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What Is Medicare? Parts A, B, C & D Explained

Medicare is federal health insurance for Americans 65 and older, plus certain younger people with disabilities or specific conditions. It's divided into four parts: Part A (hospital), Part B (medical), Part C (Medicare Advantage), and Part D (prescription drugs). Most people get Part A free and pay a monthly premium for Part B.

Who Qualifies for Medicare?

  • Age 65+: US citizens or permanent residents with 5+ years residency
  • Disability: People under 65 who have received Social Security Disability (SSDI) for 24+ months
  • ESRD: End-Stage Renal Disease (kidney failure requiring dialysis or transplant)
  • ALS: Amyotrophic Lateral Sclerosis (Lou Gehrig's disease) — eligible immediately

The Four Parts of Medicare

PartCovers2024 Cost
Part A (Hospital)Inpatient hospital, skilled nursing facility, hospice, some home health$0 premium if 40+ work quarters; $278–$505/mo otherwise
Part B (Medical)Doctor visits, outpatient care, preventive services, durable medical equipment$174.70/month standard premium + $240 annual deductible
Part C (Medicare Advantage)All Part A & B benefits through private insurer; often includes dental, vision, hearingVaries by plan; often $0 premium plans available
Part D (Prescription Drugs)Prescription medications through private plansVaries; average ~$55.50/month in 2024
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Part A: Hospital Coverage Costs

Most people pay $0 for Part A if they (or their spouse) worked and paid Medicare taxes for at least 40 quarters (10 years). Part A covers inpatient hospital stays, but you pay:

  • $1,632 deductible per benefit period (2024)
  • $0/day for days 1–60
  • $408/day for days 61–90
  • $816/day for days 91+ (lifetime reserve days)

Part B: Medical Coverage Costs

Part B covers outpatient services. After meeting the $240 annual deductible, Medicare pays 80% and you pay 20% coinsurance with no out-of-pocket maximum (unless you have supplemental coverage).

Enrollment Windows

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Late Enrollment Penalty — Permanent

If you don't sign up for Part B when first eligible, your premium increases 10% for each 12-month period you delay — and this penalty is permanent for as long as you have Medicare. The same applies to Part D drug coverage.

Your Initial Enrollment Period is a 7-month window: 3 months before your 65th birthday month, your birthday month, and 3 months after. Sign up early to avoid delayed coverage.

Part D: Prescription Drug Coverage

Part D has changed significantly in 2024. Key thresholds:

  • Deductible phase: Pay up to $545 before coverage kicks in
  • Initial coverage: You and your plan share costs until total drug spending reaches $8,000
  • Catastrophic coverage: After $8,000, you pay $0 for covered drugs for the rest of the year (new in 2024)