How Medicare works

Part A and Part B tend to be the most popular programs, and they generally offer the freest services for consumers who qualify.

• Part A covers inpatient hospital care, nursing home care, hospice, and a few other services like at-home care. These services are usually free, which means there’s no premium to pay.

• Part B covers outpatient hospital care, doctor bills, physical therapy, and more services. Part B is optional and costs most people a monthly premium. (The premium is higher for some, depending on income, and a little lower for those who have it deducted from a Social Security check.)

It is advisable to sign up for Part B when you first become eligible for Medicare, no matter how healthy you are — unless you are still working and included on an employer’s health plan. Otherwise, you will face a stiff penalty when you do need this coverage, and the penalty will last as long you have Part B. Even if you choose a private Medicare Advantage plan for your coverage, you have to sign up for Part B.