# Medicare Basics: Parts, Costs, and Enrollment
> **Summary:** A plain-English guide to Medicare Parts A, B, C, and D — what each covers, what it costs, and when to enroll.
> **Publisher:** InsuraFAQ
> **Author:** InsuraFAQ Editorial Team
> **Published:** 2026-04-04
> **Updated:** 2026-10-05
> **Canonical URL:** https://insurafaq.com/insurance/medicare-basics/
> **Tags:** health, medicare, guide
> **Image:** https://insurafaq.com/_astro/medicare-basics.BBQfq-PF.webp — Older adult reviewing Medicare choices at home
## Key Takeaways
- [Medicare is federal health insurance for people 65 or older and some people under 65 with certain disabilities or conditions.](https://www.medicare.gov/basics/get-started-with-medicare/medicare-basics/parts-of-medicare)
- [Original Medicare includes Part A and Part B; Medicare Advantage is a private-plan alternative, and Part D helps cover prescription drugs.](https://www.medicare.gov/basics/get-started-with-medicare/medicare-basics/parts-of-medicare)
- Part A and Part B costs can change each year; check Medicare’s [current official cost table](https://www.medicare.gov/basics/costs/medicare-costs) before making an enrollment decision.
- [Late-enrollment penalties can apply in some situations, so confirm your own sign-up timing with Medicare.](https://www.medicare.gov/basics/costs/medicare-costs/avoid-penalties)
## Who This Is For
This guide is for adults approaching age 65, caregivers helping parents navigate Medicare, and anyone newly eligible due to a qualifying disability. If you are trying to understand what Medicare covers, what it costs, and when to enroll, this is the right place to start. For a broader look at [health insurance options](https://insurafaq.com/insurance/health/), start with the health insurance hub.
## Overview
[Medicare is federal health insurance for people 65 or older and some people under 65 with disabilities or certain conditions.](https://www.medicare.gov/basics/get-started-with-medicare/medicare-basics/parts-of-medicare) Eligibility and when coverage begins depend on the person’s circumstances.
Medicare is divided into parts, each covering different services. Understanding how these parts work together helps you choose the right combination of coverage for your needs and budget.
## Who Qualifies for Medicare
Eligibility can depend on age, disability status, work history, citizenship or residency, and the specific Medicare benefit. [Medicare’s sign-up guidance](https://www.medicare.gov/basics/get-started-with-medicare/sign-up) can help identify when and how to enroll; confirm individual eligibility with Medicare or Social Security rather than relying on a general checklist.
## Medicare Part A (Hospital Insurance)
Part A covers inpatient care and some facility-based services:
- **Inpatient hospital stays**, including semi-private rooms, meals, nursing care, and medications administered during the stay.
- **Skilled nursing facility care** (up to 100 days per benefit period following a qualifying hospital stay).
- **Home health care** when medically necessary and ordered by a doctor.
- **Hospice care** for terminally ill patients who choose comfort care over curative treatment.
### Part A costs
Part A premiums, deductibles, and daily coinsurance can change annually. [Medicare’s current Part A cost table](https://www.medicare.gov/basics/costs/medicare-costs) explains premium-free Part A, buy-in premiums, benefit-period deductibles, and inpatient cost sharing.
## Medicare Part B (Medical Insurance)
Part B covers medically necessary outpatient services:
- **Doctor visits** and outpatient care.
- **Preventive services** such as annual wellness visits, screenings, flu shots, and certain vaccinations.
- **Durable medical equipment** like wheelchairs, walkers, and oxygen equipment.
- **Lab tests, X-rays, and diagnostic imaging.**
- **Mental health services**, both outpatient therapy and some inpatient psychiatric care.
- **Ambulance services** when medically necessary.
### Part B costs
Part B premiums and deductibles can change annually, and higher-income enrollees may pay more. [Medicare’s current Part B cost table](https://www.medicare.gov/basics/costs/medicare-costs) explains the premium, deductible, and usual coinsurance; Original Medicare generally has no yearly out-of-pocket limit unless you have supplemental coverage.
