Medicare is government health insurance for people ages 65 and older and those under age 65 with specific health conditions. Plans can include inpatient, outpatient, and prescription medication coverage.

Medicare offers a variety of plans that cover outpatient medical services, inpatient hospital care, and prescription drugs. These plans become available to you once you qualify for Medicare.

You can choose a plan or combination of plans that allows you to access the healthcare you need.

Making lists of the conditions you have, medications you take, and doctors you see can help you choose the best plan for your needs.

Whether you’re new to Medicare or just staying informed, here’s what to know about the basics of this federal health insurance program.

Medicare is a government-funded health insurance program that provides medical coverage for people ages 65 and over and some people under age 65. You may be eligible for Medicare if you:

You can use Medicare as your primary insurance or alongside other health insurance. However, Medicare might not cover all medical expenses.

Medicare is funded by taxes, premiums that you pay for some parts of Medicare, investments, and other funds authorized by Congress.

You are eligible for Medicare around your 65th birthday. You may also qualify for Medicare if you have a disability and receive Social Security benefits.

Medicare covers medically essential care, such as hospital stays and doctor visits. There are four main parts: Part A, Part B, Medicare Advantage (Part C), and Part D prescription drug plans.

Part A and Part B make up Original Medicare and provide the majority of care and services.

Medicare Part A

Medicare Part A covers inpatient hospital care, hospice care, and skilled nursing facility care.

Most people do not pay a premium for Part A, but it depends on your work and tax-paying history. If you have worked and paid taxes for:

  • 40 quarters or more, which is equivalent to around 10 years, you will pay no monthly premium for Part A
  • between 30 and 39 quarters, you will pay a monthly premium of $285 per month
  • less than 30 quarters, you will pay $518 per month

Various out-of-pocket costs also apply to Part A, including a $1,676 deductible, which is payable per benefit period.

A Part A benefit period begins the day you are admitted to a hospital and ends after you have received no inpatient care for 60 consecutive days, meaning that you wouldn’t have to pay the deductible again if you have already paid the full amount and need to be readmitted following a discharge.

Copayments apply to Part A services if you are in the hospital for more than 60 days, and they increase the longer you remain an inpatient.

Doctor’s visits while you are an inpatient come from Part B benefits.

Medicare Part B

Medicare Part B covers outpatient medical services, including:

The Medicare Part B premium in 2025 is $185, although this amount can increase based on your income.

A deductible of $257 applies before the plan pays its share of costs. You will then pay a coinsurance of 20% for eligibles Part B items and services.

Part B plans do not cover take-home prescription drugs, but they do cover limited medications that you receive in a doctor’s office or clinic.

Medicare Part D

Medicare Part D prescription drug plans cover take-home medications. It works alongside Original Medicare as a stand-alone plan, but coverage is also often included in Medicare Advantage (Part C) plans.

Private insurance companies administer Part D plans on Medicare’s behalf, so costs and drug availability can vary. However, they must include some of the most commonly prescribed drug categories and classes, and most drugs in certain protected classes.

Part D plans provide a drug list, called a formulary, that details which drugs the plan covers. It is important to review this information to determine whether the medications you need are covered by the plan you are considering.

The 2025 base premium for Part D prescription drug plans is $36.78, but depending on your income, you may pay more.

There may be a deductible for Part D plans, but in 2025, this cannot be more than $590.

Under Part D, after you’ve paid your deductible (if you have one), you will pay a 25% coinsurance toward your medication costs, and the plan will cover the remaining 75%. Starting in 2025, once you have paid $2,000 in out-of-pocket costs, you will pay no more for your prescriptions for the remainder of the calendar year.

2026 Medicare Part D costs

In 2026, the Part D costs will differ slightly, according to the Centers for Medicare & Medicaid Services (CMS).

The maximum deductible is set to increase to $615, and the out-of-pocket maximum will increase to $2,100.

Medicare supplement plans (Medigap)

Even though Medicare supplement plans are not “part” of Medicare, they are one of the five main types of Medicare insurance for you to consider.

