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Understanding the Basics

Medicare is a federal government program that provides health care coverage if you are 65 years or older, under 65 and receiving Social Security Disability Insurance (SSDI) for a certain amount of time, or under 65 and with End-Stage Renal Disease (ESRD). The Centers for Medicare & Medicaid Services (CMS) is the federal agency that runs Medicare. The program is funded in part by Social Security and Medicare taxes you pay on your income, in part through premiums that people with Medicare pay, and in part by the federal budget.

Once you have become Medicare-eligible and enroll, you can choose to get your Medicare benefits from Original Medicare, the traditional fee-for-service program offered directly through the federal government, or from a Medicare Advantage Plan (Medicare Part C), a type of private insurance offered by companies that contract with Medicare (the federal government).

Original Medicare includes:

  • Part A – Inpatient & Hospital coverage
  • Part B – Outpatient & Medical coverage

If you want Medicare prescription drug coverage or Medicare Part D, in most cases you will need to actively choose and join a stand-alone Medicare private drug plan.


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