If you’re getting close to retirement, one of the big changes you face is trading your current health insurance for Medicare. The world of Medicare can be complicated, but learning the basics can help.
Medicare is a U.S. government health insurance program for people 65 and older, along with some younger people who have disabilities or kidney failure that requires dialysis or a transplant.
You can enroll for the first time starting three months before the month you turn 65 through the following four months after your birthday month. Open enrollment, in which you can change plans, or join or leave a prescription drug plan, takes place from October 15 to December 7.
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Here’s a primer on the parts of Medicare -- sometimes referred to as “alphabet soup” because the letters that designate each part can seem like a jumble.
But don't worry: we’ll walk you through Medicare Parts A, B and D first. We’ll cover Medicare Part C last because, despite its name, it’s not really a part of Medicare, but a way of getting your Parts A, B and D Medicare coverage through a private company.

What is Medicare Part A?

Medicare Part A is hospital insurance, which means that it covers a stay in a hospital, a nursing home or a skilled nursing facility. Part A also covers home health care and hospice services.
However, there’s a catch: Part A will not cover a nursing home stay if you need only “custodial care,” which is personal or health care that can be provided by someone without special training or qualifications. Examples include help with: eating, bathing, getting out of bed, using the bathroom or putting in eye drops.
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Here’s an example of Part A coverage: Mary comes down with a cough, which turns into chills, chest pain and trouble breathing. She gets diagnosed with pneumonia and admitted to the hospital, where she stays for 10 days. Medicare Part A covers Mary’s hospitalization, including her semi-private room, food, nursing care, antibiotics, other drugs and medical supplies used during her stay.
However, it doesn’t cover extras like a private room, a TV in the room or a pair of socks, so Mary has to either forego those items or pay for them out of pocket.
The cost: If you've worked long enough – about 10 years – and paid Medicare taxes during that time -- you can get Part A for free. If not, you’ll have to pay a premium. The standard premium is either $226 or $411 per month, depending on how long you worked and paid Medicare taxes. Here’s a Medicare eligibility and premium calculator that will help you figure out how much you’ll pay.

What is Medicare Part B?

Medicare Part B is medical insurance, which means it covers ambulance services, doctor visits, rehabilitation, surgery, lab tests and imaging. Part B also covers doctor-prescribed medical devices and supplies you need to treat an illness or health problem. For example, it covers blood sugar monitors, crutches and walkers.
Here’s an example of Part B coverage: Fred notices a pain in his shoulder and finds he can’t lift his arm very high when washing his hair. He visits a doctor who takes X-rays, diagnoses Fred with frozen shoulder and prescribes physical therapy. Medicare Part B covers Fred’s doctor visit, X-rays and physical therapy sessions.
The cost: No matter how long you worked, you’ll have to pay a Part B premium.