Medicare covers more than 65 million Americans, but most people approaching eligibility have never had to think about it before. If you’re turning 65, retiring, or helping a parent navigate their options, this guide is your starting point. And when you’re ready to talk through what it means for your specific situation, The Stern Team is here at no cost to you.
Let’s start at the beginning…What’s Medicare?
Medicare is the federal health insurance program administered by the Centers for Medicare & Medicaid Services (CMS). It provides coverage for:
- People age 65 or older
- Certain younger people with qualifying disabilities
- People with End-Stage Renal Disease (ESRD) — permanent kidney failure requiring dialysis or a transplant
Medicare is not automatic for everyone. Depending on your situation, whether you’re still working, covered by an employer plan, or approaching 65 without employer coverage, your enrollment window and your best options will differ. Getting this wrong can result in costly late enrollment penalties that follow you for life. That’s exactly why having a licensed advisor in your corner matters.
703.969-1811 (call or text) – Schedule an appointment
The Four Parts of Medicare
Medicare is divided into four parts: A, B, C, and D. Understanding what each one covers is the foundation of making a smart coverage decision.
What Does Medicare Part A Cover?
Part A is the “hospital” part of Medicare. Coverage includes:
- Hospital Coverage – Medicare Part A Coverage includes inpatient hospital stays, nursing facility care, hospice care, and some home health care.
Inpatient hospital stays — semi-private room, meals, general nursing, and hospital services and supplies - Skilled nursing facility (SNF) care — but only following a qualifying hospital stay of at least three days
- Hospice care — for terminal illness with a life expectancy of six months or less, as certified by a doctor
- Some home health care — including part-time skilled nursing care and physical, occupational, and speech therapy
What Part A costs: Most people pay $0 in premiums for Part A because they or their spouse paid Medicare taxes for at least 10 years (40 quarters) while working. However, Part A does come with deductibles and coinsurance costs once you’re in the hospital. In 2025, the Part A inpatient deductible is $1,676 per benefit period, not per year. That distinction matters.
What Part A does NOT cover: Private rooms (unless medically necessary), private-duty nursing, personal care items or long-term custodial care. This is a common and expensive misconception. Medicare does not pay for assisted living or long-term nursing home stays beyond a limited care period, usually for doctor directed rehabilitation.
What Does Medicare Part B Cover?
Medical Insurance – Medicare Part B Coverage includes certain doctors’ services, outpatient care, medical supplies, and preventive services. This includes:
- Doctor visits — services from physicians, specialists, and other healthcare providers
- Outpatient care — surgery, observation, and emergency care that doesn’t result in inpatient admission
- Preventive services — annual wellness visits, screenings for cancer, diabetes, cardiovascular disease, depression, and more
- Durable medical equipment (DME) — wheelchairs, walkers, oxygen equipment, and similar items
- Mental health services — outpatient therapy and psychiatric evaluation
- Some home health and ambulance services
What Part B costs: Unlike Part A, Part B always comes with a monthly premium. The standard 2025 premium is $185.0 per month, but higher-income beneficiaries pay more through IRMAA (Income-Related Monthly Adjustment Amount). Part B also has an annual deductible and typically covers 80% of approved costs, leaving you responsible for the remaining 20% with no out-of-pocket maximum. That 20% exposure is why many people add a Medicare Supplement plan.
What Part B does NOT cover: Prescription drugs (covered under Part D), routine dental, vision, and hearing, cosmetic procedures, or care received outside the United States.
What Does Medicare Part C Cover?
Medicare Advantage Plans– Medicare Part C Coverage is a type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Part A and Part B benefits. Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. If you’re enrolled in a Medicare Advantage Plan, most Medicare services are covered through the plan and aren’t paid for under Original Medicare. Most Medicare Advantage Plans offer prescription drug coverage.
What Does Medicare Part D Cover?
Prescription Drug Coverage – Medicare Part D Coverage adds prescription drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private-Fee-for-Service Plans, and Medicare Medical Savings Account Plans. These plans are offered by insurance companies and other private companies approved by Medicare. Part D is not automatic, you must enroll in a plan.
How Part D works:
- Plans are offered by private insurance companies approved by Medicare
- Each plan has its own formulary (list of covered drugs) organized into tiers that determine your cost
- Costs vary by plan and include a monthly premium, annual deductible, and copays or coinsurance at the pharmacy
The Late Enrollment Penalty (this is important!): If you don’t sign up for Part D when you’re first eligible and you go 63 or more consecutive days without creditable prescription drug coverage, Medicare will add a permanent late enrollment penalty to your Part D premium for as long as you have Medicare. This penalty is calculated as 1% of the national base beneficiary premium for every month you were without coverage. It adds up fast and never goes away.
Common Medicare Mistakes to Avoid
Missing your enrollment window is the most expensive mistake, but it’s not the only one. Know these common mistakes so you can avoid them:
- Assuming Medicare covers everything — it doesn’t. The 20% gap under Part B, dental, vision, hearing, and long-term care are all significant exposures
- Choosing a plan based on premium alone — a $0 premium plan with a narrow network and high specialist copays can cost far more than a modest-premium plan that covers your doctors
- Not reviewing your plan at annual enrollment — plans change every year. A plan that was right for you last year may not be right this year
- Forgetting to check your drug formulary — your medications must be on your plan’s list or you’ll pay full price
- Not asking about extra benefits — gym memberships, dental allowances, and OTC credits go unused by thousands of enrollees every year simply because they didn’t know to ask
When Can You Enroll in Medicare?
Initial Enrollment Period (IEP) Your first chance to enroll in Medicare is a 7-month window: 3 months before your 65th birthday month, your birthday month itself, and 3 months after. Enrolling before your birthday month means coverage starts the first day of your birthday month.
Special Enrollment Period (SEP) If you or your spouse are still working at 65 and covered by employer insurance, you can delay Medicare without penalty. When that coverage ends, you have an 8-month Special Enrollment Period to sign up for Part B without a late penalty.
Annual Enrollment Period (AEP) October 15 – December 7 each year. This is when you can switch Medicare Advantage plans, switch from Original Medicare to Advantage (or back), and change your Part D plan. Changes take effect January 1.
Open Enrollment Period (OEP) January 1 – March 31. If you enrolled in a Medicare Advantage plan during AEP and want to switch to a different Advantage plan or return to Original Medicare, you can do so during this window.You don’t have to figure this out alone. The Stern Team has been helping Virginia families navigate Medicare since 2003. We represent all major carriers, our guidance is free and we don’t push any one plan.
(703) 969-1811 jeremy.stern@healthmarkets.com