What Is Medicare?

Medicare is the federal government’s health insurance program that primarily covers people 65 and older. Original Medicare plans do not cover all medical costs, but you can buy other plans that help offset those expenses, including Medicare Advantage plans and Medicare Supplement Insurance (Medigap).

The United States created Medicare in 1966 as a national health insurance primarily for the nation’s older population. Today, it is administered by the Centers for Medicare and Medicaid Services (CMS). It is the second largest social insurance program in the country, behind Social Security.

Medicare covered 59.9 million Americans and spent $741 billion on their health care in 2018, according to CMS. But people on Medicare still faced out-of-pocket expenses because Parts A and B — known collectively as Original Medicare — don’t cover all medical costs.

Private companies contract with CMS to sell Medicare Advantage plans, also known as Medicare Part C. These can cover many medical expenses that original Medicare doesn’t cover, including vision and dental.

Medicare Supplement Insurance, or Medigap, helps offset coverage gaps of Original Medicare. These policies are sold by private companies.

Understanding Medicare Coverage Plans