What is Medicare?

Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant). Understanding how Medicare works is essential for making informed decisions about your healthcare coverage in retirement.

The Four Parts of Medicare

Medicare Part A (Hospital Insurance)

Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. Most people don't pay a premium for Part A if they or their spouse paid Medicare taxes while working for at least 10 years (40 quarters). Part A has a deductible for each benefit period, and there are coinsurance costs for extended hospital stays.

Medicare Part B (Medical Insurance)

Part B covers certain doctors' services, outpatient care, medical supplies, and preventive services. You pay a monthly premium for Part B, which is based on your income. The standard Part B premium for 2026 is adjusted annually. Part B also has an annual deductible, after which you typically pay 20% of the Medicare-approved amount for most services.

Medicare Part C (Medicare Advantage)

Medicare Advantage Plans are offered by private companies approved by Medicare. These plans provide all your Part A and Part B coverage and often include additional benefits like vision, hearing, dental, and prescription drug coverage. Many Medicare Advantage plans have lower out-of-pocket costs than Original Medicare but may require you to use doctors and hospitals within a network.

Medicare Part D (Prescription Drug Coverage)

Part D adds prescription drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private-Fee-for-Service Plans, and Medicare Medical Savings Account Plans. These plans are offered by insurance companies and other private companies approved by Medicare. Each plan has its own list of covered drugs (formulary) and costs can vary significantly.

Medicare Enrollment Periods

Initial Enrollment Period (IEP)

Your Initial Enrollment Period is a 7-month period that begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65. This is your first opportunity to enroll in Medicare Parts A and B.

General Enrollment Period (GEP)

If you missed your Initial Enrollment Period, you can sign up for Medicare Part A and/or Part B during the General Enrollment Period, which runs from January 1 to March 31 each year. Your coverage will begin July 1, and you may have to pay a late enrollment penalty.

Annual Election Period (AEP)

Also known as Open Enrollment, this period runs from October 15 to December 7 each year. During this time, you can make changes to your Medicare coverage, including switching from Original Medicare to Medicare Advantage, changing Medicare Advantage plans, or joining, switching, or dropping a Part D prescription drug plan.

Choosing the Right Medicare Coverage

When selecting your Medicare coverage, consider your current health needs, the medications you take, your preferred doctors and hospitals, your budget for premiums and out-of-pocket costs, and whether you travel frequently. It's important to review your coverage annually during the Annual Election Period to ensure it still meets your needs.

Getting Help with Medicare Decisions

Making Medicare decisions can be complex. Free help is available through your State Health Insurance Assistance Program (SHIP), which provides unbiased counseling about Medicare. You can also visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227) for assistance.