Medicare 101: Everything
You Need to Know
Your complete guide to understanding Medicare — from the four parts of coverage to enrollment periods, costs, and choosing the right plan for your needs.
What Is Medicare?
Medicare is the federal health insurance program for Americans aged 65 and older, as well as certain younger individuals with disabilities or specific medical conditions. Signed into law by President Lyndon B. Johnson in 1965, Medicare has provided healthcare coverage to millions of Americans for over 50 years.
Original Medicare consists of two parts: Medicare Part A (hospital insurance) and Medicare Part B (medical insurance). Together, they cover a wide range of inpatient and outpatient services. With Original Medicare, you can visit any doctor or hospital in the country that accepts Medicare — no referrals or prior authorizations required.
However, Original Medicare doesn't cover everything. It leaves you responsible for 20% of outpatient costs with no annual out-of-pocket maximum. That's why many beneficiaries add supplemental coverage — either a Medicare Supplement (Medigap) plan or a Medicare Advantage (Part C) plan — to help manage costs and fill coverage gaps.
- 67M+
- Americans Covered
- 1965
- Established
- 4
- Parts of Medicare
- 97%
- Doctors Accept It
The Four Parts of Medicare
Medicare is divided into four distinct parts, each covering different aspects of your healthcare needs.
Part A: Hospital Insurance
Covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care.
What It Covers
- Inpatient hospital stays
- Skilled nursing facility care (up to 100 days)
- Hospice care
- Some home health care services
What It Doesn't Cover
- Long-term care (custodial care)
- Most dental, vision, and hearing
- Private-duty nursing
Cost: Most people pay $0 in premiums (if you or your spouse paid Medicare taxes for 10+ years). The 2026 deductible is $1,736 per benefit period.
Part B: Medical Insurance
Covers doctor visits, outpatient care, preventive services, and durable medical equipment.
What It Covers
- Doctor and specialist visits
- Outpatient surgery and procedures
- Preventive services (screenings, vaccines)
- Durable medical equipment (wheelchairs, walkers)
- Mental health services
- Ambulance services
What It Doesn't Cover
- Most dental, vision, and hearing
- Cosmetic surgery
- Routine foot care
- Care outside the U.S. (with limited exceptions)
Cost: The standard 2026 monthly premium is $202.90. After the $283 annual deductible, Medicare covers 80% and you pay 20%.
Part C: Medicare Advantage
An alternative to Original Medicare offered by private insurers. Bundles Part A, Part B, and usually Part D into one plan.
What It Covers
- Everything Part A and Part B cover
- Often includes Part D (prescription drugs)
- May include dental, vision, and hearing
- May include fitness programs (e.g., SilverSneakers)
- Annual out-of-pocket maximum
What It Doesn't Cover
- Out-of-network care (HMO plans)
- Services not covered by Original Medicare
- Coverage may vary by plan and region
Cost: Many plans have $0 premiums (you still pay your Part B premium). Copays and coinsurance vary by plan. Annual out-of-pocket max applies.
Part D: Prescription Drug Coverage
Covers prescription medications through private insurance plans approved by Medicare.
What It Covers
- Brand-name prescription drugs
- Generic prescription drugs
- Specialty medications
- Vaccines covered under Part D
What It Doesn't Cover
- Drugs not on the plan's formulary
- Over-the-counter medications
- Drugs covered under Part A or Part B
Cost: Monthly premiums vary by plan (national average around $55/month in 2026). Deductibles, copays, and coinsurance vary. Late enrollment penalties may apply.
Who Is Eligible for Medicare?
Most Americans become eligible at age 65, but there are other qualifying circumstances.
Age 65 or Older
U.S. citizens and permanent residents who have lived in the U.S. for at least 5 consecutive years are eligible for Medicare at age 65.
Under 65 with Disabilities
If you've been receiving Social Security Disability Insurance (SSDI) benefits for at least 24 months, you automatically qualify for Medicare regardless of age.
End-Stage Renal Disease (ESRD)
Individuals diagnosed with permanent kidney failure requiring dialysis or a kidney transplant are eligible for Medicare at any age.
Amyotrophic Lateral Sclerosis (ALS)
Individuals diagnosed with ALS (Lou Gehrig's disease) automatically qualify for Medicare as soon as their SSDI benefits begin — no 24-month waiting period.
Medicare Enrollment Periods
Understanding when you can enroll is just as important as understanding what Medicare covers. Missing your window can result in lifelong penalties.
Initial Enrollment Period (IEP)
7-month window around your 65th birthday
Your first chance to enroll in Medicare. It starts 3 months before the month you turn 65, includes your birthday month, and ends 3 months after. This is the most important enrollment window — missing it can result in penalties and coverage gaps.
Annual Enrollment Period (AEP)
October 15 – December 7 each year
During this period, you can switch from Original Medicare to Medicare Advantage (or vice versa), change your Medicare Advantage plan, or join, switch, or drop a Part D plan. Changes take effect January 1.
Special Enrollment Period (SEP)
Triggered by qualifying life events
If you experience certain life events — such as losing employer coverage, moving to a new area, or qualifying for Medicaid — you may be eligible for a Special Enrollment Period. This allows you to make changes outside the standard enrollment windows.
General Enrollment Period (GEP)
January 1 – March 31 each year
If you missed your Initial Enrollment Period and don't qualify for a Special Enrollment Period, you can sign up during the General Enrollment Period. Coverage begins July 1. Late enrollment penalties may apply.
Medicare Costs & Premiums in 2026
Here's a snapshot of the key costs you can expect with Original Medicare in 2026.
| Cost Type | Part A | Part B |
|---|---|---|
| Monthly Premium | $0 for most* | $202.90 |
| Annual Deductible | $1,736 per benefit period | $283 |
| Coinsurance | $0 for first 60 days | 20% of approved amount |
| Out-of-Pocket Max | No limit | No limit |
*Part A is premium-free if you or your spouse paid Medicare taxes for at least 40 quarters (10 years). Higher-income earners may pay more for Part B (IRMAA surcharge).
Medicare Supplement vs. Medicare Advantage
The two main paths to supplementing your Original Medicare coverage. Here's how they compare.
| Feature | Medicare Supplement | Medicare Advantage |
|---|---|---|
| How It Works | Supplements Original Medicare — pays what Medicare doesn't | Replaces Original Medicare — private insurer manages your benefits |
| Doctor Network | Any doctor that accepts Medicare nationwide | Usually limited to plan's network (HMO/PPO) |
| Monthly Premium | Higher (varies by plan, age, location) | Often $0 (you still pay Part B premium) |
| Out-of-Pocket Costs | Low to none (Plan G covers nearly everything) | Copays, coinsurance at time of service |
| Out-of-Pocket Max | Effectively $0 with comprehensive plans | Required by law (varies by plan) |
| Prescription Drugs | Requires separate Part D plan | Usually included |
| Extra Benefits | Not included | Often includes dental, vision, hearing, fitness |
| Referrals Needed | No | Yes (HMO) / No (PPO) |
| Best For | Those who want predictable costs and nationwide access | Those who want lower premiums and bundled benefits |
Frequently Asked Questions
Quick answers to the most common Medicare questions.
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