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What is Medicare?

You may find yourself asking, what is Medicare? Medicare is a federally-run health insurance program for Americans age 65 and over or who meet particular eligibility criteria.

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Medicare consists of four parts. However, additional options are available for those who want a higher level of coverage.

Medicare can be confusing if you are not adequately educated. That is where we come in. Below, we review the four parts of Medicare and how they work together to provide healthcare coverage.

Medicare Definition

Medicare is defined as federal health insurance for people 65 or older, those younger than 65 with disabilities, and those with amyotrophic lateral sclerosis or end-stage renal disease.

Original Medicare, Part A and Part B,  make up Original Medicare. These parts are inpatient hospital coverage and medical coverage, respectively. Additionally, Medicare Part C and Part D provide benefits to help Medicare resemble group or employer coverage. Medicare Part C can include dental or vision coverage, while Medicare Part D is prescription drug coverage.

Medicare is the most widely-used healthcare coverage for those over 65. So, if you are nearing eligibility, it is essential to understand what Medicare is and how the four parts work.

However, Medicare does not cover everything. Often, you may need to enroll in additional plans to receive full coverage.

What is Medicare Part A?

Medicare Part A is inpatient hospital insurance. This part of Medicare covers some of your hospital, inpatient nursing facility, and hospice costs.

Remember that Medicare Part A does not cover any of the treatments or procedures you receive while in a hospital or nursing facility. This part of Medicare only covers the cost of the facility itself.
When you enroll in Medicare Part A, you are responsible for paying a per-occurrence deductible and daily copays after meeting the deductible.

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For most, Medicare Part A has a $0 monthly premium. You qualify for a zero-premium if you have worked at least ten years paying Medicare tax in the United States. Otherwise, you must pay a monthly premium. This premium can be as high as $505 per month in 2024.

What Is Medicare Part A

What is Medicare Part B?

Medicare Part B is medical insurance. This part of Medicare covers your doctors’ visits, procedures, and treatment while you are in the hospital.

Part B of Medicare covers two types of services: preventive and medically necessary. Additionally, Medicare Part B covers durable medical equipment you may need to manage health conditions.

Medicare Part B requires you to meet an annual deductible before you receive coverage. Once you meet your deductible, Medicare Part B will cover 80% of your cost, and you are responsible for the remaining 20%. There is no maximum out-of-pocket amount for Medicare Part B, which means there is no cap on your costs.

Unlike with Medicare Part A, you must pay your Medicare Part B premium every month, regardless of how long you paid Medicare taxes while working. The standard monthly Medicare Part B premium is $174.70 in 2024. However, this may be higher, depending on your monthly adjusted gross income.

What Is Medicare Part B

What is Medicare Part C?

Medicare Part C is otherwise known as Medicare Advantage. Private insurance companies that Medicare approves offer Medicare Advantage plans. If you enroll in Medicare Part C, it will become your primary coverage over Original Medicare.

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Medicare Advantage plans combine Medicare Part A and Part B coverage with additional benefits to provide you with an all-in-one plan. However, carriers offering these plans have the authority to choose the copayments, deductibles, and maximum out-of-pocket limits.

Additionally, Medicare Part C can offer benefits like coverage for hearing, vision, and dental care, as well as transportation and gym memberships. These benefits are not available with Original Medicare.

Medicare Part C plans have low premiums – many at $0. However, even with the low monthly premium, you may spend more with Medicare Part C because of high out-of-pocket limits and cost-sharing. Additionally, you will still need to pay the Medicare Part B deductible when you have Medicare Advantage coverage.

What Is Medicare Part C

What is Medicare Part D?

Medicare Part D is prescription drug coverage. This part of Medicare helps cover the costs for medications your physician may prescribe for you to take at home. Like Medicare Part C plans, private insurance companies approved by Medicare offer these policies.

If you have Original Medicare, it is essential to sign up for a Medicare Part D plan to receive prescription drug coverage. If you delay enrollment in Medicare Part D and do not have creditable drug coverage, you may need to pay the Medicare Part D penalty in the future.

