Medicare is a federal health insurance program for people aged 65 or older. The purpose of Medicare is to provide a low-cost option for health insurance to those retirees who are no longer covered under an employer’s insurance plan. The Social Security Administration handles Medicare health insurance eligibility and enrollment.

Medicare and Health Insurance: What is CoveredMedicare covers a wide range of medical necessities including hospital stays, routine exams, medications, etc. However, it does not cover everything. Long-term care services, private nursing care, dental and vision care and cosmetic surgery are just a few of the items not covered by Medicare. For these items, and other medical necessities that Medicare does not cover, individuals have the option to purchase Medicare supplement insurance to fill in the gaps.

Medicare Supplement Insurance

Also known as “Gap Insurance,” there are 12 standardized Medicare supplement insurance plans, labeled "A" through "L.” Each plan offers a different combination of benefits and different prices. During the open enrollment period for Medicare Supplement Insurance, you are eligible to apply for any Medicare supplement plan, even if you have current health problems.

Not everyone needs Medicare supplement insurance for those who have supplemental health insurance through an employer, or if you have Medicare Advantage or Medicaid. In order to participate in a Medicare Supplement Insurance plan, you must first participate in both parts A and B of Medicare. You may apply for a Medicare supplement plan within six months after enrolling in Medicare Part B.

Medicare Parts A and B

Medicare Part A pays for in-patient services while Medicare Part B pays for outpatient services. The lists below include an overview of the basic services covered by these two parts:

Part A:

Nursing facility care

Hospital stay

Home health care

Hospice care

Three pints of blood

Part B:

Clinical laboratory services

Outpatient treatments

Labs and testing

In most cases, Medicare pays 80 % of the cost of covered services.

Medicare Part D

Medicare Part D pays for prescription drugs. This plan covers both generic and brand name prescription drugs. The initial enrollment period to join a Medicare drug plan is three months before your 65th birthday to three months after you turn age 65. Each year during the open enrollment period, you have the option to change your drug plan to fit your specific needs. Perhaps when you turned 65 you did not have need for extensive coverage, but as you get older and your needs change, this coverage can be increased as necessary.


Medicaid is a separate federal program to provide health coverage for the low-income population. While the Social Security Administration covers Medicare, Medicaid is administered by the states. For those who qualify for Medicaid, the state pays for your Medicare premiums and other out-of-pocket costs. Medicaid will also pay for some services not covered by Medicare. For this reason, if you have both Medicaid and Medicare, you do not need any additional supplement insurance.