If you or a loved one recently signed up for Medicare or are planning to sign up soon, you might have some questions. Those questions might include: What does Medicare cover? Which Medicare plan will cover my prescription drugs? How much will my monthly Medicare costs be?

In this article, we’ll explore topics like coverage, cost, and more to help answer some of those commonly asked Medicare questions.

Medicare consists of Part A, Part B, Part C (Advantage), Part D, and Medigap — all of which offer coverage for your basic medical needs.

Original Medicare

Medicare Part A and Part B are collectively known as original Medicare. As you’ll learn, original Medicare covers only your hospital needs and ones that are medically necessary or preventive. It doesn’t cover prescription drugs, yearly dental or vision screenings, or other costs associated with your medical care.

Medicare Part A

Part A covers the following hospital services:

  • inpatient hospital care
  • inpatient rehabilitation care
  • skilled nursing facility care
  • nursing home care (not long term)
  • home health care
  • hospice care

Medicare Part B

Part B covers medical services including:

  • preventive medical care
  • diagnostic medical care
  • treatment of medical conditions
  • durable medical equipment
  • mental health services
  • certain outpatient prescription drugs
  • telehealth services (as part of the current response to the COVID-19 outbreak)

Medicare Part C (Medicare Advantage)

Medicare Advantage is a Medicare option offered by private insurance companies. These plans cover original Medicare Part A and B services. Many also offer coverage for prescription drugs; dental, vision, and hearing services; fitness services; and more.

Medicare Part D

Medicare Part D helps cover the costs of prescription drugs. Medicare Part D plans are sold by private insurance companies and can be added on to original Medicare.

Medicare supplement (Medigap)

Medigap plans help cover the costs associated with original Medicare. These may include deductibles, coinsurance, and copayments. Some Medigap plans also help pay medical costs you might incur when traveling outside the country.

Original Medicare covers some medications. For example:

  • Medicare Part A covers medications used for your treatment when you are in the hospital. It also covers some medications used during home health or hospice care.
  • Medicare Part B covers certain medications administered at outpatient settings, such as a doctor’s office. Part B also covers vaccines.

To get full prescription drug coverage with Medicare, you must enroll in either Medicare Part D or a Medicare Part C plan that has drug coverage.

Part D

Medicare Part D can be added on to original Medicare to help cover the cost of your prescription drugs. Each Part D plan has a formulary, which is a list of the prescription drugs it will cover. These prescription drugs fall into specific tiers, often categorized by price and brand. All Medicare Part D plans must cover at least two drugs in the major drug categories.

Part C

Most Medicare Advantage plans also offer prescription drug coverage. Like Medicare Part D, each Advantage plan will have its own formulary and coverage rules. Just keep in mind that some Medicare Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) plans may charge more for your prescriptions if you use out-of-network pharmacies.

Americans age 65 and over are automatically eligible to enroll in Medicare. Some individuals under age 65 who have long-term disabilities are also eligible. Here’s how Medicare eligibility works:

  • If you are turning 65 years old, you are eligible to enroll in Medicare 3 months before your 65th birthday and up to 3 months afterward.
  • If you receive monthly disability benefits through either the Social Security Administration or Railroad Retirement Board, you are eligible for Medicare after 24 months.
  • If you have amyotrophic lateral sclerosis (ALS) and receive monthly disability benefits, you are eligible for Medicare immediately.
  • If you have been diagnosed with end stage renal disease and have had a kidney transplant or require dialysis, you are eligible to enroll in Medicare.

There are multiple enrollment periods for Medicare. Once you meet the eligibility requirements, you may enroll during the following periods.

Medicare enrollment periods

PeriodDatesRequirements
Initial enrollment3 months before and 3 months after your 65th birthdayturning age 65
Medigap initial enrollmenton your 65th birthday and for 6 months afterwardage 65
General enrollmentJan. 1–Mar. 31age 65 or over and haven’t yet enrolled in Medicare
Part D enrollmentApr. 1–Jun. 30age 65 or over and haven’t yet enrolled in a Medicare prescription drug plan
Open enrollmentOct. 15–Dec. 7already enrolled in Part C or Part D
Special enrollmentup to 8 months after a life changeexperienced a change, such as moving to new coverage area, your Medicare plan was dropped, or you lost your private insurance

In some cases, Medicare enrollment is automatic. For example, you will be automatically enrolled into original Medicare if you are receiving disability payments and:

  • You are turning 65 years old in the next 4 months.
  • You have received disability payments for 24 months.
  • You have been diagnosed with ALS.

