Medicare for Dummies: What is Medicare in Simple Terms?
In simple terms, Medicare is affordable government health insurance that you get when you turn 65.
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If you're under 65, you can get Medicare if you have Lou Gehrig's disease (ALS), kidney failure (end-stage renal disease) or you've had Supplemental Security Income (SSI) benefits for at least two years.
You can get Original Medicare (Parts A and B) directly through the government. But many people choose to get bundled coverage through private companies, called Medicare Advantage plans.
Medicare for dummies: Medicare explained
Medicare can be confusing because it's made up of many parts with complex names. The best way to understand Medicare is to break it up into its five main parts.
Explanation of Medicare plans for dummies
Original Medicare (Parts A and B)
- Medicare Part A: This pays for stays at hospitals and skilled nursing facilities.
- Medicare Part B: This pays for trips to the doctor, some drugs and certain types of medical equipment, including wheelchairs, walkers and hospital beds.
Medicare Advantage
Private companies sell and manage Medicare Advantage plans. These plans have to cover all the services you'd get with Medicare Parts A and B. Plus, many plans offer extra benefits such as prescription drug coverage, vision, dental and gym memberships.
Medicare Advantage plans are similar to the coverage you'd get through a job or state health exchange. You'll have a deductible, copays and coinsurance up to an annual limit, called your out-of-pocket maximum.
You may also have to pay a separate monthly rate, although most people have access to a $0 Medicare Advantage plan.
Medicare Advantage plans have become increasingly popular because they tend to cover more services than Original Medicare. With many Medicare Advantage plans, you can get these extra benefits for free.
But there are two big downsides to Medicare Advantage plans.
- Worse access to some services: According to a report by the Kaiser Family Foundation (KFF), it's harder to get access to some services with Medicare Advantage than with Original Medicare. That's because many Medicare Advantage plans require that you get permission from your insurance company before you're allowed to see certain types of doctors. Original Medicare has this requirement only for a few services.
- Less freedom to choose your doctors: Many Medicare Advantage plans limit you to a network of doctors. With Original Medicare, you can visit any doctor in the country who takes Medicare.
Medigap (Medicare Supplement)
Medicare Supplement (Medigap) plans help you pay for the costs you're responsible for with Original Medicare.
A Medigap plan can save you tens of thousands of dollars or more. That's because Original Medicare doesn't have an annual cap on how much you can spend in a single year.
You can choose from 10 different Medigap plan types. Although these plans are sold by private companies, the government sets rules about what each plan has to cover. That means a Medigap Plan G has the same coverage whether you buy it from Blue Cross Blue Shield or UnitedHealthcare. The only difference between companies is the cost and customer service you get.
Most people choose from just three plan types:
- Medigap Plan F offers the most coverage, but this plan has not been available to new enrollees since 2020. Medigap Plan G has the best coverage for new Medicare enrollees.
- Medigap Plan N covers many of the same services as Plan G, but you may have to pay a little more when you go to the doctor.
These plans are popular because they offer the most coverage. Keep in mind that you can get a Medigap plan only if you have Original Medicare.
Medicare Part D
It's a good idea to check the list of covered drugs, called a formulary, before you buy a plan. You can speak to your broker or a company representative to make sure your plan will cover any drugs you're currently taking.
Medicare costs for dummies
The cost you pay for Medicare depends on which parts you have.
Everyone has to pay a $185 monthly rate for Medicare Part B. Plus, if you have a high income, you may have to pay an extra surcharge, called IRMAA. Remember that you have to pay your Part B monthly rate whether you have Original Medicare or a Medicare Advantage plan.
Medicare Part A is free for 99% of Medicare enrollees because it's funded by taxes you paid when you were working. You may be responsible for a Part A monthly rate if you or a spouse didn't pay Medicare taxes for at least 10 years. In 2025, the cost of Medicare Part A was $285 per month if you paid Medicare taxes for seven and a half to 10 years or $518 per month if you paid less than seven and a half years of Medicare taxes.
Because Medicare Advantage, Medigap and Part D plans are sold by private companies, your cost will depend on factors such as the company you choose, where you live and, in some cases, your age.
