Medicare is a federal insurance program that provides guaranteed health insurance for people age 65 and older and for younger people who qualify because of a disability.
Commonly referred to either original Medicare or traditional Medicare, the program refers to the first two parts of Medicare, Part A and Part B.
- Part A helps pay for inpatient stays in hospitals and skilled nursing facilities, some home care and end-of-life hospice care.
- Part B covers doctors’ services, diagnostic screenings, lab tests, outpatient care, preventive services, plus some medical equipment and transportation.
Other parts of Medicare include Part D prescription drug coverage, and Part C Medicare Advantage plans. Neither of these are considered original Medicare.
Medicare Eligibility
Being eligible for Medicare isn’t based on your income or assets, and you can’t be denied coverage or charged more because of existing medical conditions. With original Medicare, you can use any doctor or other provider in the United States that participates in the program. More than 95 percent of surgeons, as well as some 90 percent of non-pediatric physicians, 80 percent of most other specialists and 60 percent of psychiatrists, are accepting new Medicare patients.
Medicare Cost
Medicare isn’t free. You’ll find that original Medicare has fees similar to private-sector insurance you probably had during much of your work life.
Premiums. Most people don’t have to pay premiums for Part A because they or their spouse had Medicare taxes withheld from their paychecks for 40 quarters; 10 years of work that don’t have to be continuous. Almost everyone pays a premium for Part B, typically $164.90 a month in 2023 and $174.70 in 2024; high earners can expect to pay more.
Deductible. You must pay this predetermined amount of out-of-pocket costs before your Medicare coverage kicks in. In 2024, the Part A deductible is $1,632 per benefit period and the Part B deductible is $240.
Copayment. After you meet your deductible, you’ll pay a fixed dollar amount for certain services and supplies, such as $20.
Coinsurance. Also after you meet your deductible, you’ll pay a set percentage of certain bills, such as 20 percent of the cost for most Part B services.
