Medicare is the federal health insurance program for people who are 65 or older. People who have certain disabilities or permanent kidney failure – regardless of age – may also qualify for Medicare.

The program, which is funded in part by payroll taxes and premiums deducted from social security checks, was created to assist with the cost of health care. In fact, most U.S. citizens and permanent residents of the United States are eligible for free Medicare hospital insurance (Part A, below).

Medicare has four main coverage options. To find out which option is right for you, here’s a look at what they cover and cost*:

Medicare Part A: Hospital Insurance

What it covers:

  • Inpatient care in hospitals
  • Skilled nursing facility care
  • Hospice care
  • Home health care

Cost: Free, for many people. If you or your spouse paid Medicare taxes while working, you typically do not have to pay a monthly premium for Part A coverage. If you don’t qualify for premium-free Part A coverage, you can still receive Part A coverage by paying a premium for it.

If eligible, you will be automatically enrolled in Part A if you already receive benefits from Social Security or from the Railroad Retirement Board. Otherwise, you may need to apply for this coverage.

Medicare Part B: Medical Insurance

What it covers:

  • Services from doctors and other health care providers
  • Outpatient care
  • Home health care
  • Durable medical equipment
  • Some preventive services

Cost: Part B coverage is optional. You’ll pay a standard monthly premium (which varies by state) if you want to add it on.

Medicare Part C: Medicare Advantage

  • Includes all benefits and services covered under Parts A and B
  • Usually includes Medicare prescription drug coverage (Part D) as part of the plan
  • Run by Medicare-approved private insurance companies
  • May include extra benefits and services for an extra cost

Cost: To get the extra coverage provided in this plan, you’ll have to pay a monthly premium (which varies by state) – in addition to your Part B premium.

Part D: Prescription Drugs

  • Helps cover the cost of prescription drugs
  • Run by Medicare-approved private insurance companies
  • May help lower your prescription drug costs and help protect against higher costs in the future

Cost: This prescription drug coverage is optional, though it is typically already included in your Part C plan. You can also add Part D coverage to your Part A/B plan.

*All Medicare coverage information is from the Department of Health and Human Services and

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