Medicare is a federal health insurance program primarily for people age 65 and older, but it also covers some individuals under age 65 with certain disabilities. Medicare is made up of different parts that cover specific services:
Medicare Part A – Hospital Insurance
Part A helps cover:
- Inpatient hospital stays
- Skilled nursing facility care
- Hospice care
- 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. This is known as premium-free Part A.
Medicare Part B – Medical Insurance
Part B helps cover:
- Doctor’s visits
- Outpatient care
- Medical supplies
- Preventive services
In 2025, the standard monthly premium for Part B is $185.00. If your income is above a certain level, you may pay more due to an Income-Related Monthly Adjustment Amount (IRMAA).
Medicare Part C – Medicare Advantage
Medicare Advantage Plans (Part C) are “all-in-one” alternatives to Original Medicare. These plans:
- Include Part A and Part B
- Usually include Part D (prescription drug coverage)
- Often offer extra benefits not covered by Original Medicare, such as vision, hearing, and dental
These plans are offered by private insurance companies approved by Medicare and may have:
- Different out-of-pocket costs
- Specific provider networks (HMO or PPO)
- Unique rules about how and where you receive services
Plans operate under annual contracts and must notify you of any changes before the next enrollment year.
Medicare Part D – Prescription Drug Coverage
Part D helps pay for prescription medications, including both generic and brand-name drugs. Coverage is offered through:
- Stand-alone Medicare drug plans
- Medicare Advantage Plans that include drug coverage
- Each plan varies in cost and drug coverage but must provide at least a standard level of coverage defined by Medicare. Costs can include:
- Monthly premiums
- Deductibles
- Copayments or coinsurance
Drugs are categorized in tiers within a plan’s formulary (list of covered drugs), which affects how much you pay for each medication.
How Medicare Works
Once enrolled, you choose how you want to receive your Medicare benefits. There are two main options:
1. Original Medicare
- Includes Part A and Part B
- You pay a deductible and 20% coinsurance for most services
- To get drug coverage, you must enroll in a separate Part D plan
- You can purchase a Medicare Supplement Insurance (Medigap) policy to help cover additional costs like copayments, coinsurance, and deductibles
- Some Medigap plans also cover care outside the U.S.
2. Medicare Advantage (Part C)
- Combines Part A, Part B, and usually Part D in one plan
- May offer extra benefits not available under Original Medicare
- Requires using the plan’s provider network (HMO, PPO, SNP) for best coverage
- Costs and coverage rules vary by plan
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