Some Medicare Advantage plans are advertised as “free” plans. While these plans may be premium-free, they are not completely free: You will still have to pay certain out-of-pocket costs.

Each Medicare part that you enroll in has costs associated with it, including premiums, deductibles, copayments, and coinsurance.

Part A

Costs for Medicare Part A include:

  • a premium of anywhere from $0 to $458 per month, depending on your income
  • a deductible of $1,408 per benefits period
  • a coinsurance of $0 for the first 60 days of an inpatient stay, up to the full cost of services depending how long you’re admitted

Part B

Costs for Medicare Part B include:

  • a premium of $144.60 or higher per month, depending on your income
  • a deductible of $198 in 2020
  • a coinsurance of 20 percent of the cost of your Medicare-approved amount for services
  • an excess charge of up to 15 percent if the cost of your services is more than the approved amount

Part C

Medicare Part C costs can vary depending on your location, your provider, and the type of coverage your plan offers.

Costs for Medicare Part C include:

  • Part A costs
  • Part B costs
  • a monthly premium for the Advantage plan
  • a yearly deductible for the Advantage plan
  • a drug plan deductible (if your plan includes prescription drug coverage)
  • a coinsurance or copayment amount for each doctor’s visit, specialist’s visit, or prescription drug refill

Part D

Costs for Medicare Part D include:

  • a monthly premium
  • a yearly deductible of $435 or lower
  • a coinsurance or copayment amount for your prescription drug refills

Medigap

Medigap plans charge a separate monthly premium that’s influenced by your Medigap plan, your location, the number of people enrolled in the plan, and more. But Medigap plans also help cover some of the costs of original Medicare.

A Medicare deductible is the amount of money that you spend out of pocket each year (or period) for your services before Medicare coverage kicks in. Medicare parts A, B, C, and D all have deductibles.

A Medicare premium is the monthly amount you pay to be enrolled in a Medicare plan. Part A, Part B, Part C, Part D, and Medigap all charge monthly premiums.

A Medicare copayment, or copay, is the amount you must pay out of pocket every time you receive services or refill a prescription drug.

Medicare Advantage (Part C) plans charge different amounts for doctor’s and specialist’s visits. Some plans charge higher copayments for out-of-network providers.

Medicare drug plans charge different copayments for drugs based on the plan formulary.

Medicare coinsurance is the percentage that you pay out of pocket for the cost of your Medicare-approved services.

Medicare Part A charges a higher coinsurance the longer you remain hospitalized. Medicare Part B charges a set coinsurance amount of 20 percent.

Medicare Part D plans charge coinsurance amounts the same way as copayments — and will only ever charge one of the two for your prescription drugs, not both.

A Medicare out-of-pocket maximum is the limit on how much you will pay out of pocket for all your Medicare costs in a single year. There’s no limit on out-of-pocket costs in original Medicare.

All Medicare Advantage plans have a yearly out-of-pocket maximum amount, which varies depending on the plan you are enrolled in. Enrolling in a Medigap plan can also help lower yearly out-of-pocket costs.

Original Medicare offers nationwide coverage to all beneficiaries. This means you’re covered for out-of-state medical care.

Medicare Advantage plans, on the other hand, offer coverage only for the state you live in, though some may also offer in-network services out out-of-state.

Whether you have original Medicare or Medicare Advantage, you should always make sure that the provider you’re visiting accepts Medicare assignment.

If you are enrolled in a Medicare plan and want to change your plan, you can do so during the open enrollment period, which runs from October 15 to December 7 each year.

If you have lost your Medicare card, you can order a replacement from the Social Security website. Simply log in to your account and request a replacement under the “Replacement Documents” tab. You can also request a replacement card by calling 800-MEDICARE.

It can take around 30 days to receive your replacement Medicare card. If you need your card for an appointment before then, you can print a copy of it by logging into your myMedicare account.

Understanding Medicare may feel a bit overwhelming, but there are many resources at your disposal. If you need additional help signing up for Medicare or still have unanswered questions, here are some additional resources that can help:

  • Medicare.gov has information about local providers, important forms, helpful downloadable booklets, and more.
  • CMS.gov has up-to-date information about official legislative changes and updates to the Medicare program.
  • SSA.gov allows you to access your Medicare account and more Social Security and Medicare resources.