Medicare

Medicare is the federal health insurance program for adults aged 65 and older, certain younger adults with disabilities, and individuals with End-Stage Renal Disease or ALS. Approximately 65 million Americans are enrolled in Medicare. Understanding Medicare's structure — its four parts and multiple enrollment decisions — is essential for maximizing coverage and minimizing costs.

Part A: Hospital Insurance

Part A covers inpatient hospital care, skilled nursing facility care following a qualifying hospital stay, hospice care, and some home health care. Most people don't pay a premium for Part A if they or their spouse worked and paid Medicare taxes for at least 10 years. Part A does have a deductible (per benefit period) and cost-sharing for longer inpatient stays.

Part B: Medical Insurance

Part B covers outpatient medical care — doctor visits, preventive services, outpatient surgery, durable medical equipment, and mental health care. Part B requires a monthly premium (the standard amount is set annually by CMS, with higher-income beneficiaries paying more through IRMAA). Part B has an annual deductible and 20% coinsurance after the deductible for most services — with no out-of-pocket maximum, making supplemental coverage important for those with significant health needs.

Part C: Medicare Advantage

Medicare Advantage (MA) plans are offered by private insurers approved by Medicare. They must cover at least the same benefits as Original Medicare (Parts A and B) and typically include Part D drug coverage, often with additional benefits (vision, dental, hearing). MA plans use network structures (HMO or PPO) and typically have lower out-of-pocket costs for in-network care but network restrictions. Beneficiaries enrolled in MA cannot use Original Medicare supplemental (Medigap) plans.

Part D: Prescription Drug Coverage

Part D provides prescription drug coverage through private plans. Enrollment is optional but delayed enrollment without creditable coverage incurs a late enrollment penalty. Plans vary significantly in which drugs they cover (formulary) and at what cost tiers — comparing Part D plans at Medicare.gov's plan finder before enrollment is strongly recommended.

Medigap (Medicare Supplement)

Medigap policies are sold by private insurers to cover Original Medicare's gaps — the deductibles, coinsurance, and out-of-pocket costs that Medicare doesn't cover. Medigap plan types are standardized by letter (Plan G and Plan N are most commonly purchased currently). The best time to purchase Medigap is during the six-month open enrollment period beginning when you turn 65 and enroll in Part B — during this period, insurers cannot deny coverage or charge more for pre-existing conditions.

Related: Medicaid · How Health Insurance Works · Behavioral Health Coverage