Medicare in Plain English — What It Covers, What It Costs, and What Nobody Tells You

YOUR MONEY — Issue No. 4

Medicare in Plain English

What it covers, what it costs, and the decisions that matter most when you turn 65.

Most people spend more time researching a car purchase than they do understanding Medicare before they enroll.

That's not a criticism. Medicare is genuinely complicated. The government literature runs hundreds of pages. The commercials are confusing. And the decisions you make at 65 can follow you — financially — for the rest of your life.

This issue covers what you actually need to know. Plain and simple.

The four parts of Medicare

Medicare is divided into four parts. Each covers something different and each has its own cost structure.

Part A — Hospital Insurance

Part A covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health care. For most people Part A is premium-free — if you or your spouse worked and paid Medicare taxes for at least 10 years you paid for it already.

What Part A does not cover is the entire bill. There is a deductible per benefit period — not per year — and coinsurance costs that increase the longer you stay in the hospital. Understanding what you actually owe under Part A is where many patients get surprised.

Part B — Medical Insurance

Part B covers outpatient care — doctor visits, preventive services, lab work, durable medical equipment, and most of the care you receive outside a hospital. Unlike Part A, Part B has a monthly premium that most enrollees pay.

The standard Part B premium changes annually. There is also an annual deductible and after that Medicare typically covers 80% of approved costs — leaving you responsible for the remaining 20% with no out of pocket maximum under Original Medicare alone.

That 20% with no cap is one of the most important things to understand about Original Medicare. It is why supplemental coverage exists.

Part C — Medicare Advantage

Part C is an alternative way to receive your Medicare benefits through a private insurance company rather than the government directly. Medicare Advantage plans often bundle Parts A, B, and sometimes D together and may include additional benefits.

Medicare Advantage deserves its own full issue — and we will cover it in depth next week. For now, know that it exists as an option and that choosing between Original Medicare and Medicare Advantage is one of the most consequential decisions you'll make at 65.

Part D — Prescription Drug Coverage

Part D covers prescription medications. It is offered through private insurance companies approved by Medicare. If you have Part A and Part B you can add a Part D plan — and in most cases you should, even if you don't currently take many medications.

Why? Because if you go without Part D when you're first eligible and enroll later — you may pay a permanent late enrollment penalty added to your premium for as long as you have Part D.

More on Part D costs and coverage gaps in the Member deep-dive.

Will I be able to keep my current providers?

Under Original Medicare — Parts A and B — you can see any provider who accepts Medicare anywhere in the country. No referrals required. No network restrictions. If your doctor accepts Medicare you can continue seeing them.

The key question is whether your provider accepts Medicare assignment — meaning they accept what Medicare pays as full payment. Most do. Some don't. A quick call to your provider's office before you enroll confirms their status.

Does Medicare cover vision, dental, and hearing?

This surprises many people.

Original Medicare does not cover routine vision exams, eyeglasses, routine dental care, dentures, or routine hearing exams and hearing aids. These are among the most common healthcare needs for people over 65 — and they are not covered.

There are exceptions — Medicare will cover certain eye conditions, certain dental procedures related to a covered medical procedure, and certain hearing tests ordered by a physician. But routine care for eyes, teeth, and ears requires separate coverage or out of pocket payment.

This is one of the most significant gaps in Original Medicare and one of the most important things to plan for before you turn 65.

Is Medicare required?

No — Medicare is not mandatory. You can decline it.

However declining Medicare has consequences worth understanding. If you have employer coverage and delay Medicare enrollment — you may qualify for a Special Enrollment Period later with no penalty. If you simply decline and don't have qualifying employer coverage — late enrollment penalties apply.

Most people enroll in Medicare when they turn 65 because the cost and coverage usually make sense. But it is a decision, not a requirement.

Can I enroll if I'm still working?

Yes — and this is one of the most common questions I hear.

If you are still working and covered by employer insurance when you turn 65 you have options. You can enroll in Medicare alongside your employer coverage, delay Part B enrollment without penalty if your employer coverage qualifies, or enroll in Part A only since it is typically premium-free.

The right answer depends on the size of your employer, the quality of your employer coverage, and the coordination between the two plans. This is a conversation worth having with your HR department and a Medicare counselor before you turn 65.

One free resource worth knowing about: your State Health Insurance Assistance Program — SHIP — provides free, unbiased Medicare counseling from trained specialists who are not insurance salespeople. Find your local SHIP counselor at shiphelp.org.

The Member deep-dive this week covers Part D costs and the coverage gap in detail, cost smoothing with a real example, the two midnight rule, late enrollment penalties, how Medicare coordinates with employer insurance, and what higher income earners need to know about Part B premiums.

Next week: Medicare Advantage and Medigap — the two supplemental options explained, and how to choose between them.

Plain Medicine is published for educational purposes only and does not constitute medical advice or establish a patient-provider relationship. Always consult your healthcare provider before making medical decisions.

— Kyle

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