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September 24, 2025

Understanding the Basics of Medicare

Insurance

Medicare 101: Your guide to the basics

When you’re just getting started with Medicare, it’s important to get the information you need so you can feel confident picking the right plan for you. That’s where CorInsurance comes in. We’ve helped our clients learn the basics of Medicare to make choosing a plan as simple as possible, and our expert Sarah Gerber is here to help you, too.

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Medicare Basics

  • Who is eligible?
    • Age: 65 and older
    • Disability: under 65 and receiving Social Security Disability Insurance (SSDI) payments for more than 24 months
    • Illness: Any age with end-stage renal diseases (ESRD) or Lou Gehrig's Disease (ALS)
    • And, you must have qualifies residency: U.S. citizen or permanent resident for five consecutive years
  • The Four Parts of Medicare Coverage
    • Part A: Hospital Coverage (original Medicare)
    • Part B: Medical Coverage (original Medicare)
    • Part C: Medicare Advantage
    • Part D: Prescription Drug Coverage
      • Note: Part C & D are offered through private insurance companies
  • How Medicare Works – Government Provided
    • A Medicare ID card is a red, white, and blue card that proves your enrollment in Medicare Part A, Part B, or both. It shows your name, your Medicare number (which is a 11 character long mixture of numbers and letters) and the dates that your Medicare coverage began. You may receive your Medicare ID card automatically if you are receiving early social security retirement or disability benefits, or you may need to enroll manually if you are not.
  • How Medicare Works – Coverage by Private Insurers
    • Part C: Medicare Advantage Plan
      • Assign Part A and Part B benefits to a private plan that administers benefits on behalf of Medicare
      • May include Part D coverage
    • Part D: Prescription Drug Coverage
      • Optional plan (penalties are applied for late enrollment)
      • Not included in Original Medicare; additional monthly premium when purchased alone
      • Each prescription drug plan is different, formularies identify which drug are covered
      • You may qualify for Extra Help with prescription costs
      • Regulated by medicare, but provided by private insurance companies
  • How Medicare Works – What’s Covered and What’s Not
    • Things to know about Original Medicare
      • Original Medicare covers about 80% of all Medicare approved services.
      • Coverage does not include coverage for dental care, contacts/eyeglasses, hearing aids, over the counter benefits
      • Original Medicare does not cover prescription drugs except for medications you may take as an inpatient in a hospital
      • Medicare Part A and Part B do not offer coverage for most healthcare received outside the U.S.
      • Medicare offers coverage for inpatient hospital and skilled nursing services but limits apply.
      • With Original Medicare, there is no limit to how much you could pay out of your own pocket for your healthcare in any given year.

