What is Medicare?
Federal health insurance for people 65 and over. It is not one policy. It is four parts that you assemble, which is exactly why it feels harder than it should.
The short version
Medicare is health insurance run by the federal government. You become eligible at 65, whether or not you have retired. Some people under 65 qualify too: after 24 months of Social Security disability payments, or immediately with end-stage kidney disease or ALS.
It is paid for partly by the payroll taxes you have been paying your whole working life, and partly by a monthly premium you will pay from 65 onward. It covers a great deal. It does not cover everything, and the gaps are where most of the anxiety lives.
Who runs which piece
This trips people up constantly, so it is worth being exact. Three different organizations are involved, and they do not talk to each other as much as you would hope.
- Social Security signs you up and collects your premium.
- Medicare sets the rules and pays the claims for Parts A and B.
- Private insurance companies sell the pieces that fill the gaps: Medigap policies, Medicare Advantage plans and Part D drug plans.
We are in the third group. We are a licensed agency, not a government office, and we cannot enroll you in Part A or Part B. That part you do yourself, through Social Security, and it is genuinely straightforward.
The four parts, in one line each
Then read the full explanation of each part when you are ready.
Part A is the hospital half
Overnight stays, rehabilitation after a hospital stay, hospice, some home health care. Most people pay nothing each month for it.
Part B is the doctor half
Office visits, tests, scans, outpatient surgery, walkers and wheelchairs, preventive care. You pay a premium every month for this one.
Part C bundles the first two
Also called Medicare Advantage. A private plan that delivers A and B in one package, usually with drugs and extras, in exchange for using a network.
Part D is the pill half
Prescription drug coverage, bought from a private company. You need it or something as good, or a penalty follows you for life.
What Medicare does not cover
People are often shocked by this list, so we would rather you read it now than find out in a dentist’s chair. Original Medicare does not pay for:
- Routine dental care, dentures, most dental surgery
- Routine eye exams, glasses or contact lenses
- Hearing exams for fitting a hearing aid, and hearing aids themselves
- Long-term care, meaning help with dressing, bathing and eating over months or years
- Most care outside the United States
- Cosmetic surgery, and most acupuncture beyond a limited allowance for back pain
Many Medicare Advantage plans include some dental, vision and hearing benefits. The size of those benefits varies enormously between plans, and the headline number in the advert is usually an annual maximum rather than what a set of dentures actually costs. We will read the real numbers with you.
The gap that matters most
Here is the single most important fact on this page. Under Original Medicare, after you meet the yearly Part B deductible, you pay 20% of the cost of nearly everything, and there is no ceiling on that 20%.
Twenty percent of a routine blood test is nothing to worry about. Twenty percent of a course of cancer treatment is not. Employer plans nearly always have an out-of-pocket maximum. Original Medicare, on its own, does not.
That single gap is why almost everyone adds something: either a Medigap policy that pays that 20% for you, or a Medicare Advantage plan that replaces the whole structure and comes with a yearly ceiling built in. Choosing between those two is the real decision, and it is the one we spend most of our time on.
What to do next
- If you are near 65, read the turning-65 checklist. It is in date order.
- If you want the detail on each part, read Parts A, B, C and D explained.
- If a word here was unfamiliar, it is in the glossary, defined without using other jargon.
Still not sure where you fit?
Tell us your birthday and whether you still have coverage from a job. Those two facts decide almost everything, and the call takes about ten minutes.