The average Medicare Part D plan in 2024 costs $34.70 per month. However, plans are available for as low as $5 in some areas. It is crucial to obtain drug coverage, as we never know when we will require medications to maintain our health.

What Is Medicare Part D

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Is Medigap a Part of Medicare?

Medicare Supplement (Medigap) plans are not an official part of Medicare. However, they are made to be secondary to your Original Medicare coverage.

Medicare Supplement plans are federally standardized to match specific criteria. Thus, the same policy – regardless of the carrier – must provide you with the same benefits.

There are 12 available standardized Medicare Supplement plans in most states. However, not every option may be available to you. So, you must ensure you meet the qualifications before enrolling. Each plan has its own set of benefits to help you cover your healthcare costs.

Since Original Medicare only covers 80% of your costs, Medigap plans cover this coverage gap.

Keep in mind that if you enroll in Medicare Part C, you cannot enroll in a Medicare Supplement. Thus, the importance of comparing all available coverage options to ensure you choose the best one for you.

Like Medicare Part C, Medicare Supplement plans have a monthly premium you must pay to continue your coverage each month. Monthly premium prices can range from $50 to $450, depending on the plan.

What Is A Medicare Supplement Plan

What is Not Covered by Medicare?

The four parts of Medicare do not cover everything. Medicare Part C can cover many benefits that Original Medicare does not.

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Services not typically covered by Medicare include:

  • Hearing aids and hearing exams
  • Most dental care/dentures
  • Long-term custodial care
  • Routine eye exams/glasses
  • Cosmetic surgery
  • Acupuncture
  • Routine foot care

If you have Original Medicare, you can still enjoy most of these services by enrolling in a stand-alone plan to cover the benefits you desire.

What Is Not Covered By Medicare

Medicare Eligibility and Enrollment

Not everyone can obtain Medicare coverage. You must meet specific criteria for the federal health program. You must meet at least one of the following:

  • Age 65 or older
  • Receive Social Security Disability Income (SSDI) for 24 months
  • Diagnosed with ALS or ESRD

Additionally, you must be an American citizen for at least five years. Many people automatically enroll in Original Medicare once they turn 65.

Who Is Eligible for Medicare

However, you may need to enroll yourself in Medicare through the Social Security Administration. If you are not receiving Social Security benefits when you enroll in Medicare, this will be the case for you. You should enroll when you first become eligible to avoid any late enrollment penalties in the future.

Are You New to Original Medicare?

If you are new to Medicare or are recently eligible for the federal health program, you will want to begin by enrolling in Original Medicare.

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Typically, those new to Medicare will enroll in Original Medicare upon their 65th birthday. Around this time, you get an Initial Enrollment Period when you can enroll in Medicare Part A and Part B.

Remember, enrollment in Original Medicare coverage is not mandatory when you are first eligible – or ever. However, if you do not enroll or have creditable coverage in the meantime, you must pay a penalty if you eventually enroll in Original Medicare.

For most, Medicare Part A has a $0 monthly premium. If you work at least ten years in the U.S. paying Medicare taxes, you will not owe a Medicare Part A premium as long as you have this coverage.

On the other hand, Medicare Part B involves a premium for everyone. In 2023, the base Medicare Part B premium is $164.90, which has increased to $174.70 for the year 2024. However, this can increase based on your income. Higher earners may need to pay a higher Medicare Part B premium. On the other hand, those with lower incomes may qualify for assistance programs that partially or fully cover their Medicare Part B premium.

New to Medicare Supplement Plans

After you enroll in Original Medicare, you have the chance to pair this coverage with a Medicare Supplement plan. Medicare Supplement plans pay secondary to Original Medicare and fill the gaps in coverage and out-of-pocket costs.

When you are new to Medicare, you may not understand all the costs associated with Original Medicare. These costs change annually, so it is essential to stay as up-to-date as possible.

Medicare Part A requires you to pay a per-occurrence deductible and per-day copayments when you stay in the hospital past the allowed number of days. Meanwhile, you must pay an annual deductible and a 20% coinsurance on Medicare Part B.

