Medicare Benefits Guide

Medicare pays for health care costs for seniors aged 65 and over, as well as some individuals with disabilities, including hospital stays, doctor visits, durable medical equipment, and more. Learning about the program’s complexities can help seniors understand what coverage they have — and what they may still need to pay for. Caring’s guide reviews Medicare coordination of benefits, costs, and more to help give you a big-picture view of this vital program.

Since it was signed into law by President Lyndon Johnson in 1965, Medicare has provided health insurance to millions of American residents aged 65 and older, as well as some under that age who are living with disabilities. As of June 2025, 68.5 million people were enrolled in Medicare — a 2% increase since 2022. Since the U.S. Census Bureau notes that the population aged 65 and over is growing nearly five times faster than the total population, it seems likely that the need for Medicare will also grow in the coming decades.

As the Trump administration proposes significant changes to both Medicare and its sister program, Medicaid, many seniors worry that they might lose coverage or face higher costs for their Medicare insurance. 

In May 2025, Trump released an executive order for his administration to offer Americans most-favored nation (MFN) pricing on pharmaceuticals, which could mean lower prescription drug prices. The executive order is pending with the Department of Health and Human Services (HHS).

The HHS under the leadership of Robert Kennedy Jr., has eliminated 10,000 jobs and billions of dollars in university research related to health care. It remains to be seen how these and other proposed changes will filter down to Medicare recipients. 

Thus far, President Trump’s changes to Medicare are administrative actions  — they are not legislative changes, and could still face review or reversal in Congress.

Most recipients of Medicare are aged 65 and older. They become eligible on their 65th birthday, and if they receive Social Security benefits, they are automatically enrolled in Medicare Parts A and B. Recipients must be U.S. citizens or legal permanent residents who have lived in the country for at least five continuous years before they apply. In addition, certain federal, state, or local workers who paid the Medicare‑only tax (MQGE) become eligible after the same SSDI & 24‑month Medicare waiting periods even though they’re not insured for Social Security cash benefits

This chart highlights the requirements for Medicare eligibility, both for older Americans as well as younger individuals living with a disability. 

When looking at Medicare benefits for seniors, break down the program into its constituent parts. Medicare has four primary elements, and eligibility and costs vary for each part. Below, we take a closer look at the coverage options that each part has for seniors and others and discuss eligibility requirements.

Medicare Part A is also called hospital insurance, which gives an indication of what it covers. A breakdown of specific costs covered includes the following:

• Inpatient hospital care (including long-term acute care with limits)
• Acute care (long-term care hospital costs)
• Skilled nursing facility care (after a 3-day qualifying hospital stay, up to 100 days)
• Nursing home care (not custodial or long-term care)
• Hospice care
• Home health care (intermittent skilled nursing, physical/occupational therapy, home health aide, and medical social services)
• Mental health and substance use disorder services when admitted to a general or psychiatric hospital
• Inpatient mental health (for psychiatric hospital admissions under Part A)

Medicare Part A does not cover custodial or long-term nursing home care, even though skilled nursing and hospice are included.

Many individuals with Part A do not pay a premium, but some do, based on whether they paid Medicare taxes previously. Eligibility requirements include the following:

 

• Age-Based Eligibility: Recipients must be at least 65 years old and eligible for either Social Security or Railroad Retirement Board cash benefits (RRB). If you paid Medicare taxes while working for a certain period (usually at least 10 years), you are likely to be eligible for premium-free Part A. If not, you should be able to buy this coverage for either $285 or $518, depending on how long you or your spouse paid taxes.
• Disability-Based Eligibility: Social Security Administration has a list of qualifying impairments. Medicare coverage can begin at any age for those with ALS (Lou Gehrig’s Disease) or end-stage renal disease. Those with ALS don’t have a 5-month wait on Social Security Disability Insurance (SSDI), nor a 24-month wait on Medicare – coverage begins the same month SSDI starts, at any age. Those with end-stage renal disease have coverage determined independent of SSDI, usually starting in the fourth month of dialysis. This also applies to children.

Medicare Part B, also called medical insurance, covers non-hospital-related costs. Medicare Parts A and B together are often referred to as Original Medicare, and form the foundation of coverage for the adults who are eligible for the program. In general, Part B helps cover preventative maintenance costs, outpatient care, and more, as we break out below.

These elements are generally covered by Medicare Part B:

• Services and supplies needed for the diagnosis and treatment of medical conditions. This may include care by a primary care physician, surgeon, emergency room care, and more that are accessed when you have not been admitted to the hospital
• Preventive services, such as regular visits to your primary care physician
• Ambulances
• Durable medical equipment, such as crutches or wheelchairs
• Clinical research
• Some outpatient prescription drugs (most, however, are covered by Part D, which we will discuss below)
• Mental health services (including some inpatient, outpatient, and partial hospitalization costs)

Note: Routine vision, dental, hearing, and outpatient drugs are not covered under Part B. Check with your provider, and speak to them about supplemental coverage.

• Aged-Based Eligibility: Seniors age 65 and over who are US citizens or legal residents living in the U.S. for at least five continuous years before applying; must be eligible for and enrolled in Medicare Part A
• Disability-Based Eligibility: Those with qualifying disabilities who are under 65 and eligible for Part A are also eligible for Part B.

Medicare Advantage is also called Medicare Part C. These plans must include all the benefits of Parts A and B, but may feature other benefits as well. Advantage plans differ from Original Medicare, which is administered by the government, in that they are managed by private insurance companies. The plans may also differ from insurer to insurer. If you have a Medicare Advantage plan, it will usually include Medicare Part D, which is prescription drug coverage. Seniors with Medicare Advantage plans receive all their health insurance benefits from the single plan, rather than through the multiple parts of Original Medicare.

