Get Started with Medicare: A Guide to Your Coverage

Last updated 4 days ago. Our resources are updated regularly but please keep in mind that links, programs, policies, and contact information do change.

Medicare is America’s federal health insurance program for people 65 and older, plus some younger individuals with disabilities. The program now covers roughly one in four adults.

The program’s size and the diversity of people it serves – from healthy seniors to individuals with catastrophic illnesses – creates a system of complex rules, varied options, and specific timelines.

The various “Parts” of Medicare, distinct enrollment periods, and supplemental coverage options form a framework designed to provide both standardized core benefits and flexible alternative choices.

Who Qualifies for Medicare

Determining your eligibility for Medicare is the first critical step. The pathways to coverage depend on age, work history, or specific health conditions. For most people, eligibility begins at age 65, but several important exceptions provide coverage for younger individuals with significant health needs.

Age 65 and Older

The most common way to become eligible for Medicare is by turning 65. To qualify, you must be a U.S. citizen or a legal resident who has lived continuously in the United States for at least five years. However, age and residency are only part of the equation. Work history determines the cost of hospital insurance.

A central concept in Medicare eligibility is Premium-Free Part A. Part A covers hospital insurance and is available at no monthly premium to individuals who are eligible for Social Security or Railroad Retirement Board benefits. This typically means you or your spouse (including a current, divorced, or deceased spouse) worked and paid Medicare taxes for at least 10 years, equivalent to 40 quarters of work.

This is a critical financial benefit earned through years of contributions to the system. For those who don’t meet the 10-year work requirement, it’s still possible to get Part A coverage, but it must be purchased. If you buy Part A, you must also enroll in Part B (Medical Insurance) and pay monthly premiums for both.

Under Age 65 with Disabilities

Medicare extends coverage to younger individuals who face significant, long-term health challenges. This reflects a policy acknowledgment of conditions that can be medically and financially catastrophic.

Disability Benefits: If you’re under 65, you can qualify for Medicare if you’ve been entitled to Social Security Disability Insurance (SSDI) benefits for a total of 24 months. This 24-month waiting period begins after you’re approved for SSDI benefits. Once the waiting period is complete, you’re automatically enrolled in Medicare Parts A and B.

Specific Medical Conditions: For two specific and severe conditions, Congress has waived the 24-month waiting period, granting immediate access to Medicare coverage.

Amyotrophic Lateral Sclerosis (ALS): Individuals diagnosed with ALS become eligible for Medicare the very first month they begin receiving SSDI benefits. There is no 24-month wait. This exception recognizes the rapid progression and high cost of care associated with Lou Gehrig’s Disease.

End-Stage Renal Disease (ESRD): Individuals of any age who have permanent kidney failure requiring regular dialysis or a kidney transplant are eligible for Medicare. Like with ALS, there is no 24-month waiting period. Coverage typically begins after a waiting period that can vary, but it provides a critical lifeline for those facing this chronic, life-sustaining treatment.

These specific exceptions for ALS and ESRD demonstrate that Medicare has evolved from its original focus on the elderly to become a crucial safety net for Americans facing some of the most challenging health crises.

Medicare’s Four Parts Explained

Medicare is structured like a set of building blocks, with foundational pieces and optional additions. This architecture is built on a core principle of public-private partnership: the federal government directly administers the foundational hospital and medical insurance, while private insurance companies deliver prescription drug plans and managed care alternatives.

Part A: Hospital Insurance

Part A is the first foundational block of Medicare. Its primary function is to cover costs associated with inpatient care.

Inpatient hospital stays: This includes semi-private rooms, meals, nursing services, and drugs administered as part of inpatient treatment.

Skilled Nursing Facility (SNF) care: This covers care in a SNF following a qualifying hospital stay. This is for short-term, skilled care and is not custodial or long-term nursing home care.

Hospice care: For individuals with a terminal illness, Part A covers care focused on comfort and pain management rather than curing the illness.

