What Is Medicare? Types, Eligibility, Costs & Coverage Explained
Learn what Medicare is, how it works, who qualifies, and what it covers. Discover the different parts of Medicare, including Part A, B, C, and D, along with costs and enrollment options.
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What Is Medicare?
It is a health insurance program that is being run by the federal government of the United States to cover medical expenses mainly for persons aged 65 and over. But it is also given to some individual persons under 65 who are suffering from some medical condition or are somehow disabled. It provides for the payment of medical bills, but patients would have to bear part of the cost. The fact that there is a system of sharing costs among the people allows them to have many options as to where they can go for care, but it can sometimes be quite confusing.
Key Takeaways
Medicare is a federally funded health insurance program that supports people 65 and older, younger individuals with certain disabilities, and those diagnosed with end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS).
The Medicare health insurance program consists of four parts:
Part A: Hospital Insurance
Part B: Medical Insurance
Part C (Medicare Advantage): Private insurance plans that bundle Parts A, B, and often D
Part D: Prescription drug coverage
If you or your spouse paid Medicare taxes for at least 10 years, you’re eligible for premium-free Part A.
Other Medicare parts—like Part B, C, and D—require monthly premiums, which vary based on coverage and income level.
How Medicare Works
Medicare can be seen as an American federal health insurance program, which acts primarily to ensure the availability of basic medical care to older Americans. It is maintained under the U.S.government and governed by the Centers for Medicare & Medicaid Services (CMS). Payroll taxes serve as the major source of funding, under the Federal Insurance Contributions Act (FICA).
Who qualifies it then? Primarily, it is for persons aged 65 and older, although coverage is offered to a restricted number of individuals who are younger. Some qualifying scenarios are: having a disability; undergoing treatment for end-stage renal disease (permanent kidney failure); and amyotrophic lateral sclerosis (also known as Lou Gehrig’s disease). These, one might say, are exceptions to the “65 and older rule.”
What is important to note: If you are already receiving Social Security benefits when you turn 65, then you get automatically enrolled in Medicare Part A and Part B. Part A pertains to hospital expenses, while Part B pertains to doctors’ visits and outpatient care. The best part is that you need to do nothing to start this enrollment in Parts A and B. It happens automatically.
While this is the case, and those who do not get automatic enrollment have to enroll themselves, Medicare is more than just Parts A and B.
Qualifications for Medicare
If being one of the very late years in life or caring for whomever is considered one of those late years lies in your hand, it is crucial to understand what goes into the criteria for qualification for Medicare. Medicare is a federal blanket of health insurance, predominantly meant for people 65 years and older, but it also covers underage folks with disabilities or conditions that qualify.
Let us put it simply in human terms-right, so you know where you or your loved one stands in the Medicare qualification process.
Who Is Eligible for Medicare at Age 65?
Most U.S. citizens and lawful permanent residents become eligible for Medicare when they turn 65. But to receive Medicare Part A (hospital insurance) at no cost, you must meet at least one of the following Medicare eligibility requirements:
You’re already receiving Social Security or Railroad Retirement Board (RRB) benefits—or you’re eligible to receive them.
Your current or late spouse qualifies for Social Security or RRB benefits.
You or your spouse worked a government job long enough to pay into Medicare taxes.
You’re the parent of a deceased child who was considered fully insured under Social Security.
If you don’t meet any of these, you can still get Medicare Part A—but you’ll have to pay a monthly premium.
Can You Get Medicare Before Age 65?
Yes, and many people do. You may qualify for Medicare Part A at no cost before age 65 if any of the following apply:
You’ve received Social Security Disability Insurance (SSDI) for at least 24 months.
You get a disability pension from the Railroad Retirement Board and meet specific conditions.
You have ALS (Amyotrophic Lateral Sclerosis) and receive SSDI.
You’ve worked in a government job and paid Medicare taxes long enough and now qualify for SSDI benefits.
You’re at least 50 years old and are a surviving spouse (even if divorced) or child of someone who worked a Medicare-covered or Social Security-qualified job.
You have End-Stage Renal Disease (ESRD), are on regular dialysis, or have had a kidney transplant—and either you or your spouse/parent has the required work history in Medicare-covered employment.
What About Medicare Part B?
