Medicare 101

Medicare is the federal health insurance program for people age 65 and older, and for certain younger adults with disabilities. It’s made up of two main parts from the government: 

Part A (hospital coverage)

Part B (medical coverage)

Together, these are called Original Medicare, which usually covers about 80 percent of approved costs. Seniors can then choose between two main options to fill the gaps: either add a Medicare Supplement (Medigap) and a separate drug plan (Part D), or choose a Medicare Advantage plan (Part C) that combines medical, hospital, and often drug and extra benefits into one card. Most people sign up through Social Security at ssa.gov/medicare or by calling 1-800-772-1213, and those already receiving Social Security are usually enrolled automatically. For help comparing options or enrolling, seniors can also work with a licensed Medicare agent—free of charge—to make sure their doctors, prescriptions, and budget all fit the plan they choose.

Medicare is federal health insurance for people 65 and older or with certain disabilities, while Medicaid is a state and federal program that helps people with low income pay for medical and long-term care costs. Some seniors qualify for both, which can greatly reduce their out-of-pocket expenses.

You can avoid Medicare penalties by signing up on time and maintaining continuous coverage. Enroll in Part A and Part B during your Initial Enrollment Period (three months before to three months after your 65th birthday) unless you have creditable employer coverage. If you delay without qualifying coverage, you’ll pay lifetime penalties added to your premiums. For Part D drug coverage, enroll when first eligible or make sure your existing insurance counts as “creditable” to avoid the late-enrollment penalty.

It depends on your health needs and budget. Medicare Advantage plans usually have lower monthly costs and include extra benefits like dental, vision, and prescriptions—but you’ll have copays and must use their provider network. Medicare Supplement (Medigap) plans cost more each month but cover most out-of-pocket costs and let you see any doctor that accepts Medicare.