Home health care: In certain circumstances, Part A covers part-time skilled nursing care, physical therapy, and other services in the home.

Part B: Medical Insurance

Part B is the second foundational block, working alongside Part A to form what is known as “Original Medicare.” It covers a broad range of outpatient and medical services that are deemed medically necessary.

Services from doctors and other health care providers: This includes office visits, consultations, and services from specialists.

Outpatient hospital care: This covers services received at a hospital or outpatient clinic when not formally admitted as an inpatient, such as in an emergency room.

Durable Medical Equipment (DME): This includes items like wheelchairs, walkers, hospital beds, and oxygen equipment for use in the home.

Preventive services: Part B places strong emphasis on prevention, covering services like flu shots, cancer screenings (mammograms, colonoscopies), and an annual “Wellness” visit to develop a personalized prevention plan.

Some home health services: Part B can also cover home health care if it’s not associated with a qualifying hospital stay.

Part D: Prescription Drug Coverage

Added to Medicare in 2006, Part D is an optional component that helps cover prescription drug costs. Unlike Parts A and B, Part D is not administered directly by the government. Instead, it’s offered through private insurance companies that have been approved by Medicare and must follow federal rules.

You can get Part D coverage in one of two ways:

• By enrolling in a stand-alone Prescription Drug Plan (PDP) to complement Original Medicare
• By choosing a Medicare Advantage plan (Part C) that includes drug coverage as part of its bundled benefits

Part C: Medicare Advantage

Part C, known as Medicare Advantage, is not an additional benefit but an alternative way to receive your Medicare coverage. When you choose a Medicare Advantage plan, you’re opting out of the government-administered Original Medicare program and instead enrolling in a private health plan. These plans are offered by private insurance companies that contract with Medicare.

By law, Medicare Advantage plans must cover everything that Original Medicare (Parts A and B) covers, but they do so with different rules, costs, and restrictions. Most Medicare Advantage plans also bundle in prescription drug coverage (Part D), creating an all-in-one package.

This structure relies on private companies to manage care and costs, creating a dynamic tension that fosters competition and innovation (like the inclusion of extra benefits) while also introducing commercial elements like provider networks and profit motives into a public entitlement program.

Choosing Your Medicare Path

Upon becoming eligible for Medicare, you face a fundamental choice between two distinct paths for receiving your health coverage. This is arguably the most important decision you’ll make when starting with Medicare, as it shapes your access to doctors, your out-of-pocket costs, and your overall healthcare experience.

Original Medicare (Parts A & B)

Original Medicare is the traditional fee-for-service health plan managed by the federal government. It consists of Part A (Hospital Insurance) and Part B (Medical Insurance). Under this model, you pay for services as you receive them. After you meet your deductibles, Medicare pays its share of the approved amount for a covered service, and you pay your share, which is typically a 20% coinsurance for most Part B services.

Key Advantage – Unparalleled Flexibility: The hallmark of Original Medicare is freedom of choice. You have the right to go to any doctor, specialist, or hospital in the United States that accepts Medicare. There are no “networks” to worry about. In most situations, you don’t need a referral from a primary care physician to see a specialist, giving you direct access to the care you need.

This flexibility is highly valued by those who travel frequently or want to ensure access to specific medical centers or specialists anywhere in the country.

Key Disadvantage – Significant Financial Exposure: The greatest risk of Original Medicare is its potential for uncapped out-of-pocket costs. While Medicare covers 80% of most Part B services, you’re responsible for the remaining 20% coinsurance. Crucially, there is no annual limit on this 20% share.

A serious illness or accident requiring extensive medical care could lead to substantial and unpredictable medical bills. This financial exposure is the primary reason why most people on Original Medicare purchase additional insurance.

