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Medicare
What is Medicare
Medicare is a federal health insurance program that serves people 65 years of age or older and certain younger people with disabilities and end-stage renal disease (ESRD). It was created in 1965 to provide health coverage for Americans aged 65 and older. Medicaid, on the other hand, is both a federal and state-funded assistance program that helps low-income people of every age with healthcare costs.
Parts of Medicare
When you first sign up for Medicare and during certain times of the year, you can choose which way to get your Medicare coverage. There are 2 main ways:
Original Medicare
- Original Medicare includes Part A and Part B.
- You can join a separate Medicare drug plan to get Medicare drug coverage (Part D).
- You can use any doctor or hospital that takes Medicare, anywhere in the U.S.
- You can also shop for and buy supplemental coverage that helps pay your out-of-pocket costs (like your 20% coinsurance).
Part A (Hospital Insurance)
Part A helps cover inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care.
Part B (Medical Insurance)
Part B helps cover:
- Services from doctors and other health care providers
- Outpatient care
- Home health care
- Durable medical equipment (like wheelchairs, walkers, hospital beds, and other equipment)
- Many preventive services (like screenings, shots or vaccines, and yearly “Wellness” visits)
Medicare Advantage (also known as Part C)
- Medicare Advantage is a Medicare-approved plan from a private company that offers an alternative to Original Medicare for your health and drug coverage. These “bundled” plans include Part A, Part B, and usually Part D.
- In many cases, you can only use doctors who are in the plan’s network.
- Plans often have different out-of-pocket costs than Original Medicare or supplemental coverage like Medigap. You may also have an additional premium.
- Plans may offer some extra benefits that Original Medicare doesn’t.
Part D (Drug coverage)
Part D helps cover the cost of prescription drugs (including many recommended shots or vaccines).
You join a Medicare drug plan in addition to Original Medicare, or you get it by joining a Medicare Advantage Plan with drug coverage.
Plans that offer Medicare drug coverage are run by private insurance companies that follow rules set by Medicare.Medicare Supplemental Insurance (Medigap)
Extra insurance you can buy from a private company that helps pay your share of costs in Original Medicare. Policies are standardized, and in most states named by letters, like Plan G or Plan K. The benefits in each lettered plan are the same, no matter which insurance company sells it.
What’s the difference between Medicare & Medicaid?
Medicare is federal health insurance for anyone age 65 and older, and some people under 65 with certain disabilities or conditions. Medicaid is a joint federal and state program that provides health coverage for some people with limited income and resources. Medicaid offers benefits, like nursing home care, personal care services, and assistance paying for Medicare premiums and other costs.
If you qualify, you can have both Medicare and Medicaid.
What does Medicare cost?
Generally, you pay a monthly premium for Medicare coverage and part of the costs each time you get a covered service. There’s no yearly limit on what you pay out-of-pocket, unless you have supplemental coverage, like a Medicare Supplement Insurance (Medigap) policy, or you join a Medicare Advantage Plan.
Costs for Part A (Hospital Insurance)
| Costs: | What you pay in 2025: |
|---|---|
| Part A Premium |
$0 for most people (because they paid Medicare taxes long enough while working - generally at least 10 years). This is sometimes called “premium-free Part A.” If you don’t qualify for a premium-free Part A, you might be able to buy it. In 2025, the premium is either $285 or $518 each month, depending on how long you or your spouse worked and paid Medicare taxes.
|
| Part A Deductible |
$1,676 for each time you’re admitted to the
hospital per benefit period, before Original Medicare
starts to pay. There's no limit to the number of benefit periods you can have. |
|
Inpatient stays (copayments) |
Days 1-60: $0 after you pay your Part A deductible Days 61-90: $419 each day Days 91-150: $838 each day while using your 60 lifetime reserve days After day 150: You pay all costs |
Costs for Part B (Medical Insurance)
| Costs: | What you pay in 2025: |
|---|---|
| Part B Premium |
$185 each month (or higher depending on your
income). The amount can change each year. How much is the Part B late enrollment penalty?
|
| Part B Deductible |
You’ll pay $257, before Original Medicare starts to pay. You
pay this deductible once each year. |
| Costs for services (coinsurance) | You’ll usually pay 20% of the cost for each Medicare-covered service or item after you’ve paid your deductible. |
Get help with Part A & Part B costs
If you have limited income and resources, you may be able to get help from your state to pay your premiums and other costs, like deductibles, coinsurance, and copays.