Average Medicare costs
Average monthly cost | |
|---|---|
| Medicare Advantage | $28 per month |
| Medicare Supplement (Plan G) | $159 per month |
| Medicare Part D | $65 per month |
Average costs are for Medicare Advantage plans with prescription drug coverage.
Keep in mind that you may be responsible for some costs when you go to the doctor or get a prescription filled.
How you get coverage will determine what you pay at the doctor's office. For example, you usually won't have to pay anything when you go to the hospital if you have Original Medicare with Medigap Plan G. But you'll be responsible for about one-fifth of your costs if you have Original Medicare without a Medigap plan.
Medicare Advantage plans typically require that you meet a deductible before most coverage starts. Then you'll have to pay copays or coinsurance when you go to the doctor until you hit your yearly spending cap.
Medicare eligibility for dummies
You'll typically become eligible for Medicare when you turn 65. It's also possible to get Medicare at any age if you have Lou Gehrig's disease (ALS) or kidney failure (end-stage renal disease) or you've gotten Social Security or Railroad Retirement Board (RRB) benefits for at least 24 months.
If you're not eligible for Social Security or RRB benefits because you're a government worker, you can get Medicare Part A (hospital coverage) if you've had a qualifying disability for 29 months.
Medicare enrollment for dummies
Many people don't need to take any special actions to enroll in Medicare. That's because the government automatically signs you up for Medicare at age 65 if you're taking Social Security payments.
If you decide to delay Social Security payments, you'll need to sign up online at SSA.gov, over the phone at 1-800-772-1213 (TTY 1-800-325-0778) or at your local Social Security Administration office.
You can enroll up to three months before your birthday month and up to three months after. If you wait until after this time frame, called your initial enrollment period, you'll have to pay a late enrollment fee unless you have coverage through your workplace or a spouse's. This fee never goes away, so it's a good idea to enroll as soon as possible.
If you miss your initial enrollment period, your next opportunity to sign up will come during Medicare open enrollment (Oct. 15 to Dec. 7). You can get, drop or switch to or from Medicare Advantage or Part D plans during this time.
You can also switch plans during Medicare Advantage open enrollment, which runs from Jan. 1 to March 1 every year. You can do this only if you already have a Medicare Advantage plan.
Outside of these periods, you may be eligible to change your Medicare coverage if you undergo a major life event such as a move or if you lose your current coverage. These can open what's called a special enrollment period that lets you add or drop coverage at any time during the year.
You need to sign up for Original Medicare before you can enroll in a Medicare Advantage plan.
You can buy a Medigap plan at any point during the year. But you'll get the best rates if you shop during the first six months you're eligible for Medicare. That's because insurance companies aren't allowed to consider your health history during this time.
If you wait until after this six month period, companies can charge you higher rates or refuse to sell you coverage based on your overall health.
Frequently asked questions
What is Medicare in simple terms?
To explain Medicare simply, it's a type of government health insurance that's mostly used by people age 65 and up. You can choose between Original Medicare (Parts A and B) and bundled coverage sold by private companies, called Medicare Advantage plans.
How do I learn about Medicare?
You don't need to buy a book like Medicare for Dummies to learn about Medicare because you can get the same information for free from a high-quality online guide or by calling your state's Medicare and Seniors' Health Insurance Information Program (SHIIP) office.
What is the best resource to learn about Medicare?
If you want help understanding Medicare, you can visit Medicare.gov. This website has many helpful resources for understanding Medicare. Plus, you can download the latest version of "Medicare &
Methodology
Information about Medicare eligibility requirements and enrollment rules came from the Centers for Medicare and Medicaid (CMS) and the Social Security Administration (SSA). Cost data for Medicare Advantage, Part D and Medigap plans came from CMS public use files.
Average rates for Medicare Advantage plans only include policies with prescription drug coverage. Average rates don't include employer-sponsored plans, special needs plans, Medicare-Medicaid plans (MMPs), Program of All-Inclusive Care for the Elderly (PACE) plans, sanctioned plans and health care prepayment plans (HCPPs).
Other information came from Medicare.gov, KFF and the U.S. Department of Health and Human Services (HHS).
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