Coverage Gaps: Original Medicare was designed to cover medically necessary hospital and doctor services, but it leaves notable gaps in coverage. It doesn’t cover most routine dental care (like cleanings or fillings), eye exams for glasses, or hearing aids. Most importantly, it doesn’t include coverage for outpatient prescription drugs.

To fill these gaps, beneficiaries typically purchase a separate Part D plan for drugs and often a Medicare Supplement Insurance (Medigap) policy to cover the out-of-pocket costs.

Medicare Advantage (Part C)

Medicare Advantage offers a different approach. These are bundled plans offered by private insurance companies that contract with Medicare to provide all your Part A and Part B benefits. Most plans also include Part D prescription drug coverage, creating an all-in-one package.

Key Advantage – Cost Predictability and Financial Protection: The primary appeal of Medicare Advantage is its built-in financial safety net. Instead of a 20% coinsurance, you typically pay fixed, predictable copayments for services (e.g., $25 for a doctor visit, $250 for an emergency room visit).

By law, every Medicare Advantage plan must include a yearly maximum out-of-pocket limit for all covered Part A and B services. Once you reach this limit, you pay nothing for covered services for the rest of the year, protecting you from catastrophic medical costs.

Key Disadvantage – Network Restrictions: The trade-off for this cost predictability is a loss of flexibility. Most Medicare Advantage plans operate with a network of doctors, hospitals, and other providers. For non-emergency care, you must generally use providers within this network.

Going out-of-network can result in much higher costs or may not be covered at all, depending on the type of plan. This requires you to verify that your preferred doctors and hospitals are part of a plan’s network before enrolling.

Common Plan Types:

HMO (Health Maintenance Organization): These plans usually require you to use doctors, specialists, and hospitals within their network, except for emergency or urgent care. You’re typically required to choose a Primary Care Physician (PCP) who manages your care, and you must get a referral from your PCP before you can see a specialist.

PPO (Preferred Provider Organization): These plans offer more flexibility than HMOs. You have a network of “preferred” providers where your costs will be lowest. You can choose to see providers outside the network, but you’ll pay a higher share of the cost. You generally don’t need to select a PCP or get referrals to see specialists.

Additional Features: To compete for members, many Medicare Advantage plans offer extra benefits not covered by Original Medicare. These can include coverage for routine dental, vision, and hearing services, as well as fitness program memberships. However, plans may also require you to get prior authorization before they will approve and cover certain medical services or procedures.

Side-by-Side Comparison: Original Medicare vs Medicare Advantage

The choice between these two paths involves a fundamental trade-off between flexibility and cost predictability. The following table distills these differences to help you compare the key features at a glance.

Supplemental Coverage Options

For those who choose the flexibility of the Original Medicare path, the next step is to address its significant financial gaps. This is typically done by purchasing additional private insurance policies: Medicare Supplement Insurance (Medigap) to cover out-of-pocket medical costs, and a stand-alone Prescription Drug Plan (Part D) for medication coverage.

Medicare Supplement Insurance (Medigap)

Medigap policies are specifically designed to “fill the gaps” in Original Medicare. They work by paying for some or all of the costs that Medicare doesn’t cover, such as your Part A and B deductibles, and the 20% coinsurance for Part B services. In essence, a Medigap policy is what adds an out-of-pocket limit and cost predictability to the Original Medicare framework.

These policies are sold by private insurance companies but are strictly regulated by the federal government. A critical rule is that it’s illegal for an insurer to sell you a Medigap policy if you’re enrolled in a Medicare Advantage Plan. Medigap only works with Original Medicare. If you and your spouse both want this coverage, you must each buy a separate policy.

One of the most important consumer protections in the Medigap market is standardization. In most states, Medigap plans are identified by letters (A, B, D, G, K, L, M, and N). A plan of a specific letter must offer the exact same set of basic benefits, regardless of which insurance company sells it.

For example, every Plan G provides the same medical coverage. The only difference between a Plan G from Company X and a Plan G from Company Y is the price (the monthly premium). This allows for direct, apples-to-apples comparison shopping based on cost and company reputation.

