If you're turning 65, you're eligible to apply for Medicare—a program that provides health care coverage to more than 65 million Americans.1 Reaching Medicare eligibility is an important milestone for many older adults who need help with rising medical costs.

But understanding the different parts of Medicare, when to enroll, and which type of care is not covered by Medicare can seem complicated. That's why we've created this helpful guide. It's important to take the time to know your Medicare plan options, how much it's going to cost you (Medicare is not free), and when you are required to make a decision (not enrolling on time during your Initial Enrollment Period could lead to a penalty). 

If you’re wondering “What is Medicare and how does it work?”, keep reading to find out.

What is Medicare?

Medicare is a federal health insurance program that covers a wide range of services to keep you healthy as you age. The minimum age for Medicare is 65. Some younger people with disabilities, end-stage renal disease, and amyotrophic lateral sclerosis (ALS or Lou Gehrig's disease) may also qualify for Medicare.

Medicare has four parts, each offering different types of health coverage. It’s important to consider which coverage is right for you, and how much you may pay for that coverage. If you need help paying for the costs of Medicare, there are programs like LIS/Extra Help, the Medicare Savings Programs (MSPs)Medicaid, and State Pharmaceutical Assistance Programs (SPAPs) that you may qualify for.

What are the different parts of Medicare?

Part A: Hospital Insurance

Part A pays for care in the hospital as well as some of the costs of stays at skilled nursing facilities. If you’re wondering, “What home health care is covered by Medicare?”, you should know that Part A does cover a portion of health care at home; the rest is covered by Part B. 

Part A also covers hospice care for people who are terminally ill.  It is funded by the payroll tax (FICA) that is deposited into the Hospital Insurance Trust Fund.

Part B: Medical Insurance

Part B pays for doctor visits, outpatient hospital care, and home health care that Part A does not pay for. It also covers:

  • Diagnostic and laboratory tests, such as X-rays and blood work
  • Medical equipment, such as wheelchairs and hospital beds
  • Orthotics (devices that support joints) and prosthetics (artificial body parts)
  • Mental health care
  • Ambulance services 
  • Preventive benefits and screenings

Part B is financed by Part B premiums (paid monthly by Medicare beneficiaries) and general revenues from the federal government. 

Together, Medicare Parts A and B are often called “original Medicare.”

Part C: Medicare Advantage plans

You can get Medicare coverage either through original Medicare or through a plan sponsored by a private company, called a Medicare Advantage plan.

If you're enrolled in a Medicare Advantage plan, you'll still have Medicare Parts A and B, but you'll get your health care services through a private plan (that you'll choose). Typically, you will pay the usual Part B premium, plus any additional premium the plan may charge. 

It’s important that anyone considering a Medicare Advantage plan weigh the pros and cons to make an informed decision based on the four C’s: coverage, cost, convenience, and choice.

Are Medicare advantage plans worth it? The first step to answering this question is understanding the different plans available. There are various types of Medicare Advantage plans:

These plans must cover all the same things as Medicare Parts A and B. Most Medicare Advantage plans require people to use providers (like doctors, hospitals, and pharmacies) that are part of their network. Using providers outside a plan’s network will cost you more money.

Medicare Advantage plans may also cover services original Medicare does not pay for, like vision, dental, and hearing care. These plans usually cover prescription drugs as well. Here are some questions you should ask when considering a Medicare Advantage plan.

Part D: Prescription drug coverage

Does Medicare pay for prescriptions? The answer is yes—Part D helps pay for prescription drugs. Part D is offered by private drug plans that are approved by Medicare. Part D is funded by premiums you pay, general revenues from the federal government, and state payments.

Medicare supplemental insurance (Medigap)

Some people may get additional coverage from a current or former employer or union. This employer-sponsored coverage can help to pay for services and costs Medicare does not cover.

Other people may purchase Medicare supplement insurance, known as a Medigap policy. A Medigap insurance policy helps "fill the gaps" in your original Medicare coverage and is sold by private insurance companies.

There are 10 different standardized Medigap plans that can be sold. What is the average cost of supplemental insurance for Medicare? The cost of a Medigap policy depends on the type of Medigap plan and the company you bought it from. There are questions you should ask yourself before speaking to insurance representatives about Medigap policies.

When can I enroll in Medicare? 

For some people, such as those already receiving Social Security benefits, enrollment in Medicare is automatic. Other people must sign up during designated Medicare enrollment periods.

There are several different time periods when you can enroll in Medicare and switch or join Medicare Advantage and/or Part D plans. For example, the Open Enrollment Period for Medicare takes place from Oct. 15 through Dec. 7 every year. During Open Enrollment, you can elect coverage or reevaluate your Medicare Advantage and/or Part D coverage to make sure you’re enrolled in the plan that fits your needs best. 

Medicare plans change every year, so you should reassess your plan annually. Your choice of coverages could determine your health for years to come and save (or cost) you hundreds of dollars (learn more about Medicare out-of-pocket costs).

"It's important to take an active role in selecting your Medicare coverage during Open Enrollment," said Jen Teague, NCOA Associate Director of Health Coverage and Benefits. "The last thing you want to do is overpay for a plan that has coverage you don't need—or worse, buy a plan without enough coverage and end up with high medical bills."

How do I apply to Medicare? 

If you must apply for Medicare, you can enroll by phone, online, or in person at your local Social Security office. Learn how to get started.

How do I get help choosing a Medicare plan?

If you need help sorting through your options, NCOA has trusted partners committed to serving your Medicare selection needs and priorities at no cost to you. They’ll help you explore all your coverage choices to find the solution that fits you best, and they won't try to pressure you to purchase a specific plan.

Since NCOA is committed to delivering a consumer-friendly Medicare advisory experience, we only work with licensed brokers that meet our rigorous Standards of Excellence. These professionals are specially trained on the ins and outs of the Medicare program. Even more important, they are held to the highest expectations for ethical conduct and legal compliance.

When you speak to our broker partners, you can trust you’re getting accurate, straightforward information focused solely on your needs. Read more about our Medicare Standards of Excellence and meet our partners.

You can also get help from a State Health Insurance Assistance Program (SHIP). These state organizations offer free and unbiased insurance counseling and assistance to Medicare-eligible people, their families, and caregivers. Find your local SHIP now.


1. Center for Medicare Advocacy. Medicare Enrollment Numbers. June 29, 2023. Found on the internet at https://medicareadvocacy.org/medicare-enrollment-numbers