Medicare is a health insurance program for:
Part A: Hospital Insurance - helps cover the Medicare holder's costs of inpatient care while in the hospital. Coverage includes critical access hospitals and skilled nursing facilities. It also helps cover hospice care and some home health care expenses. Part A does not include custodial or long-term care. Beneficiaries must meet certain conditions to receive these benefits.
Cost: For those eligible, a monthly payment, called a premium, is rarely paid for Part A because they or a spouse have already paid Medicare taxes while working. If a beneficiary does not have premium-free Part A Hospital Insurance, they may have the option to buy Part A if they or their spouse are not entitled to Social Security, for reasons such as, they did not pay enough Medicare taxes while working, are age 65 or older, or are disabled but no longer receive free Part A because they have returned to work.
Part B: Medical Insurance - covers doctors' costs as well as outpatient care expenses. Part B also insures medical services that Part A does not cover, such as some services performed by physical and occupational therapists, as well as some home health care. Part B helps finance these covered services and supplies when they are medically necessary.
Cost: A monthly payment of the Medicare Part B premium. In some cases, this amount may be higher if the beneficiary did not enroll for Part B when they first became eligible.
Caution: The cost of Part B for unsigned eligible beneficiaries will go up 10% for each 12-month period after they first become eligible for Part B. Once they are enrolled, they will have to pay this penalty for as long as they have Part B.
Beneficiaries also pay a Part B deductible each year before Medicare starts to pay its share. The beneficiary may receive aid from their state to pay this premium and deductible.
Medicare deductible and premium rates may change at the beginning of each year.
Prescription Drug Coverage - Most people will pay a monthly premium for this insurance coverage. Since January 1, 2006, private companies have made Medicare Prescription Drug Coverage available to every Medicare beneficiary. Coverage may help lower prescription drug costs and help protect against higher costs in the future. Beneficiaries may choose their desired drug plan accordingly. If a beneficiary does not enroll in a drug plan when they are first eligible, they may pay a penalty if they choose to join later.