Medigap Plans C and F, which offered first-dollar coverage, are no longer available to individuals who became newly eligible for Medicare on or after January 1, 2020. For new beneficiaries, Plan G is often a popular choice as it covers nearly all out-of-pocket costs after the annual Part B deductible is met.

Medigap Plan Benefits Comparison

This chart shows the standardized benefits offered by each Medigap plan. A checkmark (✓) indicates the plan covers 100% of the benefit.

*Plans F and G also offer a high-deductible option in some states.

**Plans C and F, which cover the Part B deductible, are not available to people new to Medicare on or after January 1, 2020.

***Plan N pays 100% of the Part B coinsurance, but some office visits may require a copayment of up to $20, and some emergency room visits may require a copayment of up to $50.

Stand-Alone Prescription Drug Plans (Part D)

If you have Original Medicare and want coverage for prescription drugs, you must enroll in a stand-alone Prescription Drug Plan (Part D). Medigap policies sold today don’t include drug coverage.

Like Medicare Advantage, Part D plans are offered by private insurance companies and vary significantly in their costs and coverage. When choosing a plan, you must consider several key factors:

Monthly Premium: The fixed amount you pay each month for the plan.

Annual Deductible: The amount you must pay for your drugs before the plan begins to pay.

Copayments/Coinsurance: The fixed amount or percentage you pay for each prescription after meeting your deductible.

Formulary: This is the most critical element. The formulary is the list of prescription drugs that a plan covers. Before enrolling, you must verify that your specific medications are on the plan’s formulary, as not all plans cover the same drugs.

Tiers: Plans typically group the drugs on their formulary into different “tiers” based on cost. Drugs in lower tiers (like generic drugs) will have lower out-of-pocket costs than drugs in higher tiers (like specialty or brand-name drugs).

The single most important resource for comparing Part D plans is the official Medicare Plan Finder Tool. This tool allows you to enter your specific prescription drugs, dosages, and preferred pharmacies to see a personalized estimate of your total annual costs—including premiums, deductibles, and copayments—for every plan available in your area.

Medicare Enrollment: When and How to Sign Up

Navigating the Medicare enrollment process correctly is paramount. The timelines are strict, and the consequences of missing them can be severe, often resulting in lifelong financial penalties. The rules are the primary enforcement mechanism for the principle of “shared risk” that underpins the entire insurance system.

By requiring people to enroll when they first become eligible, Medicare ensures a balanced risk pool of both healthy and sick individuals, which is necessary to keep the program financially stable and premiums affordable for everyone.

Automatic vs Manual Enrollment

Your path to enrollment depends on whether you’re already receiving Social Security benefits when you become eligible for Medicare.

Automatic Enrollment: If you’re already receiving Social Security or Railroad Retirement Board (RRB) benefits for at least four months before you turn 65, you don’t need to do anything to sign up. You’ll be automatically enrolled in both Medicare Part A and Part B. Your red, white, and blue Medicare card will be mailed to you about three months before your 65th birthday, with coverage starting on the first day of your birthday month.

Manual Enrollment: If you’re approaching 65 but are not yet receiving Social Security benefits (for example, because you’re still working and plan to delay your retirement benefits), you must actively sign up for Medicare yourself. This is a critical distinction that many people miss, leading to costly delays and penalties.

Critical Enrollment Periods

Medicare has specific windows of time, called enrollment periods, during which you can sign up for coverage.

Initial Enrollment Period (IEP): This is the most important deadline for the vast majority of new beneficiaries. Your IEP is a seven-month window that begins three months before the month you turn 65, includes your birthday month, and ends three months after the month you turn 65.

This is your primary opportunity to enroll in Parts A and B, and subsequently, a Part D or Medicare Advantage plan, without risking late penalties.