Once you qualify for Medicare Part A, you can also sign up for Medicare Part B, which covers outpatient services, doctor visits, preventive care, and more.
However, Medicare Part B is not free. You’ll need to pay a monthly premium, which varies based on your income level.
If you don’t qualify for free Part A, you can still buy Part B coverage independently if you:
Are 65 or older
Are a U.S. citizen, or a lawfully admitted noncitizen who has lived in the U.S. continuously for at least five years
How to Enroll in Medicare
Enrolling is easier than you might think. Simply visit the official Social Security Administration (SSA) website to apply online.
Types of Medicare
If you’re nearing retirement or guiding someone who is, Medicare can be daunting. But we’re here to help! We’ll provide a straightforward breakdown of the four major types of Medicare coverage. These plans help millions of Americans to cope with medically-related expenses throughout their lives, especially toward the ends of their lives. No matter if you are simply becoming eligible for Medicare, or helping someone obtain their options, this guide will take you through all of the coverages and what each includes.
1. Medicare Part A: Hospital Insurance
Medicare Part A is your foundation for inpatient care. It covers major healthcare needs like hospital stays, skilled nursing facility care, hospice services, and some types of home health care. However, it’s important to know what it doesn’t cover — long-term or custodial care such as assisted living is not included.
If you’re already receiving Social Security benefits, you’ll be automatically enrolled. Otherwise, you can apply directly through the Social Security Administration website.
Here’s what you’ll pay out-of-pocket under Part A for 2024 and 2025:
| Coverage Details | 2024 | 2025 |
|---|---|---|
| Inpatient hospital deductible | $1,632 | $1,676 |
| Daily copay (Days 61–90) | $408 | $419 |
| Lifetime reserve day copay | $816 | $838 |
| Skilled nursing facility copay (Days 21–100) | $204 | $209.50 |
2. Medicare Part B: Medical Coverage
Medicare Part B covers services outside of the hospital — think doctor visits, outpatient care, preventive services, mental health, and even ambulance transport. It’s an essential plan for maintaining day-to-day health.
The standard monthly premium for Part B is:
$174.70 in 2024
$185 in 2025
Deductibles are $204 in 2024 and $257 in 2025.
However, if your Modified Adjusted Gross Income (MAGI) exceeds a certain threshold, you’ll pay more:
2024: Over $103,000 (single) or $206,000 (joint)
2025: Over $106,000 (single) or $212,000 (joint)
3. Medicare Part C: Medicare Advantage Plans
Medicare Part C, also called Medicare Advantage, is offered by private insurers. To qualify, you must already have Parts A and B. These plans combine hospital and medical coverage, and often include extra benefits like dental, vision, hearing, and even gym memberships.
One of the biggest perks? Out-of-pocket spending caps — something Original Medicare doesn’t offer. But keep in mind: Advantage plans can come with preauthorization requirements and limited provider networks. Switching back to Original Medicare later might require medical underwriting, so plan ahead.
4. Medicare Part D: Prescription Drug Coverage
Medicare Part D helps you cover prescription drug costs, filling the gaps that Original Medicare misses. If you’re enrolled in Part A or B, you can opt into Part D — either as a standalone plan or as part of a Medicare Advantage plan.
For 2025, the average basic Part D premium is projected at $36.78 per month. However, most enrollees pay less, and the estimated average premium across all plans is about $45 monthly.
How the Inflation Reduction Act Affects Part D
Thanks to the Inflation Reduction Act of 2022, Medicare Part D has seen meaningful updates, especially beneficial for low- and middle-income beneficiaries:
Insulin capped at $35/month
No cost-sharing for adult vaccines
$2,000 out-of-pocket cap starting in 2025
Expanded Extra Help (LIS) program for those earning up to 150% of the federal poverty level
Medicare vs. Medicaid
Medicare and Medicaid are government-backed health insurance programs that have distinct eligibility conditions for the different programs. Some people qualify for both insurance programs, typically referred to as “dual eligibles.”
Although Medicare is intended to cover people 65 years and older including some younger people who experience certain health conditions, Medicaid is a federally funded, state-operated program that provides health insurance coverage for low-income children and adults. If you are going to apply for Medicaid, you can expect income qualifications.1819
Every person with active Medicaid is entitled to receive services like doctor and nursing care, hospital stays, X-rays, home health care, and lab and X-ray services. States will frequently offer additional coverage for prescriptions, physical therapy, dental services, and medical transportation.
