What Is Medicare and How Does It Work?

If you're turning 65, you've probably got Medicare on your mind. It's federal health insurance that kicks in at 65, though you can get it earlier if you have a disability or kidney failure. 

Part A handles hospital stays and nursing home care. Most people don't pay a dime for it since you already paid into Medicare through taxes during your working years. Part B covers doctor visits and preventive services, such as screenings. This one costs $185 a month in 2025, though you'll pay more if you make more money. 

Already getting Social Security? You'll get both parts automatically when you turn 65. From there, you can add Part D for prescription coverage. Many people also buy Medigap to help with copays and deductibles. Alternatively, you can bundle everything with a Medicare Advantage plan, which includes dental and vision coverage as well.

You don't have to match your spouse's coverage choices. Getting started involves a two-step process that lets you customize coverage based on your health care needs and budget.

You qualify at 65, but you get coverage earlier if you're living with a disability, end-stage renal disease or ALS. 

The timing part is important as you can sign up for Medicare starting three months before your 65th birthday and three months after, so seven months total. Miss this window and you'll get hit with late penalties that stick around for life. If you qualify through kidney failure, coverage can go back up to 12 months before you apply, so don't put off signing up.

Medicare has four parts, and each one covers something different. Once you see how they work together, picking your coverage gets easier. You can also buy a Medicare Supplement plan if there are costs that you think aren’t covered by Medicare.

Medicare covers medically necessary hospital, medical and preventive care, with specific benefits depending on which parts you have. Original Medicare includes Part A for hospital coverage and Part B for medical services, while Part D adds prescription drug coverage. Medicare Advantage (Part C) combines Parts A and B and usually Part D in one private plan.

Original Medicare doesn't cover every health care expense. You'll pay for routine dental, vision and hearing services yourself unless you have other coverage or a Medicare Advantage plan that includes these benefits. Common services Original Medicare doesn't cover include:

Medicare and Medicaid are both government health insurance programs, but they serve different groups. Medicare is federal health insurance for people 65 and older and certain younger people with disabilities or qualifying conditions. Medicaid is a joint federal-state program for people who meet their state's eligibility requirements, including income and other criteria.

Figuring out Medicare enrollment can feel confusing with all the rules about timing and paperwork. Your path depends on whether you're already getting Social Security benefits, still working or retiring at 65. Here's what you need to know to avoid penalties and get covered on time.

Medicare starts at 65 or earlier if you qualify through a disability and gives you two main coverage pieces: Part A covers hospital stays and won't cost you a dime if you've worked 10 years. Part B handles doctor visits for $185 a month. You've got two paths: stick with Original Medicare and buy drug coverage separately, or choose Medicare Advantage that bundles everything, including dental and vision. 

You need to sign up three months before your birthday through three months after. Miss that window and you'll pay penalties every month for as long as you have Medicare. Those penalties don't disappear, and they add up fast.

People approaching 65 often have questions about what Medicare is and how it works. We've answered the most frequently asked questions about eligibility, coverage gaps and costs.