What Is Medicare?
Medicare is the federal health insurance program that has been serving Americans for over half a century. Here's what you need to know.
Medicare at a Glance
Medicare is a federal health insurance program administered by the Centers for Medicare & Medicaid Services (CMS). It was established in 1965 and provides health coverage to more than 65 million Americans. Medicare is primarily available to people aged 65 and older, but it also covers certain younger individuals with qualifying disabilities and people with End-Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS).
Medicare is funded through a combination of payroll taxes, premiums paid by beneficiaries, and general federal revenue. If you or your spouse worked and paid Medicare taxes for at least 10 years (40 quarters), you typically qualify for premium-free Medicare Part A when you turn 65.
While Medicare provides essential health coverage, it does not cover everything. Understanding what Medicare covers — and what it doesn't — is crucial to avoiding unexpected medical expenses and choosing the right supplemental coverage.
The Four Parts of Medicare
Hospital Insurance
Covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care. Most people pay no monthly premium for Part A if they or their spouse paid Medicare taxes while working.
Medical Insurance
Covers doctor visits, outpatient care, preventive services, durable medical equipment, and some home health care. Part B requires a monthly premium, which is based on your income.
Medicare Advantage
An alternative to Original Medicare offered by private insurance companies. Medicare Advantage plans bundle Part A, Part B, and usually Part D into a single plan, often with extra benefits like dental, vision, and hearing.
Prescription Drug Coverage
Covers the cost of prescription medications. Part D plans are offered by private insurance companies and are available as standalone plans or included within most Medicare Advantage plans.
What Does Medicare Cover?
Original Medicare (Parts A and B combined) covers a broad range of medically necessary services, including:
- Inpatient hospital stays and surgeries
- Doctor and specialist office visits
- Lab tests, X-rays, and diagnostic imaging
- Outpatient procedures and ambulatory surgery
- Preventive screenings and annual wellness visits
- Durable medical equipment (wheelchairs, walkers, etc.)
- Skilled nursing facility care (limited)
- Home health care services
- Hospice care
- Mental health services (inpatient and outpatient)
What Medicare Does Not Cover
Original Medicare has gaps. The following are generally not covered by Parts A and B alone:
- Most dental care (cleanings, fillings, dentures)
- Routine eye exams and eyeglasses
- Hearing aids and hearing exams for fitting hearing aids
- Long-term (custodial) care in a nursing home
- Cosmetic surgery
- Most prescription drugs (covered under Part D)
- Care received outside the United States (with limited exceptions)
This is why many Medicare beneficiaries add supplemental coverage — either a Medicare Supplement (Medigap) plan, a Medicare Advantage plan, or a standalone Part D prescription drug plan to fill these gaps.
Who Is Eligible for Medicare?
You are generally eligible for Medicare if you meet one of the following criteria:
- Age 65 or older — U.S. citizens and legal permanent residents who have lived in the U.S. for at least five continuous years.
- Under 65 with a qualifying disability — If you have been receiving Social Security Disability Insurance (SSDI) benefits for 24 months.
- End-Stage Renal Disease (ESRD) — Permanent kidney failure requiring dialysis or a kidney transplant, regardless of age.
- ALS (Lou Gehrig's Disease) — Medicare coverage begins the month your SSDI benefits start, with no 24-month waiting period.
Have Questions About Medicare?
Our licensed agents will explain your options in plain language and help you choose the right coverage — all at no cost to you.