Unlike Original Medicare (Parts A and B), Medicare Advantage plans may differ because they are offered by private insurance companies rather than the government. At a minimum, they must include all the benefits of Parts A and B. In addition, Medicare Advantage benefits may or may not include the following:

 

• Prescription drug coverage
• Vision coverage
• Hearing care
• Dental services
• Fitness programs or gym memberships
• Over-the-counter (OTC) drugs or healthcare items
• Other benefits, as determined by the plan provider

To be eligible for Medicare Advantage, you need to be eligible for and enrolled in Medicare Parts A and B, and live within the service area for the Advantage plan you choose.

Part D, the last of Medicare’s four parts, covers prescription drug costs for both brand-name and generic medications. Unlike parts A and B, it is voluntary for seniors, who can choose to enroll if they wish when they sign up for Original Medicare. Most Medicare Advantage plans also include this coverage. Note that drugs you receive when you are a hospital inpatient are covered by Medicare Part A, while those you might get in a doctor’s office or outpatient setting, such as vaccines, are generally covered by Part B.

Medicare Part D covers a broad range of drugs, which can be found on the plan’s drug list, called a formulary. Each drug list must contain at least two drugs in the most commonly prescribed categories and classes, but plans can choose which drugs they offer. All plans must include drugs in protected classes, which include:

• Cancer drugs
• HIV/AIDS drugs
• Antidepressants
• Antipsychotics
• Anticonvulsants
• Immunosuppressants for organ transplants

Those who are eligible and enrolled in Medicare Parts A and B are also eligible for Part D. If enrolled in a Medicare Advantage plan, they must live in the service area for their plan.

Medigap, also called Medicare Supplement coverage, helps fill in the gaps in coverage that arise with Original Medicare insurance. Although these plans are mandated and standardized by Federal policy, they are sold by private insurers. You can only buy Medigap coverage if you have Original Medicare; it is not available for those with Advantage plans. Although there are differences in Medigap depending on the state you live in, overall, there are 10 Medigap policies available. A Medigap policy is likely to cover out-of-pocket costs, including copayments, coinsurance, and deductibles, which all feature in Original Medicare.  

When asking yourself, What do I need to know about Medicare? You’ll quickly realize that knowing how to enroll in the program is a top priority. Fortunately, signing up for Medicare online is simple. One key factor, however, is getting your timing right. There are several windows of opportunity for enrolling in Medicare.

For most people, who are enrolling when they turn 65, the window opens three months before their birthday month and closes three months after. Thus, they have a total of seven months in which they can enroll in Medicare. So, for example, if your birthday is in June, you can enroll as early as March 1 of the year you turn 65, and as late as September 30. Those who are not already collecting Social Security or Railroad Retirement Board benefits must enroll either online (see link above) or through their local Social Security office. If they miss this window, they may face a lifelong penalty through higher premium rates for Part B coverage.

If you missed the initial enrollment period, you can sign up every year during the General Medicare Enrollment Period, which begins on January 1 and ends March 31. Your coverage will begin on the first day of the month after you apply.

If you have a qualifying special circumstance, you can sign up for Medicare Parts A and B during a Special Enrollment Period, with dates that vary depending on the circumstance. Qualifying special circumstances include moving, losing other coverage, or other special situations.

Medicare provides some coverage for senior health care. In many cases, care may be given at home or in an independent living residence if you or your loved one is housebound and in need of doctor-prescribed skilled care. Some services provided in a nursing home may also be covered, but Medicare does not pay for room and board in assisted living, memory care units, or nursing homes.

As we noted above, Medicare will not pay for room and board costs in a residential setting, such as an assisted living facility. In some regions of the country, seniors who are jointly eligible for Medicare and Medicaid, called dual eligibles, may qualify for Programs of All-Inclusive Care for the Elderly, or PACE. PACE is currently available in 33 states, and the program is growing. PACE covers Medicare Parts A, B, and D benefits and provides other care and services to older adults who qualify.

Medicare pays for nursing homes in certain situations only. Medicare Part A provides coverage in a nursing home if a patient needs nursing home care for a short period of time following a hospital stay. Medicare will fully cover the nursing facility for the first 20 days, and up to 100 days per benefit period, although there are copays for days 21-100. Medicare will not pay for “custodial care,” however, which is long-term care needed daily, and not because of an injury or illness that required hospitalization.

Note that there are two similarly-named types of care given in the home. In-home care, or home care, offers companionship and non-medical assistance to seniors in their homes. It may include cooking meals, doing laundry, or reading to the senior. Home health care, on the other hand, includes medical assistance given by trained medical professionals, such as therapy. Home health care may be covered by Medicare if it’s part-time and medically necessary. This might include wound care, injections, or physical or occupational therapy. However, Medicare will not pay for nonmedical in-home care, such as meal preparation or housekeeping duties. Medicare will not cover 24/7 in-home care, either.

Medicare is a federally administered health insurance program designed to cover seniors aged 65 and over, along with individuals with disabilities. There are four parts to the program, which cover the costs of hospital stays, doctor’s visits, prescription medications, and more. Some benefits, like Medicare vision benefits, may be available through Advantage (Medicare Part C) plans, which, unlike Original Medicare, are available from private insurers. Although Medicare has copays, coinsurance, and deductibles, it can save seniors from high medical costs when they need health care. For seniors with financial limitations, there may be financial and legal resources that can help.

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