What Is Medicare? Navigating Costs, Eligibility, & More

• Medicare is a federal health insurance program for Americans age 65 and up as well as younger U.S. citizens with certain disabilities or ESRD. 

• There are two main ways to enroll in Medicare, either by choosing an Original Medicare plan or a Medicare Advantage plan. Original Medicare beneficiaries also have the option to add on a Medigap policy.

The Federal Medicare Program is comprised of health care coverage for Americans age 65 and up, as well as younger Americans with disabilities and those with end-stage renal disease (ESRD).

Learn more about Medicare including Medicare costs, Medicare eligibility, and what healthcare services Medicare plans cover in this comprehensive guide.

Original Medicare is the first iteration of Medicare. Original Medicare benefits are divided into two Medicare Parts. Each of these portions covers specific types of healthcare services. The Parts of Original Medicare are called Medicare Part A (hospital insurance) and Medicare Part B (medical insurance).

Medicare Part A covers hospital costs associated with inpatient care. Some covered services include:

• Inpatient hospital care

• Skilled nursing facility care

• Nursing home care (non-custodial or long-term care)

• Hospice care

• Home health care

Note: Learn more about Medicare Part A coverage at this resource.

Most Americans will be eligible to get Part A without needing to pay a monthly premium, so long as they paid at least 10 years’ worth of Medicare taxes. Those ineligible for Premium-Free Part A are still able to purchase this Medicare Part, however.

Medicare Part B provides coverage for a few main types of services:

• Medically-necessary outpatient care (i.e. doctor visits) 

• Preventive services (i.e. vaccinations)

• Durable medical equipment (DME)

Medicare Part B requires its beneficiaries to pay a monthly premium payment. In 2023, the standard monthly premium is $164.90.

Note: Learn more about what Medicare Part B covers at this resource.

While Original Medicare coverage is quite comprehensive, Medicare does not cover everything. Some examples of what is not covered by Medicare include: 

• Dental

• Vision

• Hearing

• Prescription drugs

Note: Learn more about what isn’t covered by Original Medicare at this resource.

Original Medicare beneficiaries can still get coverage for prescription drugs but would need to sign up for a Medicare drug plan in order to receive that coverage. These plans are known as Medicare Part D.

Medicare Part D is Medicare prescription drug coverage. Medicare beneficiaries must either enroll in a separate Medicare drug plan to add on to their Original Medicare coverage or find a Medicare Advantage plan that includes drug coverage. Do note that not all MA plans provide coverage for prescription medications. 

Note: Learn more about enrolling in Medicare Part D at this resource.

Medicare supplement insurance plans supplement Original Medicare in order to provide beneficiaries with more comprehensive health coverage. There are three main types of supplement plans:

• Medicare Advantage (Medicare Part C)

• Medicare-Medicaid (Dual Eligibles) 

• Medigap (MedSupp)

What Is Medicare Advantage?

Medicare Advantage plans, also known as Medicare Part C or MA plans, are supplemental Medicare plans. Medicare Advantage plans bundle Medicare Part A and Part B into one health insurance plan. MA plans are offered through private insurers that are Medicare-approved.

Most Medicare Advantage plans also have additional benefits, including dental, hearing, and vision coverage. MA plans also often include Medicare Part D, prescription drug coverage, within its policies. 

Beneficiaries should always check with the plan’s insurance company to confirm extra health care benefits. They should also understand the costs and expected out-of-pocket expenses will vary depending on the MA plan chosen.

What Is Medicare-Medicaid (Dual Eligibles)? 

Medicaid is a state-government-run health insurance program created for low-income adults, children, pregnant women, elderly adults, and people with disabilities. This program can help lower medical expenses. 

Some Medicare beneficiaries are eligible for both Medicare benefits and Medicaid benefits, a program known as Dual Eligibles.

What Is Medigap? 

Medigap plans (also known as MedSupp) are policies that are sold by private insurance companies. Many Medigap plans help pay some out-of-pocket costs such as deductibles, coinsurance, and copays. There are 10 types of Medigap plans.

Eligible persons for Medicare include:

• Americans 65 and older

• Younger Americans with disabilities

• Americans with end-stage renal disease (ESRD)

• Spouses of Medicare-eligible persons

Note: To learn more about Medicare eligibility, visit this source.

In order to enroll in Medicare, beneficiaries must know when they are first eligible for Medicare. This eligibility determines which enrollment period they are part of. Learn more about enrolling in Medicare at this resource.

The answer to the question about how much Medicare coverage costs is not straightforward due to the many combinations of Medicare health plans available. Factors that play a role in Medicare pricing include: 

• Monthly premiums

• Deductibles

• Coinsurance

• Copayments

• Other insurance the beneficiary may have

• Where the beneficiary lives 

• Income

Note: Medicare costs change annually.

Medicare is not the easiest to understand. Below are various resources and tips for navigating Medicare coverage, enrollment, and more in the most effective way.

For help deciding on a Medicare health plan and enrollment:

• Research online: Visit The U.S. Centers for Medicare & Medicaid Services (CMS) official website for extensive information regarding Medicare benefits and coverage.

• Talk to family and friends: They understand your situation and healthcare needs, meaning they can help you navigate enrollment.

• Call State Health Insurance Assistance Program (SHIP): SHIP can provide free guidance in choosing a policy. Do note, not all states participate in SHIP. Learn more at this resource.

• Discuss options with a licensed insurance agent: Licensed insurance agents can help enrollees navigate their Medigap choices and help them make the best decision. 

• Contact Medicare: Get the contact information for Medicare at this resource.

In addition to the above tips, the federal government website for Medicare has multiple tools to help beneficiaries navigate coverage. Some of the most helpful tools are linked below:

• Find a Medicare plan tool

• Find a Medigap policy tool

• Medicare glossary

• Find if a healthcare service is covered by Medicare

• Find DME suppliers

• Find and compare Medicare-approved healthcare providers

• General Medicare resources and info

For Medicare financial assistance: 

There are a number of ways to get cost assistance and save money on Medicare such as: 

• Dual Eligibles: The Medicare-Medicaid Dual Eligibles program is for beneficiaries eligible for both Medicare benefits and Medicaid benefits.

• Medicare Savings Programs: Medicare Savings Programs can help beneficiaries with premium payments. These programs also pay for Part A and B deductibles, coinsurance, and copayments should a beneficiary meet certain requirements. 

• Medigap: Medigap policies are sold by private insurance companies and many help pay some out-of-pocket costs such as deductibles, coinsurance, and copays associated with Original Medicare coverage. 

• Program of All-Inclusive Care for the Elderly (PACE): PACE is a Medicare and Medicaid program that helps beneficiaries get their healthcare within community settings as opposed to going to a nursing home or other type of facility. 

• Extra Help (Part D): Extra Help is a program to assist Medicare beneficiaries with limited resources or income pay for Medicare prescription drug plan costs including premiums, deductibles, and coinsurance. 

• Supplemental Security Income (SSI): SSI is a program that provides monthly payments to adults as well as children with a disability who have income and other resources below certain financial thresholds.