Medicare Benefits Explained

Medicare provides health care insurance for disabled persons and senior citizens over the age of 65. The combined coverage of Medicare Parts A and B, referred to as Original Medicare, can help cover hospital and physician costs. Participants who choose the optional Part D coverage receive prescription drug benefits. Medicare Advantage plans can offer the combined benefits of Original Medicare and prescription drug benefits, in a single program.

Medicare Part A

• Medicare Part A helps pay for inpatient hospital, home health, nursing home and hospice care. Part A provides premium-free coverage for disabled persons and senior citizens 65 years of age or older, who have paid at least 10 years of Medicare taxes. Part A can cover partial hospital costs for approximately the first two months of hospitalization and full hospital costs for the next month, up to the 90th day of hospital care. Nursing home coverage can include approved services for the first 20 days and full costs after that, up to the 100th day. After receiving three pints of blood, participants can turn to Medicare Part A to pay for subsequent blood transfusions. The plan can pay hospice care expenses of patients with terminal illnesses. Part A can cover home health care services, including medical equipment costs.

Medicare Part B

• Medicare typically requires Part A participants to purchase Part B coverage. Part B covers costs such as physician services, laboratory services and outpatient care. After a participant reaches his deductible, Part B can pay for up to 80 percent of Medicare-approved services. The plan can also pay for select preventative care services, including bone mass measurements, cardiovascular screenings, colorectal cancer screenings and diabetes screenings. Beginning Jan. 1, 2011, Part B participants can receive the majority of preventative care services at no cost, or by paying a coinsurance payment.

Part A and Part B Exclusions

• Medicare Parts A and B typically require meeting deductibles and paying copayments and coinsurance payments. Medicare Parts A and B do not pay for all medical services, including long-term care, immunizations, dentures, cosmetic surgery, hearing aids, regular medical checkups and medical services obtained outside the United States.

Medicare Part D

• Medicare Part D can help pay for prescription medications. Private insurance providers administer Part D. Premium costs vary, depending on location. Low-income participants can qualify for the Extra Help program, also known as the low-income subsidy (LIS), to receive lower costs for prescription drugs. Beginning in 2011, Extra Help participants can purchase generic medications for as low as $2.50 per prescription and brand-name medications for as low as $6.30 per prescription.

Medicare Advantage Plans

• Medicare also offers Medicare Advantage plans, administered by private insurance providers. Plans vary, depending on a participant's location, and can include health maintenance organization (HMO) and preferred provider organization (PPO) plans. Participants must enroll in coverage for Medicare Parts A and B before applying for Medicare Advantage plans. Medicare Advantage programs include combined coverages offered in Parts A, B and D. Participants pay monthly premiums, coinsurance and copayments, which vary depending on location and plan selected.