Complete Medicare Basics Guide

What is Medicare?

Medicare is a federal health insurance program primarily for people age 65 and older, though some younger people with disabilities or End-Stage Renal Disease also qualify. Medicare helps cover many healthcare costs, but it doesn't cover everything.

Medicare has four parts, each covering different services:

• Part A: Hospital Insurance
• Part B: Medical Insurance
• Part C: Medicare Advantage (alternative to Parts A & B)
• Part D: Prescription Drug Coverage

Medicare Part A: Hospital Insurance

Part A covers inpatient care in hospitals, skilled nursing facility care, hospice care, and some home health care.

What Part A Covers:

• Inpatient hospital stays
• Skilled nursing facility care (limited)
• Hospice care
• Some home health care services

Part A Costs (2025):

Medicare Part B: Medical Insurance

Part B covers medically necessary services like doctor visits, outpatient care, medical supplies, and preventive services.

What Part B Covers:

• Doctor visits and outpatient care
• Preventive services (mammograms, colonoscopies, vaccines)
• Medical equipment (wheelchairs, oxygen)
• Mental health services
• Ambulance services
• Some home health care

Part B Costs (2025):

Medicare Part C: Medicare Advantage

Medicare Advantage plans are an alternative way to get Medicare benefits. These plans are offered by private companies approved by Medicare and include everything from Parts A and B, plus often Part D.

Medicare Advantage Benefits:

• All Part A and Part B benefits
• Often includes prescription drug coverage (Part D)
• May include extras like dental, vision, hearing aids
• Out-of-pocket maximums for protection
• Often lower monthly premiums

Medicare Advantage Considerations:

• Network restrictions (must use plan doctors/hospitals)
• Prior authorization requirements
• Plans can change yearly
• May not work well for frequent travelers

Medicare Part D: Prescription Drug Coverage

Part D helps cover the cost of prescription drugs. It's offered through private companies approved by Medicare.

Part D Coverage Phases:

• Deductible Phase: You pay full cost until reaching deductible
• Initial Coverage: You pay 25% of drug costs
• Coverage Gap ("Donut Hole"): You pay 25% until reaching $8,000 out-of-pocket
• Catastrophic Coverage: You pay 5% or small copays

Part D Costs (2025):

Enrollment Periods & Deadlines

Initial Enrollment Period (IEP)

Your first chance to enroll in Medicare. This 7-month period includes:

• 3 months before your 65th birthday
• Your 65th birthday month
• 3 months after your 65th birthday

General Enrollment Period

January 1 - March 31: If you missed your Initial Enrollment Period, you can enroll during this time, but you may face penalties and delayed coverage (starts July 1).

Annual Open Enrollment

October 15 - December 7: Change Medicare Advantage plans, switch from Original Medicare to Medicare Advantage (or vice versa), and add/change Part D plans.

Medicare Advantage Open Enrollment

January 1 - March 31: If you're in a Medicare Advantage plan, you can switch to Original Medicare and add a Part D plan.

Medicare Costs for 2025

Understanding Medicare costs helps you budget and choose the right coverage. Here's a summary of key costs:

Additional Costs to Consider:

• Medicare Supplement Insurance: $125-$300+ per month
• High-income surcharges (IRMAA): Additional premiums for Parts B and D if income exceeds thresholds
• Out-of-pocket costs: Copays, coinsurance, and services not covered by Medicare

How to Choose the Right Medicare Plan

Step 1: Decide on Original Medicare vs Medicare Advantage

Choose Original Medicare if you:

• Want to see any doctor that accepts Medicare
• Travel frequently
• Have complex medical needs
• Want to add a Medicare Supplement plan

Choose Medicare Advantage if you:

• Want lower monthly premiums
• Like having extras like dental and vision
• Don't mind network restrictions
• Want an out-of-pocket maximum

Step 2: Consider Your Prescription Drugs

Make a list of all your medications and check if they're covered by the plans you're considering. Pay attention to:

• Which tier your drugs are on
• Whether prior authorization is required
• Total estimated annual drug costs

Step 3: Check Your Doctors and Hospitals

Ensure your preferred healthcare providers are in the plan's network and accepting new patients.

Step 4: Compare Total Costs

Don't just look at monthly premiums. Consider:

• Deductibles and out-of-pocket maximums
• Copays and coinsurance
• Prescription drug costs
• Services not covered

Next Steps

Now that you understand Medicare basics, here's what to do next:

3+ Months Before Age 65:

• Research Medicare Supplement and Part D plans
• Understand how current employer coverage affects timing

During Your Initial Enrollment Period:

• Enroll in Parts A and B (if eligible)
• Choose Part D or Medicare Advantage plan
• Consider Medicare Supplement insurance

Ongoing:

• Review your coverage annually during Open Enrollment
• Keep track of any life changes that might affect your coverage
• Stay informed about Medicare updates and changes