Special Enrollment Period (SEP): An SEP allows you to enroll in Medicare outside of your IEP without penalty, but only if you meet certain criteria. The most common reason for an SEP is if you (or your spouse) are still working past 65 and have health coverage through that current employer.

In this case, you have an eight-month SEP to sign up for Part B that begins the month after the employment ends or the group health plan coverage ends, whichever happens first. It’s crucial to understand that COBRA or retiree health coverage is not considered coverage based on current employment and doesn’t qualify you for an SEP.

There are also SEPs for other life events, such as moving out of a plan’s service area or losing Medicaid coverage.

General Enrollment Period (GEP): This is the enrollment period for those who missed their IEP and don’t qualify for an SEP. The GEP runs from January 1 through March 31 each year. If you enroll during the GEP, your coverage will begin the month after you sign up. However, you’ll almost certainly face lifelong late enrollment penalties.

Medicare Advantage & Part D Open Enrollment Period: This is an annual period, distinct from the initial sign-up periods for Parts A and B. From October 15 to December 7 each year, all Medicare beneficiaries have the opportunity to join, switch, or drop a Medicare Advantage plan or a Part D prescription drug plan for the following calendar year.

Late Enrollment Penalties

Failing to enroll during your designated period can lead to significant, permanent financial penalties that are added to your monthly premiums for as long as you have coverage.

Part B Late Enrollment Penalty: For each full 12-month period that you were eligible for Part B but didn’t sign up, your monthly Part B premium will increase by 10%. For example, waiting two years to enroll would result in a permanent 20% penalty added to your premium every month.

Part D Late Enrollment Penalty: If you go without creditable prescription drug coverage for 63 consecutive days or more after your IEP, you’ll incur a penalty. The penalty is calculated as 1% of the national base beneficiary premium ($36.78 in 2025) for each full month you were without coverage. This amount is added to your monthly Part D premium for as long as you have coverage.

Part A Late Enrollment Penalty: For those who have to buy Part A, there’s also a penalty for late enrollment. The monthly premium may go up by 10%, and you’ll have to pay this higher premium for twice the number of years you could have had Part A but didn’t sign up.

How to Enroll

For those who need to manually enroll in Medicare, the process is handled by the Social Security Administration (SSA).

Online: The easiest and recommended way to apply is online through the SSA’s website. The application can be completed in under an hour.

By Phone: You can apply over the phone by calling the SSA at 1-800-772-1213 (TTY 1-800-325-0778) from 8:00 a.m. to 7:00 p.m., Monday through Friday.

In Person: You can make an appointment to apply at your local Social Security office.

Medicare Costs in 2025

Medicare is not free. Even after years of paying Medicare taxes, beneficiaries are responsible for a share of the costs, which come in the form of premiums, deductibles, coinsurance, and copayments. These costs can change annually.

2025 Medicare Costs Breakdown

Income-Related Monthly Adjustment Amount (IRMAA)

Medicare includes a means-testing component for its premiums. Beneficiaries with higher incomes are required to pay a higher monthly premium for both Part B and Part D. This is known as the Income-Related Monthly Adjustment Amount, or IRMAA.

The Social Security Administration determines who pays IRMAA based on the modified adjusted gross income reported on your IRS tax return from two years prior. For 2025 premiums, the SSA will use your 2023 tax return.

2025 Part B Premiums Based on 2023 Income

Medicare Advantage and Part D Costs

Unlike Original Medicare, the costs for Medicare Advantage and Part D plans are not standardized across the nation. These costs are set by the private insurance companies that offer the plans and can vary widely based on the plan’s benefits, network, and service area.

Common costs include monthly premiums (in addition to the Part B premium), annual deductibles, and fixed copayments or percentage-based coinsurance for services and drugs. The only way to accurately compare these costs is to use the official Medicare Plan Finder tool.

