What’s Medicare?
Medicare is the federal health insurance program for:
- People who are 65 or older
- Certain younger people with disabilities
- People with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD)
The different parts of Medicare help cover specific services:
Medicare Part A (Hospital Insurance)
Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.
For a hospital stay, after you pay a deductible of $1,676 per admission for 2025, it covers the cost of your semi-private room. This covers you for days 1 thru 60. Copays apply after that.
The cost of Part A for most people at age 65 is $0. This is because during your working years you have paid taxes to pre-fund the premiums for your hospital benefits. If you don’t automatically qualify for premium-free coverage, most individuals can still apply for it. For 2025 the cost is $518 per month.
Medicare Part B (Medical Insurance)
Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services. Part B has an annual deductible of $257 for 2025. After that you will pay a 20% coinsurance for all Medicare approved services. Medicare Part B has No Out of Pocket Maximum.
Part B has a monthly premium. The cost of Part B is set by Social Security and it changes from year to year. For 2025 the standard cost is $185.00 per month. You may pay a higher or lower premium based on your adjusted gross income reported to the IRS in recent years.
Medicare Part C (Medicare Advantage Plans)
Medicare Advantage, also known as Part C, is an “all in one” alternative to Original Medicare. These “bundled” plans include Part A, Part B, and usually Part D (see below). Medicare Advantage plans are offered by private insurance companies. You will pay co-pays or co-insurance for various medical services. Some co-pays could be as little as $0.
If you’re in a Medicare Advantage Plan or other Medicare plan, you may have different rules. But your plan must give you at least the same coverage as Original Medicare. Medicare Advantage Plans can include extra benefits such as; routine vision exam and hardware, routine hearing exams and hearing aids, fitness programs, and OTC benefits.
To enroll in a Part C plan, you must first be enrolled in both Parts A and B of Medicare. Even if you find a Part C plan with a very low premium or no premium, you will still pay the Part B monthly premium. You must also live in the plan service area. Once you enroll, your Medicare coverage will be from the Medicare Advantage plan itself, not from the government.
Part C is voluntary. Many people prefer to get their Medicare coverage from Original Medicare and a traditional Medicare Supplement Plan or Medigap. These people do not want a Part C Medicare Advantage plan, so they simply don’t enroll in one.
Medicare Part D (Prescription Drug Coverage)
Part D adds prescription drug coverage to Original Medicare. Medicare Part D is a federal program administered through private insurance companies. Medicare Advantage Plans may also offer prescription drug coverage that follows the same rules as Medicare Prescription Drug Plans.
It covers retail prescription drugs that you pick up yourself at the pharmacy or order via mail order. You choose a carrier and enroll in their drug plan, and that’s how you sign up for Part D drug plan. Most states have about 30 drug plans to choose from, and the best way to determine which one is the right fit for you is to have your agent run a Part D analysis using Medicare’s prescription drug finder tool.