhs.gov/answers/medicare-and-medicaid/who-is-elibible-for-medicare/index.html
- Edited By
Calling this number connects you to one of our trusted partners.
If you're interested in help navigating your options, a representative will provide you with a free, no-obligation consultation.
Our partners are committed to excellent customer service. They can match you with a qualified professional for your unique objectives.
We/Our Partners do not offer every plan available in your area. Any information provided is limited to those plans offered in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.888-694-0290