The Essential Lowdown on Medicare Basics: 4 Things to Get You Started

Key Takeaways

• Medicare is a federal health insurance program primarily for people aged 65 and older, but younger individuals with certain disabilities or conditions may also qualify.

• Understanding the different parts of Medicare—Part A, Part B, Part C, and Part D—can help you make informed decisions about your healthcare coverage.

Understanding Medicare: What It Is and Who It Covers

If you’re approaching 65 or dealing with certain medical conditions, you might be wondering how Medicare fits into your healthcare plans. Medicare is the federal health insurance program designed mainly for seniors, but it also covers some younger individuals with disabilities or specific health conditions. Knowing whether you qualify and how to enroll is crucial to ensuring you get the coverage you need.

Who Qualifies for Medicare?

Medicare eligibility is mostly age-based, but it also extends to individuals under 65 who meet specific criteria. You qualify for Medicare if:

• You are 65 years or older and either a U.S. citizen or a legal permanent resident who has lived in the country for at least five years.

• You are under 65 but have a qualifying disability, such as end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS).

• You or your spouse have worked and paid Medicare taxes for at least 10 years (40 quarters).

If you meet the requirements, you are automatically enrolled in Medicare Parts A and B when you turn 65 if you are already receiving Social Security or Railroad Retirement Board benefits. Otherwise, you will need to sign up manually during your Initial Enrollment Period.

Breaking Down the Different Parts of Medicare

Medicare consists of four key components: Part A, Part B, Part C, and Part D. Each part covers different healthcare services, and choosing the right combination depends on your medical needs and financial situation.

Part A: Hospital Insurance

Part A covers inpatient hospital stays, skilled nursing facility care, hospice, and some home healthcare services. It is generally premium-free if you or your spouse have paid Medicare taxes for at least 10 years. However, there are cost-sharing requirements like deductibles and coinsurance.

Part B: Medical Insurance

Part B covers outpatient services, including doctor visits, preventive care, durable medical equipment, and some home healthcare services. Unlike Part A, Part B requires a monthly premium, and you will also be responsible for an annual deductible and 20% coinsurance for most services.

Part C: Medicare Advantage Plans

Part C, also known as Medicare Advantage, is an alternative to Original Medicare (Parts A and B). These plans are offered by private insurance companies approved by Medicare and often include additional benefits, such as vision, dental, and hearing coverage. You must still pay your Part B premium when enrolled in a Medicare Advantage plan.

Part D: Prescription Drug Coverage

Medicare Part D helps cover the cost of prescription medications. It is available as a standalone plan that can be added to Original Medicare or included as part of a Medicare Advantage plan. Part D plans have premiums, deductibles, and copays, which vary based on the specific plan you choose.

When and How to Enroll in Medicare

Knowing when to enroll in Medicare is just as important as understanding the coverage options. Missing your enrollment period could result in late penalties or gaps in coverage.

Initial Enrollment Period (IEP)

Your first opportunity to enroll in Medicare is during the seven-month Initial Enrollment Period, which starts three months before your 65th birthday, includes your birthday month, and ends three months after.

General Enrollment Period (GEP)

If you miss your IEP, you can sign up during the General Enrollment Period, which runs from January 1 to March 31 each year. Coverage starts on July 1, and you may face late penalties.

Special Enrollment Period (SEP)

If you have employer coverage past 65, you may qualify for a Special Enrollment Period when that coverage ends. This allows you to enroll in Medicare without facing penalties.

How Much Does Medicare Cost?

Medicare costs vary depending on the parts you choose, your income, and whether you qualify for financial assistance.

Part A Costs

• Premium: Most people get Part A for free, but those who don’t qualify for premium-free coverage may pay up to $518 per month in 2025.

• Deductible: The inpatient hospital deductible is $1,676 per benefit period in 2025.

• Coinsurance: After 60 hospital days, you pay $419 per day (days 61-90) and $838 per day for lifetime reserve days.

Part B Costs

• Premium: The standard Part B premium in 2025 is $185 per month.

• Deductible: The annual deductible is $257.

• Coinsurance: Typically 20% of the Medicare-approved amount for covered services.

Part D Costs

• Deductible: Up to $590 in 2025.

• Out-of-Pocket Cap: Medicare Part D has a $2,000 cap on out-of-pocket drug costs in 2025.

Choosing the Right Medicare Coverage for Your Needs

Selecting the right Medicare plan depends on various factors, including your budget, medical needs, and prescription drug usage. Here are some important considerations:

• Do you want additional benefits? If you need vision, dental, or hearing coverage, Medicare Advantage (Part C) may be a good option.

• Do you take multiple prescriptions? A Part D plan is essential for covering medication costs.

• Do you want provider flexibility? Original Medicare allows you to see any doctor nationwide that accepts Medicare, while Medicare Advantage typically has network restrictions.

What Happens After You Enroll?

Once enrolled, you will receive a Medicare card that you will need to present when receiving medical services. You can also:

• Review your Annual Notice of Change (ANOC): This document outlines any changes to your Medicare plan for the upcoming year.

• Consider Medigap: If you stick with Original Medicare, you might want a Medigap (Medicare Supplement) policy to help cover out-of-pocket costs.

• Monitor Your Benefits: Keep track of your coverage and costs to ensure your Medicare plan continues to meet your healthcare needs.

Making the Most of Your Medicare Coverage

To get the most out of Medicare, take advantage of preventive services, review plan options annually during Open Enrollment (October 15 – December 7), and reach out to licensed professionals for assistance when needed.

Need Help Choosing the Right Medicare Plan?

Medicare can be complex, but you don’t have to navigate it alone. Getting in touch with a licensed agent listed on this website can help you compare plans, understand your options, and ensure you get the best coverage for your healthcare needs.