Confused about the ins and outs of Medicare? Join the club. “Medicare can be super confusing,” says Steve Shain, a partner at LTC Ally, a long-term care consulting company in Lakewood, New Jersey, that works with health care providers and insurers.

All that confusion can lead to mistakes — and mistakes can result in late-enrollment penalties, denied coverage, and more. Consider this your guide to Medicare, including what it is, what it covers, and when you’re eligible to start receiving benefits.

What is Medicare?

Medicare is a federal health insurance program that covers people age 65 and older and those with certain disabilities. Original Medicare, which includes Part A (hospital insurance) and Part B (medical insurance), was signed into law in 1965 as a way to help people pay for their health care expenses.

“Medicare was established in the United States because there was a problem: People needed health care very often at a later stage in their lives, and they had no money or savings to pay for it,” says Shain. The government stepped in to create a system that would hold money for health care in reserve. That’s why Medicare tax is withheld from every paycheck.

Today, Medicare consists of four parts. They include:

• Part A: Hospital insurance
• Part B: Medical insurance
• Part C: Hospital and medical insurance (also called Medicare Advantage)
• Part D: Prescription drugs

You can also purchase Medicare Supplement Insurance, or Medigap, which helps pay for medical expenses that aren’t covered under Medicare Part A and Part B.

Finding the Medicare plan that’s right for your life and budget doesn’t have to be overwhelming — eHealth is here to help. Get started now.

What is Medicare Part A (hospital insurance)?

Medicare Part A covers inpatient hospital care, including your room, meals, nursing care, and medications related to the treatment you’re receiving, says Shain. It also covers skilled nursing care, hospice care, and some home health care.

Most people qualify for premium-free Part A. That means they don’t need to pay a monthly fee for it. That’s because if either you or your spouse worked for 10 years (or 40 quarters), you’ve already paid taxes to Medicare that will cover it. If neither you nor your spouse worked for that period of time, you can buy Part A for either $274 or $499 a month, depending on how long you or your spouse worked.

Before Medicare Part A will start paying your expenses, however, you’ll have to meet your deductible. (A deductible is an amount of money that you have to pay before your insurance starts kicking in.) In 2022, the Part A deductible is $1,556.

Under Part A, you will also be responsible for copayments. The amount depends on how long you’re in the hospital:

• If you’re hospitalized for 1 to 60 days, you won’t pay anything once you’ve reached your deductible.
• From day 61 to day 90, you’ll pay $389 each day.
• From day 91 to day 150, you’ll pay $778.
• After day 150, you’ll pay all the expenses.

What is Medicare Part B (medical insurance)?

Medicare Part B covers doctor visits and services, durable medical equipment, preventive screenings, diagnostic tests, and more, says Shain.

Most people will have to pay a monthly premium of $170.10 for Part B in 2022, although people with higher incomes may have to pay more. You may also have to pay more for Part B if you didn’t enroll in it when you were first eligible. However, there are certain instances in which you can delay your Part B coverage — say, you already have health insurance through an employer, for example.

You will also have to pay an annual deductible of $233 in 2022 and usually 20% of the costs of medical services and supplies.

What doesn’t Original Medicare cover?

Original Medicare won’t cover all your health care expenses. Some of the services that aren’t paid for include:

• Long-term care (such as dressing or bathing)
• Routine dental care
• Dentures
• Eye exams for eyeglasses
• Cosmetic surgery
• Hearing aids and exams for fitting them
• Routine foot care
• Health care costs while traveling outside of the United States

What is Medicare Advantage (Part C)?

Medicare Advantage (Part C) is a Medicare-approved health insurance plan that is offered by a private insurer. Under Medicare Advantage (MA), you’ll get the same types of coverage that you would under Parts A and B. However, you’ll likely have to go to a certain network of providers for the services to be covered. With Original Medicare, you can see any doctor that accepts it.

Some Medicare Advantage plans also offer drug coverage (Part D), as well as routine dental, vision, and hearing services.

Under Medicare Advantage, the premiums, copayments, and deductibles will vary from plan to plan. There is, however, a limit to how much you’ll pay out of pocket with an MA plan, and once you reach that amount, your plan will pick up 100% of the covered costs. That’s not true of Original Medicare, which has no out-of-pocket maximum.

Keep in mind that you can’t sign up for Original Medicare and Medicare Advantage at the same time. If you have Medicare Advantage, you can’t also enroll in a Medicare Supplement Insurance plan (see below) or a stand-alone drug plan (unless your MA plan doesn’t offer it).

Each type of plan has its benefits. Medicare Advantage plans tend to bundle benefits under one policy with one premium. That can help simplify your health care. But if you travel a lot, split time between two homes, or just prefer more flexibility, Original Medicare plus Medigap may be right for you.

Ready to start exploring Medicare Advantage plans? Start here.

What is Medicare Part D (drug coverage)?

Medicare Part D helps cover the costs of prescription drugs. The price of each medication may vary from plan to plan. Part D plans usually classify drugs according to “tiers.” In general, the higher the tier, the more expensive the medication.

Many Medicare Advantage plans provide Part D coverage, but if you have Original Medicare, you’ll need to opt for a stand-alone Part D plan. Before purchasing drug coverage, it’s a good idea to make sure your medications are covered under the plan. Each policy has a list of drugs that are covered, which is called a formulary.

Even though Part D is optional, if you don’t sign up for it when you’re first eligible, you may have to pay a late-enrollment penalty to get it later. Keep in mind that Part D plans also come with their own premiums and deductibles.

Even if you don’t take any prescription medications regularly now, signing up for Part D can bring you peace of mind if something about your health changes.

What is Medicare Supplement Insurance (Medigap)?

Since Original Medicare doesn’t cover the costs of every health care service you might need, many people choose to purchase a Medicare Supplement Insurance (Medigap) plan. These plans help cover the gaps in your coverage — like the cost of your premiums and deductibles, as well as health care fees during international travel.

In general, Medigap doesn’t cover nursing home care, routine vision services, routine dental care, or hearing aids. Medigap plans also have their own premiums. Learn more about Medigap here.

Am I signed up for Medicare automatically?

If you’re already collecting Social Security or Railroad Retirement Board benefits, you’ll be automatically enrolled in Part A and Part B when you turn 65. (Keep in mind that even though you can take Social Security early — at age 62 — you can’t get Medicare until you’re 65.)

If you’ve been receiving Social Security disability benefits for 24 months, you’ll be automatically enrolled in Medicare Parts A and B starting in month 25 (even if you’re under the age of 65). If you have amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig’s disease, you’ll get Parts A and B automatically during the same month that your Social Security disability benefits start.

If you don’t fall into one of these categories, you will likely have to enroll in Medicare yourself. Don’t worry, you don’t have to figure out that part alone. We’re here to help. Find a plan that fits your budget and covers your doctor and prescriptions now.

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