Medicare: What Is It and How Does It Work?
Medicare is a federal health insurance program mainly for people age 65 or older, and for some younger people with disabilities or End-Stage Renal Disease. It works by covering approved health care services through Original Medicare, which includes Part A and Part B, or through a Medicare Advantage Plan. You may also choose prescription drug coverage and, in some cases, supplemental coverage to help with out-of-pocket costs.
What is Medicare?
Medicare is a federal health insurance program. It is most often associated with people age 65 or older, but some people under 65 may qualify if they receive disability benefits or have permanent kidney failure, also called End-Stage Renal Disease.
Medicare is individual coverage. It does not work like a family health insurance policy, so each eligible person generally has their own Medicare coverage, choices, premiums, and costs.
What are the main parts of Medicare?
Medicare is divided into parts that cover different types of care:
- Part A: Hospital Insurance. It helps cover inpatient hospital care, skilled nursing facility care, hospice care, and some home health care.
- Part B: Medical Insurance. It helps cover medically necessary services and preventive services, such as doctor services, tests, outpatient care, and certain supplies.
- Part C: Medicare Advantage. This is an alternative way to get Medicare benefits through a Medicare-approved private plan. These plans include Part A and Part B, and usually include Part D.
- Part D: Prescription drug coverage. It helps cover the cost of prescription drugs and many recommended vaccines.
How does Original Medicare work?
Original Medicare includes Part A and Part B. With Original Medicare, Medicare pays part of the cost for approved services, and you pay your share through deductibles, coinsurance, or copayments.
With Original Medicare, you can generally use any doctor or hospital that takes Medicare anywhere in the United States. However, Original Medicare does not cover every service or all costs. For example, it generally does not include routine dental, most vision, most hearing, or long-term custodial care.
If you choose Original Medicare, you can usually add a separate Part D prescription drug plan. You may also be able to buy Medicare Supplement Insurance, called Medigap, to help pay some out-of-pocket costs in Original Medicare.
How does Medicare Advantage work?
Medicare Advantage, also called Part C, is another way to get Medicare coverage. These plans are offered by private companies approved by Medicare and must follow Medicare rules.
To join a Medicare Advantage Plan, you must have both Part A and Part B. Most Medicare Advantage Plans include drug coverage. Plans may also offer extra benefits that Original Medicare does not cover, but they can have networks, service areas, prior authorization rules, and different out-of-pocket costs.
You generally cannot use Medigap to pay Medicare Advantage copayments, deductibles, or premiums. Medigap is designed to work with Original Medicare, not Medicare Advantage.
What does Medicare cost?
Medicare costs depend on the coverage you have, the services you use, and whether you have other coverage. Common Medicare costs include premiums, deductibles, coinsurance, and copayments.
For 2026, most people pay the standard Part B monthly premium of $202.90. The 2026 Part B deductible is $283. Some people pay more for Part B and Part D based on income. If you buy Part A because you do not qualify for premium-free Part A, the 2026 monthly premium may be $311 or $565, depending on how long you or your spouse worked and paid Medicare taxes.
Costs can differ if you have Medicare Advantage, Part D, Medigap, Medicaid, employer coverage, retiree coverage, or help from a Medicare Savings Program.
How do you sign up and choose coverage?
You sign up for Medicare Part A and Part B through Social Security. Some people are enrolled automatically, while others need to apply. If you are 65 or older, you can enroll online for Part A and Part B, or Part A only, through Social Security.
After you have Medicare, you choose how to receive your coverage. The two main paths are:
- Original Medicare: Part A and Part B, with optional Part D and possible Medigap or other supplemental coverage.
- Medicare Advantage: A Medicare-approved private plan that replaces the way you receive Part A and Part B benefits, and usually includes Part D.
If you have employer or union coverage, retiree coverage, Medicaid, Veterans benefits, or other insurance, Medicare coordination rules can depend on your situation. It is important to check how your current coverage works before delaying or changing Medicare coverage.
From First Meeting to Medicare Enrollment
We begin by helping you understand how Medicare works and how the different pieces fit together. We walk through Original Medicare, Parts A and B, Medicare Advantage, Medicare Supplement insurance, and Part D prescription drug coverage, including how formularies, drug tiers, and plan rules can affect your costs.
We also explain dental, vision, and hearing coverage, along with other products that may help fill gaps in your healthcare plan. Depending on your needs, that may include short-term in-home healthcare coverage, hospital indemnity insurance, or coverage designed to provide additional financial support following a cancer diagnosis, heart attack, or stroke.
Once you understand the landscape, we move into the planning stage. That is when we review your doctors, hospitals, prescription drugs, current coverage, and other personal details so we can begin evaluating the Medicare plan options that fit your situation.
Official Sources
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How does Medicare work? | Medicare
Verifies how Original Medicare works, the role of Part A and Part B, cost sharing, and the choice between Original Medicare and Medicare Advantage. -
Parts of Medicare | Medicare
Verifies the definitions of Medicare Parts A, B, C, and D and how drug coverage may be added. -
Your coverage options | Medicare
Verifies the two main ways to get Medicare coverage, Original Medicare and Medicare Advantage, and explains Part D and Medigap options. -
Sign up for Medicare | SSA
Verifies that Medicare enrollment for Part A and Part B is handled through Social Security and summarizes basic eligibility for people 65 or older and some people under 65. -
Fact sheet 2026 Medicare costs Medicare Part A (Hospital Insurance) costs
Verifies 2026 Medicare cost figures, including the standard Part B premium, Part B deductible, and Part A premium amounts for people who buy Part A.
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