Medicare Explained: Parts, Eligibility and How It Works

What is Medicare?

Medicare is a United States government health insurance program. It chiefly serves people who are 65 or older. Some younger people can also qualify based on disability or certain serious health conditions, including end-stage renal disease and amyotrophic lateral sclerosis, often called ALS ¹.

The Centers for Medicare and Medicaid Services, known as CMS, runs the program. The Social Security Administration also handles tasks such as determining eligibility and managing some payments ¹. Medicare is distinct from Medicaid, although a person may qualify for both programs ¹.

What do Medicare’s four parts cover?

Medicare is organized into Parts A, B, C and D. Part A helps cover hospital care, skilled nursing services and hospice. Part B covers outpatient services, and Part D helps pay for prescription medicines people take themselves ¹.

Part C, also known as Medicare Advantage, lets people receive Part A and Part B services through private plans. Those plans can differ in their benefits and generally offer some additional benefits ¹. The details depend on the plan, so this overview does not describe any specific option.

Does Medicare pay all health care costs?

No. Having Medicare does not mean every health expense is covered or paid in full. Enrollees may have deductibles, which they pay before coverage contributes, along with co-payments and other expenses ¹.

The source estimates that Medicare pays roughly half of the health care costs of those enrolled. People may use other insurance or choose a Medicare Advantage plan to address some remaining costs, depending on their circumstances ¹. The source also says Medicare does not cover long-term custodial care: ongoing assistance with personal needs ¹.

When did Medicare begin, and why does it matter?

Congress created Medicare in 1965 as part of the Social Security Amendments. President Lyndon Johnson signed the law on July 30 of that year ¹. The program initially provided health insurance to people 65 and older without basing coverage on their income or medical history ¹. Eligibility later grew to include certain younger people with disabilities and specified conditions ¹.

Medicare is important because it provides health coverage to many older adults and some people with disabilities. Its parts help people arrange coverage for hospital services, outpatient care and medicines. It is not a guarantee that all health costs will be covered. Plan options, rules and costs can change, so this general explanation should not be treated as a description of current plan terms.