Medigap works alongside Original Medicare and helps with its associated out-of-pocket expenses.

Private insurers also administer Medigap plans, but Medicare standardizes the coverage. There are 10 Medigap plans available: A, B, C, D, F, G, K, L, M, and N. Each plan is slightly different in terms of the specifics of what it covers.

If you plan on enrolling in Medigap, it’s typically best to do so during your initial enrollment period. Some plans may charge more if you enroll later and can use preexisting medical conditions to determine costs or deny coverage.

If you were first eligible for Medicare after January 1, 2020, you are not eligible to purchase plans C or F; but if you were eligible prior to that date, you can purchase them. Medigap Plan D and Plan G currently provide similar coverage as plans C and F.

Medicare Advantage (Part C)

Medicare Advantage (Part C) combines the benefits of Original Medicare parts A and B under one plan. Private insurance companies administer Medicare Advantage plans, so costs can vary.

These plans cover all the benefits and services that parts A and B cover. They may also offer extra benefits, such as:

  • prescription drug coverage
  • dental
  • vision
  • hearing
  • other services

Medicare Advantage plans have out-of-pocket expenses like deductibles, coinsurance, and copayments, but these can also vary by plan.

Medicare Advantage plans typically require you to get medical care from in-network medical professionals and facilities for the plan to cover the service. If you visit an out-of-network medical professional or facility, you may have to pay out of pocket for some of or all the associated costs.

If you’re already receiving Social Security benefits when you turn 65, you will typically be automatically enrolled in Medicare.

If you are not receiving Social Security benefits, you can contact the Social Security Administration to enroll during your initial enrollment period. This period begins 3 months before your 65th birthday month, continues through your birth month, and ends 3 months later.

If you miss this enrollment period, you may be able to enroll during a special enrollment period.

The Social Security Administration handles Medicare enrollment. There are three ways to apply:

If you’re a retired railroad employee, contact the Railroad Retirement Board (RRB) at 877-772-5772 (TTY: 312-751-4701) to enroll.

When choosing Medicare options, it’s important to consider your healthcare needs. Here are a few tips for choosing a plan or combination of plans to work for you:

  • Estimate how much you spent on healthcare last year to better predict which plans will save you money.
  • List your medical conditions so you can be sure they are covered by the plans you consider.
  • List the doctors you currently see and ask if they accept Medicare or which Health Maintenance Organizations (HMO) or Preferred Provider Organization (PPO) networks they may be in.
  • List any medical treatment or hospitalizations you may need in the upcoming year.
  • Note any other insurance you have, whether you can use it with Medicare, and how to end that coverage if necessary.
  • Do you need dental work, wear glasses or hearing aids, or would you like other types of additional coverage?
  • Are you planning to travel out of state or out of the country?

These factors can help you decide which parts of Medicare best meet your needs and which individual plans to consider.

While Original Medicare covers many services, not every medical situation is covered. For example, long-term care is not considered part of Medicare. If you need long-term care, consider a Medicare Advantage or Medigap plan, which may offer limited long-term care benefits.

Medicare covers medically necessary care. It does not cover long-term care in a nursing home, massage therapy, most dental services (including routine dental care and dentures), hearing exams and hearing aids, eye exams, glasses and contact lenses, or cosmetic surgery.

Medicare is not free. The amount you pay for Medicare depends on your work and tax history and current income.

Some people may qualify for Medicare assistance programs.

To qualify for Medicare, you must be age 65 or have a disability such as ALS, or ESRD.

You must also be a U.S. citizen or resident or have been lawfully admitted to and residing in the United States for 5 continuous years before applying for Medicare.

Knowing which Medicare plans are suitable for you depends on various factors, including:

  • your budget
  • overall health
  • the level of care you need now and believe you may need for the future

It’s best to read through the services and plans carefully and choose the one that works best for you.

Some plans have limited enrollment periods, so sign up early to avoid a coverage gap.

If you’re concerned about whether Medicare covers something you know you will need, you can ask your doctor, search the Medicare Coverage Database online, or contact Medicare at 800-633-4227 (TTY: 877-486-2048).