Medicare 101
Everything You Need to Know About Medicare
Medicare is your health insurance once you turn 65. It's a federal program that helps cover your medical costs. Like most healthcare plans, it doesn't cover everything, and costs can vary widely depending on your location and specific healthcare needs.
Medicare is a complex system with vast amounts of information and numerous options that can be difficult to navigate. Understanding the Medicare basics will help you make informed decisions about your healthcare and avoid costly mistakes.
This comprehensive Medicare guide is a different type of senior resource center. One that's designed to help you worry less and live more.
What You'll Find Here
This resource center dives into all the Medicare basics to help seniors and their families by providing clear, reliable information without the sales pressure.
Our goal is simple:
To help you understand Medicare basics by providing clear, straightforward information, including how and when you qualify, how to get the best possible coverage, and what to expect in terms of costs and enrollment dates.
We've organized everything you need to know into easy-to-understand sections that you can explore at your own pace.
How to Qualify for Medicare
See how to qualify for Medicare and when you can take advantage of it.
Who gets Medicare? It's pretty straightforward. You qualify for Medicare if you:
Are 65 or older
Most people become eligible at 65, regardless of whether they're still working or how much they earn.
Are under 65 with a qualifying disability
After receiving disability benefits for a minimum of 24 months.
Have end-stage kidney disease or ALS at any age
At any age if you have end-stage kidney disease or ALS.
Can green card holders get Medicare?
Yes, green card holders who have lived in the U.S. for at least five years and meet the work requirements can qualify for Medicare, unless this has changed as of the current press time in the U.S.
Important Medicare Enrollment Dates
When and how you can sign up, switch plans, or make changes to your existing coverage throughout the year.
Automatic Enrollment:
If you're already receiving Social Security benefits when you turn 65, you'll automatically be enrolled in Parts A and B. You'll receive your Medicare card in the mail.
Manual Enrollment:
If you're not receiving Social Security, you need to actively participate in Medicare enrollment through Social Security (online, by phone, or in person). Many people work with a Medicare insurance agent to help navigate their options and ensure proper enrollment.
When to Enroll:
Your Initial Enrollment Period is a 7-month window: 3 months before your 65th birthday month and 3 months after. Missing this window can result in late enrollment penalties and gaps in coverage.
Still Working at 65?
If you have employer health insurance, you may be able to delay Medicare enrollment without penalties. However, the rules are complex, so check with your HR department and Medicare before making this decision.
Initial Enrollment Period (7-Month Window)
Your Initial Enrollment Period includes: 3 months before your 65th birthday month, your birthday month, and 3 months after. Missing this window can result in late enrollment penalties and gaps in coverage.
Annual Enrollment Period (October 15 - December 7)
- •Change Medicare Advantage plans
- •Switch between Original Medicare and Medicare Advantage
- •Change prescription drug plans
Medicare Advantage Open Enrollment (January 1 - March 31)
- •Switch Medicare Advantage plans
- •Or return to Original Medicare
Missing Deadlines Can Mean:
- • Late enrollment penalties that last as long as you have Medicare
- • Gaps in coverage
- • Limited ability to make changes later
The Four Parts of Medicare and Medigap
The Four Parts of Medicare
Medicare consists of four distinct parts, each covering different aspects of healthcare:
Hospital Insurance
Your "big ticket" medical events
What it covers:
- • Hospital stays (inpatient care)
- • Skilled nursing facility care (after a hospital stay)
- • Hospice care
- • Some home health services
What you need to know:
- • Most people get this FREE if they or their spouse worked and paid Medicare taxes for 10+ years
- • Deductible for 2026 is $1,736, with a 20% coinsurance for most services
- • Automatic enrollment at age 65 if you're already getting Social Security
- • No monthly premium for most people, but you do pay deductibles and coinsurance when you use services
- • This alone isn't enough healthcare coverage - it doesn't cover doctor visits, prescriptions, or preventive care
Medical Insurance
Your everyday healthcare needs
What it covers:
- • Doctor visits and outpatient care
- • Preventive services (mammograms, colonoscopies, annual wellness visits)
- • Medical equipment (wheelchairs, oxygen, etc.)