This is where Medicare Supplement (Medigap) plans can help significantly. These plans relieve you of out-of-pocket costs, making your healthcare more affordable.

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When you are new to Medicare, you receive a Medicare Supplement Open Enrollment Period. This means that you can enroll in any Medigap plan, regardless of your pre-existing conditions.

Your open enrollment window for Medigap is unique to you, but it only lasts six months. Once it is over, you can still enroll in a Medigap plan at any time, but you will need to go through medical underwriting when doing so.

Thus, it is crucial to enroll in a Medicare Supplement plan as soon as you are eligible. It may be your only opportunity.

Once you have Medigap, you can receive care from any health professional that accepts Original Medicare. Because benefits are standardized, your carrier does not impact the doctors you can visit. Additionally, you will never require a referral to see a specialist.

New to Medicare Advantage Plans

If you choose not to enroll in a Medicare Supplement plan, the next best option is a Medicare Advantage plan. However, you cannot enroll in both plan types simultaneously. You must only choose one.

Medicare Advantage, or Medicare Part C, are all-in-one Medicare plans that provide additional benefits to Original Medicare. These benefits can include dental, prescription, hearing, vision, and transportation coverage, as well as gym memberships and more.

Enrolling in a Medicare Advantage plan often comes at no additional monthly cost to you. However, you must still pay your Medicare Part B premium each month. Additionally, these plans often have higher maximum out-of-pocket limits. These limits can be as high as $10,000 or more if you go out of network.

This coverage type is often more restrictive than Medicare Supplement plans, so more clients tend to enroll in a Medigap plan to save money in the long run.

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Hopefully, you now feel more familiar with the different parts of Medicare and what each includes. We understand it can be overwhelming and confusing at first, so we’re here to help you find the information you or your loved ones need.

Not only are we an online Medicare learning resource, but we can also help you find the best rates for the above types of coverage!

How To Find Out More About What Medicare Is

To receive an online premium comparison, call us at the number above. Or, complete our online rate form to find policy prices near you. Our consultation service is free, and we have helped countless people find the best coverage.

We look forward to doing the same for you.

What Is Medicare Longform

Sources

MedicareFAQ is dedicated to providing you with authentic and trustworthy Medicare information. We have strict sourcing guidelines and work diligently to serve our readers with accurate and up-to-date content.

  1. What is Medicare, Medicare. Accessed June 2022.
    https://www.medicare.gov/what-medicare-covers/your-medicare-coverage-choices/whats-medicare
  2. Medicare General information, CMS. Accessed June 2022.
    https://www.cms.gov/about-cms/what-we-do/medicare
  3. Medicare, Mayo Clinic. Accessed June 2022.
    https://www.mayoclinic.org/patient-visitor-guide/billing-insurance/insurance/accepted-insurance/medicare
  4. What Medicare Covers, Medicare. Accessed June 2022.
    https://www.medicare.gov/what-medicare-covers
  5. An Overview of Medicare, KFF. Accessed June 2022.
    https://www.kff.org/medicare/issue-brief/an-overview-of-medicare/
  6. 2024 Medicare Parts A & B Premiums and Deductibles, CMS. Accessed October 2023.
    https://www.cms.gov/newsroom/fact-sheets/2024-medicare-parts-b-premiums-and-deductibles
Kayla Hopkins

Kayla Hopkins

Content Editor
Kayla Hopkins is an accomplished writer and Medicare guru serving as the Editor of MedicareFAQ.com. Upon completing her Communications degree from Ohio University, Kayla dedicated her time to understanding the ever-evolving landscape of healthcare. With her extensive background as a Licensed Insurance Agent, she brings a wealth of knowledge and expertise to her writing.
Ashlee Zareczny

Ashlee Zareczny

Compliance Manager
Ashlee Zareczny is the Compliance Manager for MedicareFAQ. As a licensed Medicare agent in all 50 states, she is dedicated to educating those eligible for Medicare by providing the necessary resources and tools. Additionally, Ashlee trains new and tenured Medicare agents on CMS compliance guidelines. Ashlee is a Medicare expert who specializes in Medicare Supplement, Medicare Advantage, and Medicare Part D education.

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