Key Takeaways:

• Medicare is divided into four parts: A, B, C, and D, each covering different healthcare services. Understanding what each part offers helps you avoid unexpected costs and coverage gaps.

• Enrollment timelines matter. Missing deadlines can lead to penalties and delays in coverage, so it’s important to know when and how to sign up.

Understanding Medicare: A Breakdown of Its Four Parts

Medicare might seem straightforward at first glance, but once you start exploring its different parts, rules, and costs, it becomes clear that there’s a lot to unpack. Whether you’re preparing for enrollment or just want to make sense of your coverage, understanding Medicare’s ABCs is key to making informed healthcare decisions. Here’s what you need to know about each part and how they work together.

Medicare Part A: Hospital Coverage and What It Includes

Medicare Part A is your hospital insurance. It covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health services. Most people qualify for premium-free Part A if they or their spouse have paid Medicare taxes for at least 10 years (40 quarters). If you don’t qualify for premium-free coverage, you can still enroll but will have to pay a monthly premium.

What You Pay Under Part A in 2025

• Deductible: $1,676 per benefit period

• Hospital Stay Costs:

  • Days 1-60: $0 after deductible

  • Days 61-90: $419 per day

  • Beyond 90 days: $838 per lifetime reserve day

• Skilled Nursing Facility Costs:

  • Days 1-20: $0

  • Days 21-100: $209.50 per day

  • Beyond 100 days: You are responsible for all costs

• Home Health Care: Covered with little to no out-of-pocket cost for approved services.

Medicare Part B: Your Outpatient Medical Coverage

Medicare Part B covers doctor visits, preventive care, outpatient procedures, lab tests, durable medical equipment, and some home healthcare services. Unlike Part A, Part B requires a monthly premium, which is based on your income.

What You Pay Under Part B in 2025

• Standard Premium: $185 per month

• Annual Deductible: $257

• Coinsurance: 20% of Medicare-approved services after meeting the deductible

Preventive Care and Additional Benefits

Medicare Part B covers a range of preventive services, including annual wellness visits, flu shots, cancer screenings, and cardiovascular disease screenings. Many preventive services are covered at no cost to you if received from a Medicare-approved provider.

Medicare Part C: Medicare Advantage Plans Explained

Medicare Part C, also called Medicare Advantage, is an alternative way to receive Medicare benefits through private insurance plans. These plans must cover everything Original Medicare (Parts A and B) covers, but many also offer additional benefits, such as dental, vision, and hearing coverage.

Key Things to Know About Part C in 2025

• Plan costs and benefits vary by location.

• You must still pay your Part B premium.

• Many plans include prescription drug coverage (like Part D).

• Some plans offer fitness programs, transportation to medical appointments, and other supplemental benefits.

Medicare Part D: Prescription Drug Coverage and Costs

Medicare Part D covers prescription medications. Each plan has its own list of covered drugs (formulary) and cost-sharing rules, so reviewing plan details is crucial.

2025 Medicare Part D Costs

• Maximum Deductible: $590

• Annual Out-of-Pocket Cap: $2,000 (after which catastrophic coverage kicks in)

• Medicare Prescription Payment Plan: A new option allowing enrollees to spread their out-of-pocket drug costs over the year

• Coverage Phases: Part D includes an initial coverage phase, the coverage gap phase, and the catastrophic coverage phase, where costs vary at each stage.

Enrollment Periods: Don’t Miss These Important Deadlines

Signing up for Medicare at the right time is crucial to avoid penalties and coverage gaps. Here are the key enrollment periods to remember:

Initial Enrollment Period (IEP)

Your first opportunity to enroll in Medicare is around your 65th birthday. The IEP lasts for seven months:

• Begins three months before your 65th birthday

• Includes your birthday month

• Ends three months after your 65th birthday

General Enrollment Period (GEP)

If you miss your IEP, you can sign up during the General Enrollment Period, which runs from January 1 to March 31 each year, with coverage starting July 1. Late enrollment penalties may apply.

Special Enrollment Period (SEP)

Certain life events, such as losing employer coverage, may qualify you for a Special Enrollment Period, allowing you to enroll outside of the standard periods without penalties.

Annual Enrollment Period (AEP)

From October 15 to December 7, you can make changes to your Medicare Advantage or Part D plan for the following year.

Costs and Coverage: How Medicare Works with Other Insurance

If you have other coverage, such as employer insurance or retiree benefits, understanding how Medicare coordinates with your plan is important.

• Employer Coverage: If you’re still working and have employer-sponsored health insurance, you may be able to delay enrolling in Part B without penalties.

• Medicaid: If you qualify for Medicaid, it may help pay Medicare premiums and other costs.

• Medicare and FEHB: Federal retirees can keep their FEHB coverage and may choose to enroll in Medicare for additional benefits.

Common Pitfalls to Avoid

Navigating Medicare can be tricky, and mistakes can lead to costly consequences. Here are some common pitfalls to watch out for:

• Missing Enrollment Deadlines: Late enrollment in Part B and Part D can result in lifetime penalties.

• Assuming Medicare Covers Everything: Medicare doesn’t cover long-term care, dental, vision, or hearing services unless you have additional coverage.

• Not Reviewing Annual Plan Changes: Medicare plans can change yearly. Reviewing your Annual Notice of Change (ANOC) ensures your plan still meets your needs.

How to Choose the Right Medicare Coverage for You

Selecting the best Medicare coverage depends on your healthcare needs, budget, and preferences. Consider these factors when making your decision:

• Healthcare Needs: Do you need frequent doctor visits, specialized care, or specific prescriptions?

• Budget: Can you afford premiums, deductibles, and out-of-pocket costs?

• Provider Choice: Do you want access to a broad network of doctors, or are you okay with a managed care approach?

• Additional Benefits: Do you need coverage for dental, vision, or hearing?

Making Sense of Your Medicare Options

Understanding Medicare isn’t always simple, but taking the time to learn about its different parts, costs, and enrollment rules can help you make better healthcare decisions. By reviewing your options, keeping track of deadlines, and assessing your healthcare needs, you can ensure that you enroll in the right coverage without unnecessary expenses or penalties.

If you need help selecting a plan, getting in touch with a licensed agent listed on this website can provide expert guidance tailored to your situation.