The History of the Medicare Program
Medicare history and evolution began in 1965, when President Lyndon B. Johnson signed legislation creating Medicare and Medicaid. Medicare originally had two parts: Part A, Hospital Insurance, and Part B, Medical Insurance. When considered together, these two parts are now referred to as Original Medicare.
Medicare has evolved substantially over the decades. Eligibility and benefit range widened by Congress. The 1972 expansion included covering and paying for people under age 65 with disabilities, people of any age with end stage renal disease (ESRD) that required dialysis or a kidney transplant, and people over age 65 who signed up for Medicare. Noticeably, this was a critical move in the history and evolution of Medicare to provide a larger segment of vulnerable populations access to healthcare care.
Perhaps the biggest change began back in 2003 when the Medicare Drug Improvement and Modernization Act (MMA) was enacted, creating Medicare Advantage Plans, also known as Part C and MA Plans, which are private insurance plans authorized by Medicare. The MMA also created Part D components of Medicare, which is an optional prescription drug benefit that began in 2006. Modernization through the MMA represented the biggest change in 38 years, and shaped the essential narrative of the history and evolution of Medicare.
With COVID-19 impacting Medicare as a safety net for the public health crisis, President Donald Trump signed the CARES Act on March 27, 2020, to provide $2 trillion in relief, which expanded Medicare’s benefits related to COVID-19 services and improved access to telehealth services. The CARES Act also increased reimbursements for hospital stays and durable medical equipment due to COVID-19, and illustrated what the role of Medicare could be in times of urgent public health circumstances.
The latest modernization was in 2022, with the passage of the Inflation Reduction Act, which made changes to how Medicare provides prescription drug coverage to decrease affordability to seniors and those with chronic conditions, and continues the narrative of Medicare’s history and evolution.From its origins to its modern-day form, Medicare has consistently evolved to meet the needs of Americans. With each legislative update, it reflects the nation’s commitment to healthcare access, improvement, and affordability for all.
FAQs
1. What is Medicare?
Medicare is a U.S. federal health insurance program primarily for individuals aged 65 or older, though it also covers certain younger people with disabilities or specific medical conditions (like end-stage renal disease or ALS). It helps subsidize healthcare services through several parts: A, B, C, and D
2. Who is eligible for Medicare?
Eligibility includes U.S. citizens or permanent residents who:
Are aged 65 or older;
Receive Social Security benefits when turning 65 (automatically qualifying them for Part A and B)
Or are younger but have disabilities and have received disability benefits for 24 months, or have certain conditions like permanent kidney failure or ALS
3. What are the parts of Medicare and what do they cover?
Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing, hospice, and home health care
Part B (Medical Insurance): Covers outpatient services like doctor visits, lab tests, preventive care, and medical equipment
Part C (Medicare Advantage): Private plans that bundle Part A, B, and usually D, and may offer extra benefits like dental, vision, or fitness
Part D (Prescriptions): Provides prescription drug coverage
4. How do I enroll in Medicare?
If you’re already receiving Social Security at age 65, you’re automatically enrolled in Part A and Part B
If not, you must sign up during your Initial Enrollment Period, which begins 3 months before your 65th birthday, includes your birth month, and extends 3 months after
Parts C and D require separate enrollment, and there are specific open enrollment periods each year to start or switch plans
5. What isn’t covered by Original Medicare (Parts A & B)?
It does not cover long‑term custodial care, routine vision, dental, or hearing services, dentures, and may have significant cost-sharing requirements without an annual out-of-pocket limit
To fill coverage gaps, people often choose Medicare Advantage (Part C), Part D, or Medigap supplemental plan
The Bottom Line
Medicare is a crucial federal health insurance program that mainly provides health coverage to people who are 65 or older, as well as some younger individuals with disabilities. With several parts, which function to meet different healthcare needs, it is essential for supporting millions of Americans to remain financially able to pay for their medical expenses . Although Medicare does offer extensive coverage, it does not meet all needs and many people choose to purchase supplemental policies or join a Medicare Advantage plan. It is important to understand how each part works and how much each part costs when making decisions about your health care, especially when you are approaching retirement.