That unlimited cost-sharing exposure is one reason many people add supplemental coverage through [Medigap or Medicare Advantage](https://insurafaq.com/insurance/medicare-basics/#medigap-medicare-supplement). Original Medicare does not cover routine eye exams or glasses. A standalone [vision insurance](https://insurafaq.com/insurance/vision-insurance/) plan can help cover those costs. Medicare also does not pay for funeral or burial costs — a small dedicated [final expense insurance](https://insurafaq.com/insurance/final-expense-insurance/) policy is one way seniors can keep those out-of-pocket expenses from falling on family members. Original Medicare also does not cover long-term custodial care in a nursing home or assisted-living facility beyond limited post-hospital skilled nursing days — a [long-term care insurance](https://insurafaq.com/insurance/long-term-care/) policy is the standalone product designed to fund those extended-care costs when they become likely.
## Medicare Part C (Medicare Advantage)
Medicare Advantage plans are offered by private insurance companies approved by Medicare. These plans bundle Part A and Part B coverage into a single plan and often include additional benefits.
### How Medicare Advantage works
- You must have both Part A and Part B to enroll.
- Most plans include **Part D prescription drug coverage**.
- Many plans offer extras not covered by Original Medicare, such as **dental, vision, hearing, and fitness benefits**.
- Plans use provider networks (HMO, PPO, or HMO-POS), so you may need to use in-network doctors and hospitals. If you want to learn more about [network types](https://insurafaq.com/insurance/types-of-health-insurance-plans/), see the health plan types guide.
- Medicare Advantage plans have an **[annual out-of-pocket maximum](https://insurafaq.com/insurance/out-of-pocket-maximum-explained/)**, which Original Medicare does not.
### Medicare Advantage costs
You still pay the Part B premium. Some Advantage plans charge an additional monthly premium, while others charge $0 extra. Copays, coinsurance, and deductibles vary by plan. Compare plans carefully using Medicare.gov's Plan Finder tool.
## Medicare Part D (Prescription Drug Coverage)
Part D covers outpatient prescription drugs through private plans approved by Medicare. You can get Part D as a standalone plan (paired with Original Medicare) or as part of a Medicare Advantage plan.
Plans can differ in their premiums, deductibles, covered drugs, pharmacies, and cost sharing. [Medicare explains how Part D works](https://www.medicare.gov/health-drug-plans/part-d); review each plan’s formulary and current costs before enrolling.
## Medigap (Medicare Supplement)
Medigap policies are sold by private insurers and help pay for costs that Original Medicare does not cover, such as copayments, coinsurance, and deductibles.
### Key facts about Medigap
- Medigap plans are **standardized by letter** (Plan A, Plan B, Plan C, Plan D, Plan F, Plan G, Plan K, Plan L, Plan M, Plan N). Each letter offers the same benefits regardless of which company sells it, though premiums vary.
- **Plan G** is the most popular option for new enrollees. Plan F was the most comprehensive but is no longer available to people who became eligible for Medicare after January 1, 2020.
- Medigap does **not** cover prescription drugs. You need a separate Part D plan.
- Medigap does **not** work with Medicare Advantage. It only supplements Original Medicare (Parts A and B).
- The best time to buy Medigap is during your **Medigap Open Enrollment Period**, which starts the month you turn 65 and are enrolled in Part B. During this six-month window, insurers cannot deny you coverage or charge more because of health conditions.
## Medicare vs Medicaid
Medicare and Medicaid are separate programs that people often confuse.
| | Medicare | Medicaid |
|---|---|---|
| **Run by** | Federal government (CMS) | State governments (with federal funding) |
| **Eligibility** | Primarily age-based (65+) or disability-based | Income-based and needs-based |
| **Funding** | Payroll taxes, premiums, and general federal revenue | Federal and state funding |
| **Coverage** | Standardized nationwide | Varies by state |
| **Premiums** | Part B and Part D premiums apply | Usually little to no cost |
Some people qualify for both programs. "Dual-eligible" individuals receive Medicare for primary coverage and Medicaid to help cover premiums, deductibles, and services Medicare does not cover.
## When to Enroll
Missing enrollment deadlines can mean gaps in coverage and permanent premium penalties.
### Initial Enrollment Period (IEP)
Your IEP is a seven-month window around your 65th birthday: the three months before your birthday month, your birthday month, and three months after. This is the most important enrollment window.
### General Enrollment Period (GEP)
If you miss an Initial Enrollment Period, a General Enrollment Period may be available. The available dates, coverage-start timing, and any penalty depend on the situation; use [Medicare’s sign-up guidance](https://www.medicare.gov/basics/get-started-with-medicare/sign-up) for current rules.