Financial Assistance Programs

Recognizing that Medicare’s costs can be a significant burden for those with limited financial means, the federal and state governments offer several programs to provide assistance. These programs can help pay for premiums, deductibles, and other cost-sharing, making healthcare more affordable and accessible.

Medicare Savings Programs (MSPs)

Medicare Savings Programs are state-administered programs that help eligible individuals pay for their Medicare costs. If you qualify for an MSP, your state will help pay for your premiums and, in some cases, your deductibles, coinsurance, and copayments.

There are four distinct MSPs, each with its own eligibility criteria and level of assistance. It’s important to apply even if you think your income might be slightly over the limit, as some states have more generous rules.

Medicare Savings Programs (2025) – Eligibility & Benefits

Resource limits do not include your home, one car, or a burial plot. Income limits are slightly higher in Alaska and Hawaii.

Extra Help (Low-Income Subsidy for Part D)

The Extra Help program, also known as the Low-Income Subsidy (LIS), is a federal program that helps people with limited income and resources pay for their Medicare Prescription Drug Plan (Part D) costs. This assistance can significantly lower or even eliminate monthly premiums, annual deductibles, and prescription copayments.

A powerful connection exists between MSPs and Extra Help: if you qualify for the QMB, SLMB, or QI program, you automatically qualify for Extra Help. Your state will inform Medicare, and you’ll be enrolled in the subsidy program.

If you don’t automatically qualify, you can apply for Extra Help directly through the Social Security Administration. The application can be completed online and requires information about your income and resources (such as bank account balances and retirement accounts).

Medicaid

Medicaid is a joint federal and state program that provides health coverage to millions of Americans with low incomes. For individuals who are eligible for both Medicare and Medicaid (known as “dually eligible”), the two programs work together to cover healthcare costs.

In this arrangement, Medicare always pays first for covered services, and Medicaid then acts as a secondary payer, covering costs that Medicare doesn’t, such as long-term care and most out-of-pocket expenses. If you’re dually eligible, you’ll likely qualify for a Medicare Savings Program and Extra Help automatically.

Essential Medicare Resources

Navigating Medicare requires reliable information and the right tools. The following official resources are invaluable for making informed decisions, comparing your options, and getting personalized assistance.

Medicare Plan Finder Tool

This is the official and most powerful government tool for comparing specific Medicare Advantage (Part C) and Prescription Drug (Part D) plans available in your zip code. You can input your medications and preferred pharmacies to get a personalized estimate of your total annual costs for each plan.

Access the Medicare Plan Finder to compare plans in your area.

The “Medicare & You” Handbook

This is the official government guide to Medicare, mailed to all beneficiary households each fall. It serves as an essential reference for understanding your benefits, rights, protections, and costs. You can also download the latest version at any time.

State Health Insurance Assistance Program (SHIP)

SHIP is a national network of highly trained, unbiased counselors who provide free, one-on-one assistance with all things Medicare. They can help you understand your options, compare plans, and solve problems. This is a free service provided by your state.

Find your local SHIP office for personalized assistance.

Official Government Websites

These are the primary sources for all official Medicare and Social Security information:

• Medicare.gov – The official Medicare website
• SSA.gov – The official Social Security Administration website

Phone Support

For direct assistance with questions, enrollment, and plan information:

• Medicare: Call 1-800-MEDICARE (1-800-633-4227). TTY users can call 1-877-486-2048
• Social Security: Call 1-800-772-1213. TTY users can call 1-800-325-0778

Data and Research

For data-driven insights into government programs and spending, including Medicare’s role in the federal budget, USAFacts provides non-partisan analysis of government programs and their costs.

Understanding Medicare doesn’t have to be overwhelming. With the right information and resources, you can make informed decisions about your healthcare coverage that will serve you well in retirement. Take advantage of the free counseling services available through SHIP and use the official government tools to compare your options based on your specific needs and budget.

Our articles make government information more accessible. Please consult a qualified professional for financial, legal, or health advice specific to your circumstances.