Original Medicare

Part A

Part A covers inpatient care. Hospital stays, skilled nursing facility care after a qualifying hospital stay, hospice, and some home health care.

Most people don't pay a premium for Part A. If you or your spouse worked and paid Medicare taxes for at least ten years, you've already paid for it. You do still pay a deductible when you're admitted, and that deductible resets based on benefit periods rather than the calendar year, so it's possible to pay it more than once in a year.

Part B

Part B covers outpatient and medical care. Doctor visits, preventive care, lab work, outpatient surgery, durable medical equipment, and ambulance services.

Part B has a monthly premium that nearly everyone pays. There's an annual deductible, and after you meet it, Medicare generally pays 80 percent of the approved amount for covered services. You're responsible for the remaining 20 percent, and that 20 percent has no ceiling.

Part D

Part D covers prescription drugs. It isn't part of Original Medicare. It's a separate plan sold by private insurance companies, and you add it if you want prescription coverage.

What Original Medicare doesn't cover

Original Medicare was never designed to cover everything. It generally doesn't cover routine dental, vision, or hearing care, hearing aids, or long-term custodial care. Prescription drugs aren't included unless you add Part D.

The larger gap is the one people don't see coming. Because Part B has no annual out-of-pocket maximum, there's no point at which your share stops. A serious illness or a long hospital course can leave you owing 20 percent of a very large number.

That gap is why Medicare Advantage and Medicare Supplement plans exist.

When you can enroll

Most people become eligible at 65. Your Initial Enrollment Period is a seven-month window that opens three months before your birthday month and closes three months after it.

If you're still working at 65 and covered by an employer group plan, you may be able to delay Part B without penalty. When that coverage ends, a Special Enrollment Period opens and gives you eight months to enroll in Part B without a late penalty.

Special Enrollment Periods open for other situations too, including losing other creditable coverage, moving out of your plan's service area, and certain other qualifying life events.

If you miss your window and no Special Enrollment Period applies, the General Enrollment Period runs January 1 through March 31 each year. Enrolling then means a late enrollment penalty added to your Part B premium for as long as you have it.

Timing is the part of Medicare with the most expensive mistakes in it.