Understanding Medicare

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  • What Is It?
  • How Does It Work?
  • When Do I Enroll?

What Is Medicare?

Medicare is a government health insurance program that covers healthcare services in the United States for people who are 65 and older (as well as some younger people who qualify through Social Security). As Medicare benefits don’t pay for everything, it’s important to understand your options and decide which coverage best fits your individual health needs.

How Does
Medicare Work?

Medicare is made up of four different parts
—A, B, C and D.

Part A: Hospital Insurance

Medicare Part A covers:

  • Inpatient hospital care
  • Skilled nursing facility care
  • Home healthcare
  • Hospice care

Most Americans are enrolled automatically in Medicare Part A, although it alone may not cover all of your healthcare costs. Parts B, C and D are voluntary programs that provide additional coverage.

Part B: Medical Insurance*

Medicare Part B covers:

  • Outpatient medical services
  • Coverage for physician services and routine doctor visits
  • Preventive care and services (like flu shots and mammograms)
  • Lab work, X-rays and medical supplies

Learn how to sign up east

Part C: Medicare Advantage Plans

Medicare Advantage Plans cover:

  • These plans are an “all-in-one” alternative to Original Medicare.
  • These “bundled plans” include everything covered in Original Medicare (Part A and Part B) and usually Part D (Medicare drug coverage).
  • Additional benefits or services like hearing, vision and dental services (depending on the private health plan you choose).

You can’t use and can’t be sold a Medigap policy if you’re in a Medicare Advantage plan.

Part D: Prescription Drug Coverage*

  • Original Medicare does not cover most prescription drugs – so Part D covers the cost of prescription drugs.
  • Medicare drug coverage is optional and is offered to everyone with Medicare.
  • To get Medicare drug coverage, you must join a Medicare-approved plan that offers drug coverage.
  • In most cases, this means you can add drug coverage to Original Medicare OR select a Medicare Advantage Plan that offers drug coverage.

*If you don’t enroll in Part B or Part D when you are first eligible for Medicare, you may have to pay a penalty later.

Medicare Supplement

Medigap is Medicare Supplement Insurance that helps fill “gaps” in Original Medicare and is sold by private companies. Original Medicare pays for much, but not all, of the cost for covered healthcare services and supplies. A Medicare Supplement Insurance (Medigap) policy can help pay some of the remaining healthcare costs, like:

  • Copayments
  • Coinsurance
  • Deductibles

There are several Medigap (Medicare Supplement Insurance) plans, each with different benefits and premiums, so you can choose the plan that works best for your specific need. Keep in mind that Medigap plans do not offer prescription drug coverage.

Putting the Parts Together


Original Medicare

Part A
Part B

You can add:

Part D

You can also add:


Supplemental coverage includes Medicare Supplement Insurance (Medigap). Or you can use coverage from a former employer or union, or Medicaid.

Medicare Advantage

(Also known as Part C)

Part A
Part B

Most plans include:

Part D
Extra Benefits

Some plans also include:

Lower out-of-
pocket costs

When Do I Enroll in Medicare?

Medicare Advantage
Open Enrollment Period (OEP)

Enrollment dates:
January 1 – March 31

During OEP, you can:

  • Switch MA Plans
    (with or without Part D)
  • Switch to Original Medicare
    (with or without Part D)

During this period, you can’t:

  • Switch from Original Medicare to a Medicare Advantage Plan.
  • Join a Medicare drug plan if you’re in Original Medicare.

Initial Coverage Enrollment Period (ICEP)

Enrollment dates:

All year: 7-month window

  • Begins 3 months before the month you turn 65
  • Includes the month of your 65th birthday
  • Ends 3 months after the month you turn 65

During ICEP, you can:

Sign up for a Medicare Advantage Plan and/or a Medicare Prescription Drug Plan.

Special Enrollment
Period (SEP)

Enrollment dates:

Varies based on eligibility circumstances

You can make changes to your Medicare Advantage and Medicare prescription drug coverage when certain events happen in your life, like if you move or you lose other insurance coverage. These chances to make changes are called Special Enrollment Periods (SEPs).

During SEP, you can:

  • Switch plans
  • Leave a plan
  • Enroll in Part D

Some qualifying life events include:

  • Having a change in Extra Help levels.
  • Having both Medicare and Medicaid.
  • Receiving a diagnosis of a certain severe or disabling condition.
  • And many more!

Rules about when you can make changes and the type of changes you can make are different for each SEP.