### Special Enrollment Periods (SEPs)
You may qualify for a SEP if you have a life event such as:
- Losing employer or union health coverage.
- Moving out of your plan's service area.
- Qualifying for Medicaid or Extra Help.
If you have coverage through an employer (or your spouse's employer) with 20 or more employees, you can delay Part B enrollment without penalty and sign up during a SEP when that coverage ends.
### Late enrollment penalties
Part A, Part B, and Part D penalties have different exceptions and durations. [Medicare’s penalty guide](https://www.medicare.gov/basics/costs/medicare-costs/avoid-penalties) explains the current rules, including employer coverage and creditable drug coverage. Confirm your own situation before delaying enrollment. If you are unsure about your enrollment timeline, the [health insurance enrollment guide](https://insurafaq.com/insurance/health-insurance-enrollment-guide/) covers broader enrollment strategies.
## How Much Medicare Costs
Here is a summary of key Medicare costs. All figures are approximate and adjusted annually.
| Cost area | Where to check current details |
|---|---|
| Part A and Part B costs | [See Medicare’s current cost table](https://www.medicare.gov/basics/costs/medicare-costs) |
| Part D costs | Vary by plan; [review current Part D details](https://www.medicare.gov/health-drug-plans/part-d) |
### IRMAA surcharges
If your modified adjusted gross income exceeds certain thresholds, you pay an Income-Related Monthly Adjustment Amount (IRMAA) on top of your standard Part B and Part D premiums. IRMAA thresholds are based on your tax return from two years prior. [Medicare publishes current IRMAA income thresholds and surcharges](https://www.medicare.gov/basics/costs/medicare-costs); the thresholds and amounts can change each year.
For a deeper look at [health insurance costs](https://insurafaq.com/insurance/health-insurance-cost/) across all coverage types, see the cost guide.
## Frequently asked questions
### Is Medicare free?
Part A is premium-free for most people who paid Medicare taxes for at least 10 years (40 quarters). However, Part B, Part D, and any supplemental coverage all have premiums. You will also pay deductibles, copays, and coinsurance when you use services. Medicare is not completely free for anyone.
### Do I have to sign up for Medicare at 65?
Not necessarily. If you have health coverage through your own or a spouse's current employer (with 20 or more employees), you can delay enrollment in Part B without penalty. Once that coverage ends, you get a Special Enrollment Period to sign up. However, if you do not have qualifying employer coverage, delaying past your Initial Enrollment Period results in permanent late enrollment penalties.
### Can I have Medicare and employer insurance at the same time?
Yes. If your employer has 20 or more employees, your employer plan typically pays first and Medicare pays second. If your employer has fewer than 20 employees, Medicare pays first. Talk to your benefits administrator to understand how your coverage coordinates.
### What is the donut hole?
The donut hole (coverage gap) is a phase in Part D prescription drug coverage. After your total drug spending (combined between you and your plan) reaches a set threshold, you enter the gap. During this phase, you historically paid a larger share of drug costs. Recent legislation has significantly reduced out-of-pocket costs in the donut hole, and once your spending reaches the catastrophic threshold, your costs drop to little or nothing for the rest of the year.
## Practical Next Steps
1. **Check your eligibility** at [Medicare.gov](https://www.medicare.gov/) to confirm when your coverage can start.
2. **Decide between Original Medicare and Medicare Advantage.** Original Medicare offers broad provider choice but no out-of-pocket cap. Medicare Advantage offers bundled benefits and cost caps but requires using network providers.
3. **Review drug formularies** if you take prescription medications. Make sure your drugs are covered under the Part D plan you are considering.
4. **Consider Medigap** if you choose Original Medicare. [Medicare explains when Medigap protections may apply](https://www.medicare.gov/health-drug-plans/medigap/ready-to-buy); availability and rules can vary by situation and state.
5. **Compare plans** using Medicare's Plan Finder at [Medicare.gov](https://www.medicare.gov/plan-compare/). For general tips on [comparing insurance quotes](https://insurafaq.com/insurance/how-to-compare-insurance-quotes/), see the comparison guide.
## Sources
- Medicare.gov, “Parts of Medicare”
- Medicare.gov, “Prepare to sign up”
- Medicare.gov, “Costs”
- Medicare.gov, “Avoid late enrollment penalties”
- Medicare.gov, “What’s Medicare drug coverage (Part D)?”
- Medicare.gov, “What’s Medicare Supplement Insurance (Medigap)?”