Medicare is designed to provide subsidized health insurance coverage to the elderly and disabled, but it doesn't cover all types of healthcare services. The program is divided into four parts that pay for different expenses: Part A covers inpatient hospital care, Part B covers outpatient medical services and Part D provides coverage for prescription drugs. You also have the option of signing up for a "Medicare Advantage Plan” through Part C of Medicare, which may include benefits beyond those provided by other segments.
Medicare Part A
Medicare Part A is also called Medicare hospital insurance because it pays for inpatient hospital care. According to the official 2013 Medicare handbook, Part A covers inpatient hospital care, inpatient care at skilled nursing facilities, hospice care services and home health care services. You usually don't have to pay a monthly premium for Medicare Part A benefits as long as you or your spouse paid Medicare tax during your working life.
Medicare Part B
Medicare Part B coverage is known as the medical insurance portion of Medicare, since it covers a variety of outpatient medical services. These include doctors' services, ambulance services, outpatient care, the cost of durable medical equipment and various types of preventative care, such as cancer screenings. Part B coverage requires the payment of a monthly insurance premium. The standard premium amount is $99.90 a month as of 2012, but you must pay higher premiums if your modified adjusted gross income was above $85,000 in 2010.
Prescription Drug Coverage
Medicare Part D provides prescription drug coverage at the cost of an additional premium through private companies approved by Medicare. Participation in the drug coverage program is voluntary, but it can be beneficial for those who need many prescription drugs. The specific list of drugs covered by Part D varies from one insurance plan to another. You may have to pay certain up-front costs such as deductibles and copays when buying prescription drugs, even if you're covered by Part D.
Medicare Advantage Plans
Medicare Part C allows for Medicare Advantage Plans: insurance plans run by private companies that contract with Medicare to provide Part A and Part B benefits. In addition to Part A and Part B, a Medicare Advantage Plan may provide prescription drug coverage and coverage for certain expenses that aren't covered by Part A and Part B. Expenses not covered by Part A or B include long-term care, routine physical exams, routine dental, eye and foot care, dentures, hearing aids and cosmetic surgery.
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