What Is Medicare?
Medicare is a federal health insurance program primarily for people age 65 and older, as well as certain younger individuals with disabilities or specific conditions like End-Stage Renal Disease (ESRD). Unlike private insurance, Medicare is divided into four separate parts, each handling a different category of care.
Medicare Part A: Hospital Insurance
Part A covers inpatient hospital stays, skilled nursing facility (SNF) care, hospice care, and some home health services. Most people don't pay a monthly premium for Part A if they or their spouse paid Medicare taxes while working for at least 10 years.
What it covers:
- Inpatient hospital care (semi-private room, meals, general nursing)
- Skilled nursing facility stays following a qualifying hospital stay
- Hospice care for terminal illness
- Limited home health care
Note: Part A does have cost-sharing — including a deductible per benefit period and daily coinsurance for extended SNF stays.
Medicare Part B: Medical Insurance
Part B covers outpatient care, preventive services, doctor visits, lab tests, mental health services, and durable medical equipment (DME). Part B does require a monthly premium, which is income-adjusted.
What it covers:
- Doctor office visits and specialist consultations
- Outpatient procedures and surgery
- Preventive screenings, vaccines, and annual wellness visits
- Mental health services and substance use treatment
- Durable medical equipment (wheelchairs, walkers, etc.)
Medicare Part C: Medicare Advantage
Part C, also called Medicare Advantage, is an alternative way to receive your Medicare benefits. Instead of Original Medicare (Parts A and B), you enroll in a private insurance plan approved by Medicare. These plans must cover everything Parts A and B cover, and many include additional benefits.
Key features:
- Often includes prescription drug coverage (Part D)
- May offer dental, vision, and hearing benefits
- Usually structured as HMOs or PPOs with network restrictions
- May have lower out-of-pocket costs than Original Medicare for some enrollees
Medicare Part D: Prescription Drug Coverage
Part D adds prescription drug coverage to Original Medicare. It's offered through private insurers approved by Medicare. If you have a Medicare Advantage plan that includes drug coverage, you generally don't need a separate Part D plan.
How it works:
- Each Part D plan has a formulary (list of covered drugs) with different cost tiers
- Monthly premiums vary by plan
- A late enrollment penalty applies if you don't sign up when first eligible and don't have other creditable drug coverage
Original Medicare vs. Medicare Advantage: Quick Comparison
| Feature | Original Medicare (A + B) | Medicare Advantage (Part C) |
|---|---|---|
| Provider flexibility | Any Medicare-accepting provider | Usually network-restricted |
| Drug coverage | Requires separate Part D plan | Often included |
| Extra benefits (dental, vision) | Not included | Commonly included |
| Out-of-pocket maximum | No cap (Medigap can help) | Has annual cap |
When to Enroll
Your Initial Enrollment Period (IEP) spans the 7-month window around your 65th birthday (3 months before, the month of, and 3 months after). Delaying enrollment without qualifying coverage can result in permanent late enrollment penalties. If you're still working and have employer coverage, you may be able to delay without penalty — but confirm the rules with Medicare directly.