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Medicare 101

Medicare 101: A Guide to the Basics
Medicare is the federal health insurance program primarily for people age 65 and older, but it also covers certain younger individuals with disabilities and those with end-stage renal disease (ESRD).

What Is Medicare?
Medicare helps cover a wide range of health care services, from hospital stays and doctor visits to prescription drugs and preventive services. It’s divided into parts that offer different types of coverage — each playing a specific role in your overall health care protection.

The Parts of Medicare
Part A – Hospital Insurance
Part A covers inpatient hospital stays, care in skilled nursing facilities, hospice care, and some home health services. Most people pay no monthly premium for Part A if they or their spouse paid Medicare taxes while working.

Part B – Medical Insurance
Part B helps cover doctor visits, preventive care, outpatient care, diagnostic tests, durable medical equipment, and certain vaccines. It usually requires a monthly premium and has a deductible and coinsurance cost for most services.

Part C – Medicare Advantage
Also known as Medicare Advantage, Part C is offered by private insurance companies approved by Medicare. These plans combine Part A and Part B coverage and often include Part D prescription drug coverage. Many Advantage plans also provide extra benefits like dental, vision, and hearing care.

Part D – Prescription Drug Coverage
Part D helps pay for prescription medications and is available through private insurers. Beneficiaries can enroll in a standalone Part D plan or get it through a Medicare Advantage plan that includes drug coverage .

Medicare Coverage Options
There are two main paths for Medicare coverage:

  • Original Medicare (Parts A & B) ~ Managed by the federal government. You can add Part D drug coverage and a Medigap policy to help pay out-of-pocket costs. You can see any doctor that accepts Medicare; no annual out-of-pocket limit but flexible provider choice.
  • Medicare Advantage (Part C) ~ Offered by private insurers and includes Parts A, B, often D, and sometimes extra benefits like dental and hearing. Usually has lower monthly premiums but network restrictions; includes an annual out-of-pocket maximum.
Medicare Supplement (Medigap)

For those who choose Original Medicare, Medigap policies—offered by private companies—help cover costs that Medicare doesn’t, such as deductibles, coinsurance, and copayments. Medigap plans are standardized and labeled A through N, with coverage varying by plan type.

Enrollment Basics
Most people become eligible for Medicare at age 65. You can first enroll during your Initial Enrollment Period, which spans three months before, the month of, and three months after your 65th birthday. Those already receiving Social Security benefits are automatically enrolled in Parts A and B .

If you delay enrollment without other creditable coverage, you may face late enrollment penalties for Parts B and D.

Key Takeaways
  • Medicare provides foundational health coverage for older adults and certain younger individuals with qualifying conditions.
  • You can choose Original Medicare or Medicare Advantage as your main plan type.
  • Part D covers medications, while Medigap helps with cost gaps in Original Medicare.
  • Enrollment timing is critical to avoid penalties and ensure uninterrupted coverage.
Medicare can seem complex at first, but understanding its structure and your options helps ensure you make the best choices for your health care and budget