Costs for plans & supplemental coverage
Drug coverage (Part D):
| Costs: | What you pay in 2025: |
|---|---|
| Part D Premium |
Monthly premiums vary based on which plan you join. The
amount can change each year. You might pay a penalty if you:
How much is the Part D penalty?
|
| When you get prescription drugs |
Most plans charge a deductible, an amount you pay before the plan starts to pay, for prescriptions you fill. The deductible amount varies based on which plan you join. Your actual costs vary depending on the medicines you take, if they are on your plan’s list of covered drugs, and which pharmacy you use. |
Get help with drug costs
If you have limited income and resources, you may be able to get Extra Help to pay your plan premiums and other drug costs (like deductibles, coinsurance, and copays). If you qualify, you won’t have to pay the Part D late enrollment penalty.
Medicare Advantage Plan (Part C):
- Monthly premiums vary based on which plan you join. The amount can change each year.
- You must keep paying your Part B premium to stay in your plan.
- Deductibles, coinsurance, and copayments vary based on which plan you join.
- Plans also have a yearly limit on what you pay out-of-pocket. Once you pay the plan’s limit, the plan pays 100% for covered health services for the rest of the year.
Medicare Supplement Insurance (Medigap):
- Monthly premiums vary based on which policy you buy, where you live, and other factors. The amount can change each year.
- You must keep paying your Part B premium to keep your supplement insurance.
- Helps lower your share of costs for Part A and Part B services in Original Medicare.
- Some Medigap policies include extra benefits to lower your costs, like coverage when you travel out of the country.
How does Medicare work?
Generally, you only need to sign up for Part A and Part B once. Each year, you can choose which way you get your health coverage (and add or switch drug coverage).
Medicare is different from private insurance — it doesn’t offer plans for couples or families. You don’t have to make the same choice as your spouse.
2 steps to set up your Medicare coverage:
- Sign up for
and
- Part A (Hospital Insurance)
- Part B (Medical Insurance)
- Choose which way you want to get your Medicare health coverage
You can choose either of these for your health coverage.
- Original Medicare
- Medicare Advantage (Part C)
If you choose Original Medicare, you’ll also decide if you want drug coverage (Part D) and supplemental coverage, like Medigap
How does Original Medicare work?
Original Medicare includes two parts:
Original Medicare covers most, but not all of the costs for approved health care services and supplies. After you meet your deductible, you pay your share of costs for services and supplies as you get them. There’s no limit on what you’ll pay out-of-pocket in a year unless you have other coverage (like Medigap, Medicaid, employer, retiree, or union coverage).
- Part A (Hospital Insurance)
- Part B (Medical Insurance)
Services covered by Medicare must be medically necessary. Medicare also covers many preventive services, like shots and screenings. If you go to a doctor or other health care provider that accepts the Medicare-approved amount, your share of costs may be less. If you get a service that Medicare doesn’t cover, you pay the full cost.
With Original Medicare, you can:
- Go to any doctor or hospital that takes Medicare, anywhere in the U.S.
- Join a separate Medicare drug plan (Part D) to get drug coverage.
- Buy a Medicare Supplement Insurance (Medigap) policy to help lower your share of costs for services you get.
If you're not lawfully present in the U.S., Medicare won't pay for your Part A and Part B claims, and you can't enroll in a Medicare Advantage Plan or a Medicare drug plan.
How does Medicare Advantage work?
Medicare Advantage bundles your Part A, Part B, and usually Part D coverage into one plan. Plans may offer some extra benefits that Original Medicare doesn’t cover — like vision, hearing, and dental services.
You join a plan offered by Medicare-approved private companies that follow rules set by Medicare. Each plan can have different rules for how you get services, like needing referrals to see a specialist. Costs for monthly premiums and services you get vary depending on which plan you join.
Plans must cover all emergency and urgent care, and almost all medically necessary services Original Medicare covers. Some plans tailor their benefit packages to offer additional benefits to treat specific conditions.
With Medicare Advantage, you:
- Need to use doctors who are in the plan’s network (for non-emergency or non-urgent care).
- May pay a premium for the plan in addition to the monthly Part B premium. Plans may have a $0 premium or may help pay all or part of your Part B premiums.
- Can’t buy separate supplemental coverage (like Medigap).
How does Medicare work with my other insurance?
When you have Medicare and other health insurance (like from your job), one will pay first (called a “primary payer”) and the other second (called a “secondary payer”).
If you have other insurance, who pays first depends on a number of items, like if you’re still working, the type of insurance you have, and if you have a special situation, like End-Stage Renal Disease (ESRD).
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