Medicare Basics

More than 66 million Americans are on Medicare now. This page explains how Original Medicare covers someone who does not have a Medicare Advantage plan or a Medicare Supplement (Medigap).

What is Medicare?

Medicare is a federal government health insurance program administered by the Centers for Medicare & Medicaid Services. It’s the largest health insurance program in the country. To be eligible you must be a citizen of the United States and meet certain requirements — if you are not a citizen, the Social Security Administration can tell you whether you would be eligible.

Are you eligible?

Can you answer yes to at least one of the following?

• Are you 65 years of age or older?
• Have you been under 65 and on disability with the federal government for 24 months?
• Are you in End-Stage Renal Disease — kidney failure that requires a transplant or dialysis?

If so, then you could be eligible for Medicare benefits.

What does Medicare cover?

Medicare is divided into four parts, known simply as Part A, Part B, Part C and Part D. This page walks through Part A and Part B — together called Original Medicare — and how Part D fits alongside them. Part C, Medicare Advantage, is a different route altogether; it’s covered on Your Options.

Part A — hospital coverage

Part A costs $0 per month for most people. It covers hospitalization, and it also covers a skilled nursing facility, hospice, and home health care if certain conditions are met.

A benefit period starts the day you’re admitted as an inpatient and ends once you’ve been out of hospital or skilled nursing care for 60 consecutive days. If you’re readmitted after that, a new benefit period — and a new deductible — begins. That means you could owe the deductible more than once in a year if you have separate hospital stays more than 60 days apart.

What you pay per benefit period (2026)

Your 60 lifetime reserve days are a one-time bank you can draw on across your lifetime — they do not renew with each benefit period.

Two exceptions worth knowing

• Part A covers up to 190 days of inpatient mental health care in a freestanding psychiatric hospital over your entire lifetime — a separate, stricter lifetime cap.
• Skilled nursing facility stays work similarly but with different numbers: $0 for the first 20 days, then $217 per day for days 21–100.

Part B — medical and outpatient coverage

Part B is the outpatient side of Original Medicare — it covers much of what Part A doesn’t: doctor visits, outpatient services, some home health care, preventive care, durable medical equipment, and diagnostic services. It does not cover dental, vision, hearing aids, or most prescription drugs. Those need a separate Part D plan or a Medicare Advantage plan that includes drug coverage.

What it costs

• Monthly premium: $202.90 for most people in 2026. It’s often deducted directly from Social Security.
• Annual deductible: $283, which resets every January 1 — unlike Part A’s per-benefit-period deductible.
• Coinsurance: once you meet the deductible, Medicare generally covers 80% of approved services and you’re responsible for the remaining 20% — unless you have supplemental coverage to help pick that up.

The higher-income surcharge (IRMAA)

If your income is above certain thresholds you’ll pay more than the standard premium. This is called IRMAA — the Income-Related Monthly Adjustment Amount — and it’s based on your tax return from two years prior, so 2026 premiums use 2024 income.

If your modified adjusted gross income was $109,000 or less as an individual, or $218,000 or less filing jointly, you pay the standard $202.90. Above that, premiums scale up through several tiers — total monthly Part B premiums for higher earners run from $284.10 up to $689.90, topping out at incomes of $500,000 (individual) or $750,000 (joint).

IRMAA is recalculated every year, so if your income changes your surcharge can change too. If it applies to you, Social Security will send a notice with the amount and the reason — and you can appeal it if a life event such as retirement or losing a spouse caused a temporary spike.

Enrollment timing matters

Your Initial Enrollment Period runs seven months around your 65th birthday: the three months before, the month of, and the three months after. Miss that window without qualifying employer coverage and you may face a late enrollment penalty added permanently to your premium.

Part D — prescription drug coverage

Since Parts A and B don’t cover most retail prescription drugs, Part D fills that gap. It’s delivered through private plans — either standalone drug plans or bundled into Medicare Advantage — and it’s optional, though skipping it when you’re first eligible can mean a permanent late-enrollment penalty.

In 2026 it works in three phases: you pay full price up to your plan’s deductible (at most $615), then about 25% of costs, and once your out-of-pocket spending reaches $2,100 you pay $0 for covered drugs for the rest of the year. The old “donut hole” coverage gap is gone.

See the full Part D page for what counts toward the cap, the insulin cap, vaccines, Extra Help, and the Medicare Prescription Payment Plan.

Figures reflect 2026 Medicare costs as published by the Centers for Medicare & Medicaid Services (CMS) and are subject to annual change. Plan premiums cited are general ranges and will vary by carrier, plan, and county — always confirm current rates for a specific plan before enrolling.

Last reviewed: August 2026