What is Medicare?

Medicare is a federal health insurance program established in 1965 to help those age 65 and older, certain disabled individuals, and those with End-Stage Renal Disease (ESRD) or ALS afford necessary medical care.

It provides critical coverage for millions of Americans, but navigating the system can feel overwhelming. That's why understanding what Medicare is, how it works, and what the different parts cover is so important.

This page gives you a comprehensive breakdown of Medicare, including eligibility, enrollment periods, and the differences between the various parts (A, B, C, and D), so you can make confident, informed choices about your healthcare.

Medicare is divided into four main parts:

• Part A: Hospital Insurance

• Part B: Medical Insurance

• Part C: Medicare Advantage

• Part D: Prescription Drug Coverage

Together, these parts cover different aspects of your healthcare - but not all parts are required or automatic. Below, we'll explore each part in detail -- what it covers, how much it costs, and how it fits into your healthcare needs.

Medicare at a Glance

Part A covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health services. Most people don't pay a monthly premium for Part A if they or their spouse paid Medicare taxes for at least 10 years. However, there are deductibles and coinsurance that apply when you use hospital services.

Costs:

• Premium: Free for most people (If you or your spouse paid Medicare taxes for at least 10 years)

• Deductible: $1,676 per benefit period (2025)

• Coinsurance:

  • Days 1 to 60: $0 per Day

  • Days 61 to 90: $419 per Day

  • Days 91 to 150 $838 per Day (Lifetime Reserve Days)

Important Notes:

• Part A does not cover long-term custodial care (e.g., assisted living)

• Benefit periods reset after you've been out of the hospital for 60 consecutive days

Part B helps cover outpatient care, doctor visits, preventive services (like vaccinations and screenings), and durable medical equipment (e.g., wheelchairs). It requires a monthly premium and comes with an annual deductible and 20% coinsurance for many services. Part B is essential for covering a wide range of medical treatments and services outside of the hospital.

Costs:

• Monthly Premium: $185 (2025 standard rate; higher-income individuals may pay more)

• Annual Deductible: $257 (2025)

• Coinsurance: 20% of the Medicare-approved amount for most services after the deductible is met

Important Notes:

• There is no out-of-pocket maximum with Original Medicare (Parts A & B)

• You must pay separately for drug coverage and supplemental insurance if desired

Part B: Medical Insurance (Original Medicare)

Part C: Medicare Advantage

Part A: Hospital Insurance (Original Medicare)

Medicare Advantage (Part C) is a bundled alternative to Original Medicare (Parts A & B) that combines your hospital and medical coverage into one plan, often through private insurance companies. These plans may include extra benefits like prescription drug coverage, dental, vision, and hearing services, and usually have a network of providers. Part C typically comes with lower out-of-pocket costs but can have restrictions like needing a referral for specialists.

Costs:

• Still pay your Part B Premium

• May have additional monthly premiums

• Copays and coinsurance vary by plan

Visit our Medicare Advantage page for more information.

Part D: Prescription Drug Plans

Part D helps cover the cost of prescription medications, and is available through private insurance companies. You can enroll in a standalone Part D plan to add coverage to Original Medicare or choose a Medicare Advantage plan that includes prescription drug coverage. The cost varies by plan and may include premiums, deductibles, and copayments, depending on the drugs you need.

Costs:

• Monthly Premium: Varies by plan

• Annual Deductible: Up to $590 in 2025 (Varies)

• Copayments/Coinsurance: Based on carrier drug tier

Visit our Prescription Drug Plans page for more information.