Individual Coverage & Medicare

Medicare is a federally regulated and federally run program that’s designed to offer affordable healthcare coverage to seniors and younger people who have certain disabilities. Most people become eligible for Medicare when they turn 65.

A portion of Medicare is funded by Social Security and Medicare taxes paid by individuals. If you worked in the United States for multiple years and paid taxes on your income, you may be eligible to receive Medicare Part A without paying a monthly premium. Other parts of Medicare typically include monthly premiums.

Medicare is mandatory for people over the age of 65, except for in certain circumstances — and if you don’t enroll in Medicare when you’re first eligible, you may be subject to late enrollment penalties. These penalties can increase the cost of your monthly premiums and may be permanent! Plus, failing to enroll in Medicare right away could leave you with gaps in your healthcare coverage or without any health insurance at all. That’s why it’s important to start preparing for Medicare before your 65th birthday, so you can have the coverage you need when you need it.

Medicare Part A is hospital insurance. It includes coverage for inpatient hospital stays, skilled nursing care and some in-home or hospice care.

Medicare Part A is one half of what’s considered “Original Medicare” — the other half being Medicare Part B. Both Parts A and B are available after you turn 65 and are required for you to purchase Medigap insurance or enroll in a Medicare Advantage plan.

Most people qualify for premium-free Part A because they’ve paid into Medicare throughout their working years. However, you are responsible for a Part A deductible, coinsurance and copayments for hospital services.

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Medicare Part B is medical insurance. It covers outpatient healthcare services like doctor visits, outpatient medical procedures, surgeries, diagnostic lab tests and some durable medical equipment.

Medicare Part B requires you to pay a monthly premium. This premium is set at a standard rate each year by the federal government for most enrollees. On top of this premium, you will be responsible for a standardized Part B deductible as well as copayments or coinsurance for services. There is no limit on how much you pay out of pocket for covered services each year with Medicare Part B.

Medicare Part C, also called Medicare Advantage, is not a form of coverage like Part A and Part B. Instead, Medicare Advantage plans are used in place of Original Medicare — they combine Part A and Part B benefits into one plan.

Medicare Advantage plans are offered by private insurance companies and are regulated by the federal government. They include all Medicare Part A and Part B benefits, plus additional benefits that go beyond Original Medicare. Depending on the plan, these benefits may include things like hearing aids, dental care, vision care and other wellness services. Many Medicare Advantage plans also include prescription drug coverage, which helps make them convenient.

There are a wide range of Medicare Advantage plans available to people eligible for Medicare. They come with a wide range of benefits and have different monthly premiums, deductibles, copayments and coinsurances.

If you enroll in a Medicare Advantage plan, you will pay your Part C premium on top of your Part B premium (and Part A premium, if applicable). However, Medicare Advantage plans are subject to maximum out-of-pocket (MOOP) limits, meaning there is a cap on how much you will spend on healthcare services in a given year.

Medicare Part D is prescription drug coverage. Part D plans are offered by private insurers and can be purchased in addition to Original Medicare or Medigap plans. Part D coverage can also be included in Medicare Advantage plans.

There are many different plans available under Medicare Part D. Each plan has a different formulary that includes different prescription drugs at varying costs. Part D plans also require a monthly premium that is paid to the insurance company.

Medigap is not a part of Medicare like the other four parts are. Instead, it’s supplemental insurance that helps fill the cost-sharing gaps left by Medicare Parts A and B.

Medigap policies are sold by private insurance companies and require a monthly premium. Depending on the plan you choose, your Medigap policy will help cover costs associated with Original Medicare, such as copayments, coinsurances and deductibles. To purchase a Medigap policy, you must be enrolled in Original Medicare. You cannot have a Medigap policy with a Medicare Advantage plan.