Important Enrollment Dates

  • Qualifying for Medicare: Turning 65
    • Original Medicare Initial Enrollment Period (IEP) begins 3 months before the month of your 65th birthday; ends 3 months after
  • What If I Work Past The Age of 65?
    • If you’re over age 65 and aren’t ready to retire, you may need to make an important decision: keep your employer-sponsored health care coverage, or enroll in Medicare?
    • The important note to consider is this - “is my health plan benefits considered ‘credible’ coverage?”
    • How to find out? You can reach out to your benefits administrator at work to confirm if you do have credible coverage to avoid paying any late penalties.
    • If you find out you do have credible coverage through your or your spouse's employer, then you have up to 8 months after retiring or loosing the employer coverage to sign up for your Part B benefits without paying a late enrollment penalty.
    • Non-Credible Coverage
      • COBRA
      • Marketplace
      • Direct Individual Plans
  • Enrolling Into Medicare – What’s Next?
    • If you begin receiving Social Security retirement benefits between age 62 and up to 4 months before turning 65, you should be automatically enrolled in Medicare A and B when you turn 65.
    • If you apply for Social Security 3 months before you turn 65 or later, you can sign up for Medicare when you apply for Social Security.
    • If you are not ready to receive Social Security Benefits at 65 because you are still working, you can apply for Medicare only benefits or you may be able to wait until you retire to sign up.
    • If you have questions on your specific situation, please feel free to reach out to Sarah Gerber
  • How to Enroll
    • Medicare Enrollment
      • If you have Social Security when you turn 65:
        • You will be automatically enrolled into Medicare. You will receive your Medicare card three month prior to your birthday.
      • If you do not have Social Security when you turn 65:
        • You will need to take the step to sign up for Medicare.
      • Three ways to join Medicare:
        • Apply online at www.ssa.gov
        • Call Social Security at 1-800-772-1213 (TTY 1-800-325-0778) to apply over the phone or to request an application
        • Apply at your local Social Security office
    • Annual Election Period (AEP): October 15 – December 7
      • This is the time each year that you are allowed to make changes effective for the following year, such as adding a cost plan, or Medicare Part C or Part D
    • Medicare Advantage Open Enrollment Period (OEP): January 1 – March 31
      • Allows those enrolled in a Medicare Advantage plan to make a one-time election to change to:
        • A MA-PD or MA-Only plan
        • Original Medicare with or without a stand-alone Medicare Part D plan
        • Add or drop Medicare Part D coverage
        • Enroll in Medicare Cost-only
        • Enroll in Medicare Cost with Medicare Part D
        • Enroll in Medicare Cost with Stand-alone Medicare Part D
    • Special Election Period: January 1 – December 31
      • There are many reasons you may qualify for a Special Election Period (SEP). These life events can happen throughout the entire year, such as:
        • Loosing employer sponsored coverage
        • Moving to new service area
        • Working past the age of 65

2025 Medicare Costs

  • Medicare Part A (Hospital Insurance) Costs
    • Part A Monthly Premium
      • Most Medicare beneficiaries do not have a Part A premium because they paid Medicare taxes while working
      • If you don’t get premium free Part A, you may pay up to $518 each month
  • Part A Deductible & Coinsurance
    • Medicare Part A inpatient hospital deductible (per benefit period) $1,67+ deductible (typically covers days 1-60)
    • $419 per day (days 61-90)
    • $838 per “Lifetime Reserve Days” after day 90 of each benefit period (up to a maximum of 60 days over your lifetime)
  • Skilled Nursing Facility Stay
    • In 2025, you’ll pay
      • Days 1-20 : $0
      • Days 21-100 : $209.50 per day
      • Beyond Day 100: All costs
  • Medicare Part B (Medical Insurance) Costs
    • Part B Monthly Premium
      • Most people pay the standard Part B monthly premium amount which is $185 in 2025
      • If your modified adjusted gross income as reported on your IRS tax return from two years ago is above the certain amount, you’ll pay the standard Part B premium and an income-related monthly adjustment amount (IRMA)
    • Part B Deductible
      • $257 per year. Then you pay roughly 20% of the remaining cost for your Part B covered services with no out of pocket limit
    • Medicare has set reimbursements for covered Part B services, so you’ll want to try and receive services from providers and facilities that accept Medicare assignment. If a provider doesn’t accept Medicare assignment, they can charge up to 15% above the Medicare set reimbursement for Part B covered services

Late Enrollment Penalties

  • Part B Late Enrollment Penalty: Late enrollment without credible coverage may mean penalties down the road.
    • You’ll pay the penalty for as long as you have coverage
      • 10% for each year you were eligible and did not enroll
      • Based on that year’s Part B Premium
      • Amount can change every year
    • You may have to pay more if you wait to enroll
      • Exceptions include:
      • You are actively working with health insurance coverage
      • You have health insurance coverage through your spouse’s employer
    • Part B Penalty example:
      • 10% of this year’s Part B premium ($185.00) is $18.50
  • Part D Late Enrollment Penalty: Late enrollment without credible coverage for prescription drugs may mean penalties down the road.
    • You’ll pay the penalty for as long as you have coverage
      • Multiply 1% of these beneficiary national average premium times the number of full, uncovered months without Part D or creditable prescription drug coverage (example is
      • Base beneficiary premium may change each year, so penalty amount may also change each year
    • 2023 Part D National Average Premium - $32.74
    • 2024 Part D National Average Premium - $34.70
    • 2025 Part D National Average Premium - $36.78
      • This amount is used to estimate the Part D late enrollment penalty. The national base beneficiary premium amount can change each year.
    • Exceptions include:
      • You have creditable drug coverage from another source, such as an employer
      • You qualify for the Extra Help program

