Medicare Basics
What Is Medicare? • Who Is Eligible? • Parts A, B, C & D
What Is Medicare?
Let’s start with the Medicare basics. Medicare is a federal health insurance program for people 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD).
It isn’t “free healthcare.” It’s health insurance with different parts, costs, and rules — think of it as a toolbox where each part covers different services, and you choose how the pieces fit together.
Unlike a single all-in-one health plan, Medicare is really several programs bundled under one name. Part A and Part B make up “Original Medicare,” run directly by the federal government. Part C (Medicare Advantage) and Part D (prescription drug coverage) are run by private insurance companies that contract with Medicare and follow its rules. Many people also add a Medigap (Medicare Supplement) policy alongside Original Medicare to help cover out-of-pocket costs — see our Medicare Advantage vs. Original Medicare vs. Medigap comparison for the full breakdown. For official plan details, you can also visit Medicare.gov directly.
Who Is Eligible for Medicare?
- Are 65 or older
- Are under 65 with certain qualifying disabilities
- Have End-Stage Renal Disease (ESRD) or ALS
Most people become eligible at 65. If you’re already receiving Social Security benefits, you’ll be automatically enrolled in Parts A and B — no action needed. If not, you’ll need to sign up yourself during your Initial Enrollment Period (IEP): a 7-month window that starts 3 months before your 65th birthday month and ends 3 months after it.
Missing this window can mean a late enrollment penalty added to your Part B premium for as long as you have Medicare, so it’s worth marking on the calendar. If you’re still working past 65 with coverage through a qualifying employer plan, you may be able to delay enrollment without a penalty — but the rules depend on your employer’s size, so check before assuming you’re covered. Use our Medicare Enrollment Timeline Calculator to find your exact window based on your birth month.
The 4 Parts of Medicare
Medicare has four parts. Each one plays a different role.
Part A
Hospital Insurance
Covers inpatient hospital stays, skilled nursing facility care (for a limited time after a qualifying hospital stay), hospice care, and some home health care. Most people pay $0 premium because they or a spouse paid Medicare taxes for at least 10 years while working — though you’ll still owe a deductible per benefit period and coinsurance if a hospital stay runs long.
One common misunderstanding: Part A doesn’t cover ongoing custodial care, like help with daily living in a nursing home for a chronic condition. That falls under long-term care, which Medicare generally doesn’t pay for.
Most people pay $0 premium.
Part B
Medical Insurance
Covers doctor visits, outpatient care, preventive services, lab work, durable medical equipment, and more. Nearly everyone pays a monthly premium, plus an annual deductible before Medicare starts sharing costs — after that, you typically pay 20% coinsurance for most services.
Higher earners pay more through an income-related surcharge called IRMAA, based on your tax return from two years prior. See our 2026 Part B cost breakdown for the exact premium and deductible amounts, or check your own bracket with the IRMAA Calculator.
You pay a monthly premium.
Part C
Medicare Advantage
Offered by private insurance companies that bundle Part A and Part B, and often Part D, into a single plan. Many Medicare Advantage plans also include extra benefits Original Medicare doesn’t cover, like dental, vision, and hearing.
In exchange, you’re usually limited to a specific network of doctors and hospitals, similar to an HMO or PPO. Premiums vary by plan and area — some are $0, but you’ll still pay your Part B premium. See how Medicare Advantage stacks up against Original Medicare plus Medigap in our full comparison guide.
Premium varies by plan.
Part D
Prescription Drug Coverage
Helps cover the cost of prescription medications. Offered by private insurance companies, either as a standalone plan alongside Original Medicare or bundled into a Medicare Advantage plan.
Each plan has its own list of covered drugs (called a formulary) and its own pricing tiers, so the “best” plan depends entirely on which medications you take. You pay a monthly premium, and going without creditable drug coverage for 63 days or more after you’re first eligible can trigger a permanent late enrollment penalty — one more reason to sign up during your Initial Enrollment Period even if you don’t take prescriptions yet.
You pay a monthly premium.
Ready to Explore Your Options?
When you’re ready, compare plans available in your area and find the coverage that fits your needs and budget. If you’re deciding between Original Medicare with a Medigap policy or a Medicare Advantage plan, our coverage comparison guide walks through the tradeoffs in plain English, and our Medigap guide covers what a supplement policy actually adds.
This guide is for educational purposes only and is not intended as legal or insurance advice.