Guides / medicare-basics
Medicare Basics Guide
Key takeaways
- Understanding Medicare is essential as you approach age 65. This guide breaks down the four parts and how they work together.
- What it covers:
- Cost: Most people pay no premium (if you or your spouse worked 10+ years paying Medicare taxes).
Understanding Medicare is essential as you approach age 65. This guide breaks down the four parts and how they work together.
The Four Parts of Medicare
Part A: Hospital Insurance
What it covers:
- Inpatient hospital care
- Skilled nursing facility care
- Hospice care
- Home health care
Cost: Most people pay no premium (if you or your spouse worked 10+ years paying Medicare taxes).
Deductible (2026): $1,676 per benefit period.
Part B: Medical Insurance
What it covers:
- Doctor visits
- Outpatient care
- Preventive services
- Medical equipment
- Mental health services
Cost: Standard premium $185/month (higher for high incomes).
Deductible (2026): $257/year.
Part C: Medicare Advantage
What it is: Private insurance plans that combine Part A, Part B, and usually Part D.
Pros:
- Often includes prescription drug coverage
- May include extra benefits (vision, dental, hearing)
- Out-of-pocket maximum limits your costs
Cons:
- Network restrictions
- Need referrals for specialists (HMO plans)
- More complex than Original Medicare
Part D: Prescription Drug Coverage
What it covers: Prescription medications.
How it works:
- You pay a monthly premium
- Annual deductible (up to $590 in 2026)
- Copays/coinsurance for medications
- Coverage gap ("donut hole") applies at certain spending levels
Original Medicare vs Medicare Advantage
Feature
Original Medicare
Medicare Advantage
Flexibility
See any doctor who accepts Medicare
Network restrictions
Out-of-pocket max
None
Yes ($8,850 limit in 2026)
Drug coverage
Need separate Part D plan
Usually included
Supplemental coverage
Can buy Medigap
Cannot combine with Medigap
When to Enroll
Initial Enrollment Period: 7-month window centered around your 65th birthday
- 3 months before your 65th birthday month
- Your birthday month
- 3 months after your birthday month
Late enrollment penalty: If you don't enroll when first eligible and don't have other coverage, you may pay higher premiums permanently.
Who's Eligible
- Age 65 or older
- Under 65 with qualifying disability
- Any age with End-Stage Renal Disease (ESRD) or ALS
FAQ
Q: Is Medicare free?
A: Part A is typically premium-free. Part B, Part D, and Medicare Advantage have premiums.
Q: Do I need both Part A and Part B?
A: Most people need both. Part B can be delayed if you have employer coverage.
Q: Should I choose Original Medicare or Medicare Advantage?
A: Depends on your needs. Original Medicare = more flexibility. Medicare Advantage = lower costs but networks.