- • Ambulance services
- • Some outpatient prescription drugs from a doctor's office
What you need to know:
- • You pay a monthly premium: the standard premium is $202.90 in 2026
- • The income-related monthly adjustment (IRMAA) surcharge will be added if you make above a certain income threshold
- • You choose to enroll, and it's not automatic unless you're already getting Social Security
- • Sign up during your Initial Enrollment Period to avoid late penalties
- • Annual deductible and 20% coinsurance on most services
- • No coverage limit - meaning if you have expensive medical needs, you could pay 20% of some very large bills
Medicare Advantage (The All-in-One Alternative)
Private insurance that replaces Medicare Parts A & B, plus additional benefits
Medicare Advantage plans are private health insurance plans paid by the federal government to provide Medicare-covered benefits as an alternative to "traditional" or "original" Medicare. Medicare Advantage plans include everything Medicare Parts A & B cover, often with extras.
What you need to know:
- • You must have or be eligible for Medicare Parts A & B first to enroll in Medicare Advantage
- • Often includes prescription drug coverage (Part D) built in
- • May also include extras like dental, vision, hearing aids, fitness memberships
- • Network restrictions - you typically must use their doctors and hospitals
- • Lower out-of-pocket costs than Original Medicare, with annual spending caps
- • Monthly premiums vary - many plans have $0 premiums beyond your Part B premium
- • You can switch back to Original Medicare during certain times of the year
Prescription Drug Coverage
Outpatient prescription medications
Starting in 2025, the Medicare Prescription Payment Plan allows beneficiaries to spread out-of-pocket prescription drug costs across the calendar year instead of paying all at once at the pharmacy.
What you need to know:
- • Separate monthly premium (averages around $55/month but varies by plan)
- • Only available through private insurance companies - no government-run option
- • Voluntary but recommended - there is a late enrollment penalty if you wait
- • Since 2025: a yearly cap on out-of-pocket prescription drug costs, $2,100 in 2026
- • Formulary Exemptions enable Medicare beneficiaries to request coverage for drugs not on their plan's list
Guide to Medigap
Medigap (Medicare Supplement Insurance) is private insurance designed to fill the "gaps" in Original Medicare coverage. Here's how it fits into the Medicare system:
Why you might need it: Original Medicare typically covers about 80% of approved medical costs, leaving you responsible for the remaining 20% plus deductibles. Without a cap on out-of-pocket expenses, these costs can add up significantly.
- Not a fifth part: It's private insurance that works alongside Original Medicare (Parts A and B)
- Only works with Original Medicare: Never with Medicare Advantage
- Cannot combine: If you have Medicare Advantage, you cannot have Medigap
What Medigap Covers
Part A gaps include:
- • Hospital deductibles ($1,736 in 2026)
- • Coinsurance for extended hospital stays
- • Skilled nursing facility coinsurance
- • First three pints of blood
Part B gaps include:
- • Annual deductible ($283 in 2026)
- • 20% coinsurance on most services
- • Excess charges when doctors charge more than Medicare-approved amounts
Medigap Plan Types
Medigap policies are standardized and labeled with letters (A, B, C, D, F, G, K, L, M, N). Plan G and Plan N are currently the most popular because Plans C and F are no longer available to new Medicare beneficiaries.
Common Medicare Plan Options
There are lots of Medicare options, but we'll break down the two most common plan combinations out there.
Option 1
Original Medicare (Parts A + B) + Separate Part D
- More doctor choice and flexibility
- Higher out-of-pocket costs with no annual limit
- Need to add a separate prescription drug plan
- May want to add a Medigap (supplement) policy for extra protection
Option 2
Medicare Advantage (Part C, usually includes Part D)
- Lower out-of-pocket costs with annual spending caps
- Often includes extras like dental and vision
- Limited to the plan's network of doctors and hospitals
- All-in-one convenience
Key Medicare Decision Points
How should you decide which Medicare plan is right for you or the senior in your life?
When deciding which option is right for you or the senior in your life, there are some important questions to consider:
Would you consider switching doctors to lower your costs?
Original Medicare offers broad provider access, even with a Medigap plan. Medicare Advantage may have network restrictions, but it could reduce expenses.
Do you need dental or vision coverage?