Medicare Private Insurance Type Comparisons

  • Medicare Supplement (Medigap) Plans
    • What to know about Medicare Supplement plans:
      • Offered by private insurance companies
      • You pay a monthly premium plus any deductible, coinsurance or copayments for services used depending on which plan letter you choose
      • Pays the 20% not covered by Original Medicare for Medicare approved services
      • Plans vary by state
      • Prescription Drug coverage is purchased in addition to this
      • The best time to buy a Medicare Supplement Policy is typically during your Open Enrollment Period. This six-month period begins on the first day of the month in which you’re 65 or older and enrolled in Part B where you have guaranteed issue rights.
      • If you apply for Medicare Supplement coverage after your Open Enrollment Period, acceptance requires meeting medical underwriting requirements. Acceptance is not guaranteed, unless you’re eligible for specifically defined guaranteed issue rights.
      • The benefits are standardized and offer multiple plan types. All plans offer the same basic benefits and some offer additional benefits. Once a policy is issued, the benefits do not change from year to year and are guaranteed renewable as long as you pay the premium.
      • Want to learn more about Medigap plans? View our helpful chart to discover the different benefits Medigap policies cover.
  • Medicare Advantage Plans
    • What to know about Medicare Advantage plans:
      • If you join a Medicare Advantage prescription drug (MA-PD) plan, your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage is bundled all-in-one with your MA-PD
      • Offered by private insurance companies
      • Many offer $0 or lower premium plans, but you pay any deductibles, copayments or coinsurance for services used
      • You must reside in the plans county service area to be eligible
      • MA-PD plan benefits and pricing varies, but all offer limits on how much you could spend on your healthcare
      • Most MA-PD plans offer savings if you see in-network doctors for your care
      • If you enroll in an MA-only plan, you cannot enroll in a stand-alone Part D plan
    • In a Medicare Advantage plan you:
      • Are still in Medicare with all rights and protections
      • Can receive services covered by Part A and Part B, but the MA Plan covers those services
      • May choose a plan that includes prescription drug coverage (some are without)
      • Can be charged different out-of-pocket costs depending on which plan you pick
      • Can’t be charged more than Original Medicare for certain services, like chemotherapy, dialysis, and skilled nursing facility (SNF) care
      • May choose a plan with extra benefits like vision, dental or fitness and wellness benefits
      • Have a yearly limit on your out-of-pocket costs
  • Medicare Cost Plans
    • What to know about Medicare Cost plans:
      • Offered by private insurance companies
      • Premiums vary by plan and are not age or gender-based
      • Work with Medicare Part A & Part B
      • There is no medical underwriting
      • Eligibility typically includes not having End Stage Renal Disease (ESRD)
      • Extra benefits may include eye exams, hearing exams, fitness club memberships, and over the counter benefits
      • Only available in certain counties
      • Can receive savings if using in network care
      • Medicare Cost plans have nationwide coverage
      • Must live in service area to enroll
      • Can either have stand alone prescription drug plan or choose cost plan with prescription drug coverage already included
  • Part D Prescription Drug Plan (PDP)
    • What to know about Part D prescription drug plans:
      • Offered by private insurance companies
      • Monthly premiums vary by plan but you pay any deductibles, copays or coinsurance for your prescriptions
      • Drugs included on the plan’s drug list (formulary) varies by plan
      • Large nationwide pharmacy network, including major chains and independent pharmacies
      • View additional Part D resources

Questions? We're always here to help, contact your local CorInsurance agent today!

Sarah Gerber