Original Medicare only covers dental and vision for specific medical needs. Some Medicare Advantage plans offer expanded benefits like exams, eyewear, and dental care.
Do you travel frequently?
Original Medicare provides nationwide coverage. Medicare Advantage plans may have network limits, but they often include worldwide emergency benefits.
Do you have chronic conditions?
Consider which path gives you better access to specialists.
Do you need additional benefits, such as hearing or transportation?
Medicare Advantage may include perks that Original Medicare doesn't, such as hearing aids, wellness programs, or transportation.
Are you aware of the Part D late enrollment penalty?
Medicare encourages early enrollment to avoid gaps in coverage. Late enrollment adds a permanent monthly penalty to your Part D premium.
Do you anticipate high healthcare costs?
Original Medicare does not have a maximum out-of-pocket (MOOP) limit. Medicare Advantage plans include a Maximum Out-of-Pocket limit, ensuring that once you reach the annual limit, the plan covers 100% of approved costs for the remainder of the year.
Remember
You can make changes during the annual Medicare Open Enrollment Dates (October 15 - December 7), though some changes become more difficult to make as you age. The most important thing is to enroll as soon as you're first eligible to avoid penalties and coverage gaps. When in doubt, speak with a licensed Medicare agent who can answer questions and help you compare specific plans in your area.
Medicare Costs
We'll provide a general overview of what to expect from the four parts of Medicare coverage, with some variations depending on your location and enrollment choices.
Medicare costs vary significantly depending on your plan choices and where you live; however, we provide a general breakdown of some typical costs you can expect to encounter. It is essential to check your specific plan for exact costs by location, provider, or service.
Understanding Medicare Cost Sharing
Cost Sharing refers to the portion of healthcare expenses that beneficiaries must pay out of pocket, creating a shared financial responsibility between the individual and the Medicare program.
- Deductibles - The annual amounts you pay before Medicare kicks in
- Coinsurance - The percentage of costs the beneficiary is responsible for paying (e.g., 20%)
- Copays - Set fees that beneficiaries pay for specific healthcare services
- Premiums - The regular monthly fee that seniors pay for their Medicare insurance
- Max Out of Pocket (MOOP) - The highest amount a person with a Medicare Advantage plan will pay for covered healthcare costs in a given year
- Balance Billing - The additional amount a Non-Participating Provider may charge beyond the Medicare-approved rate
Average Medicare Costs
Part A
- •Premium-free if Medicare taxes paid for at least 10 years
- •If not, premium up to $518
- •$1,736 deductible (2026)
- •Coinsurance varies based on days
- •No max out of pocket
Part B
- •$202.90 standard monthly premium (2026)
- •$283 annual deductible (2026)
- •20% coinsurance after deductible
- •No max out of pocket
Part C (Medicare Advantage)
- •Premiums vary by plan
- •Deductibles and copays set by the plan
- •Extra benefits included for additional premium
- •Some plans include Rx coverage
- •Max out-of-pocket limits apply
Part D
- •Premium varies by plan
- •Deductible cannot exceed $590
- •Coinsurance & copays set by the plan
- •$2,100 out-of-pocket max (2026)
Medigap
- •Helps cover the Medicare Part A deductible
- •Coverage for Part B deductible not available to new enrollees after 1/1/2020
- •Premiums vary by provider and location
- •Most comprehensive plans have the highest deductibles
- •10 plans to choose from (2 are sunsetting)
Important
Original Medicare (Parts A and B) has no annual limit on out-of-pocket costs; therefore, many people opt for supplemental coverage.
This information is based on currently available Medicare data and is subject to change. Find more details on Medicare.gov or call 1-800-MEDICARE for the most current information.
What Medicare Doesn't Cover
A few important things to be aware of as you first enter the Medicare world.
While Medicare covers a wide range of healthcare services, understanding what Medicare doesn't cover is just as important as knowing what it does cover.
Medicare generally doesn't cover:
- Long-term care (nursing homes, assisted living)
- Most dental care
- Eye examinations related to prescribing glasses
- Dentures
- Cosmetic surgery
- Acupuncture
- Hearing aids and exams for fitting them
- Routine foot care
This information is based on currently available Medicare data and is subject to change. Find more details on Medicare.gov or call 1-800-MEDICARE for the most current information.